The ASEAN Wonk Podcast

Our guest today is Dr. Ely Ratner who served as assistant secretary of defense for Indo-Pacific security affairs under the Biden administration. We will start our conversation talking through contemporary developments in U.S. security relationships in the Indo-Pacific. Be sure to stay tuned as we go through a range of other subjects, including the the new administration’s coming U.S. defense strategy, datapoints to watch in 2026, Taiwan and the South China Sea.

To receive full ASEAN Wonk posts and support our work, consider a paid subscription for $5 a month/$50 a year through the button below. For more on pricing for institutions, groups and discounted categories, visit this page.

Note: The transcript that follows the above free clip preview has been lightly edited for clarity and organized into sections for ease of quick browsing. For all ASEAN Wonk Podcast episodes, full video and audio podcasts, along with edited and sectioned transcripts as well as block quotes, will be a premium product for our paying subscribers, but we will include a short free transcript preview and a clip for all readers to maintain accessibility. Paying subscribers can find the rest of the full transcript and the full video podcast right below the paywall. If you have not already, do consider subscribing, and, if you have already done so and like what you see and hear, do consider forwarding this to others as well who may be interested. Thank you for your support as always!

GRADING TRUMP ADMINISTRATION’S EARLY INDO-PACIFIC DEFENSE APPROACH

ASEAN Wonk: Welcome to the podcast, Ely, and I wanted to start with your take on where U.S. defense policy is under the second Trump administration. We just saw Defense Secretary Pete Hegseth out at the Shangri-La Dialogue in Singapore. And to be fair, if you look more at what he did rather than what he said, you could make the case for a lot of continuity with the building out of the security latticework that we saw under the Biden administration. But as one Southeast Asian official said to me, the key challenge seems to be to what extent is this new administration going to be able to build out the so-called lattice work even as it does seem like – from some of the headlines and some of the experiences of some of the countries in the region – the aperture of U.S. engagement seems to be narrowing or changing when it comes to other non-defense aspects of U.S. policy, whether it's through tariffs or U.S. assistance and focus and so on and so forth. So as a practitioner yourself and somebody who has thought about U.S. defense policy both in and out of government for a long time, how would you go about grading the new administration's approach with respect to defense policy in the Indo-Pacific?

Dr. Ely Ratner: Well, Prashanth, thanks for the opportunity to be here. It's great to talk with you today. I think your prompt laid down a number of the issues in early assessment, which is in terms of activities, in terms of messaging, I think we have seen a decent degree of continuity. Secretary Hegseth’s first trip out to the region to the Philippines and then Japan, both in terms of the types of deliverables that were announced as well as the messaging around U.S. commitment to the region, U.S. commitment to allies and partners that did represent a good amount of continuity.

Where we have seen some particularities related to the Trump administration, we have seen a much stronger push toward allies and partners to spend more on defense and to do more and contribute more. I think some of that had started under the Biden administration. And frankly, I think up to a point, that's actually quite a good direction to take our alliances and partnerships. So that has been much more forward as a central priority. And then, yes, of course, as you mentioned, the changing nature of U.S. foreign assistance in the region as well as the economics on tariffs have created, I think, political headwinds, diplomatic headwinds. And the question is to what degree are those going to interfere with the ability – both the political space and the ability – of countries in the region to continue forward on deepening defense and security partnerships.

So I think we are at a little bit of a inflection point here where – yes, you are seeing continuity; you're seeing good messaging – we also haven't necessarily seen the full fruition or development of a clear regional strategy from the new administration. There's a national defense strategy, which by all reporting is underway and may be released as early as the end of the summer, and that'll give a good indication on the defense front where the administration wants to head. And that appears to be quite focused on the on the China challenge, also focused on the U.S. homeland, and that has a certain degree of implications for how the administration approaches the region, how the administration approaches allies and partners from a defense perspective. But, obviously, as you said, it's a broader aperture of economic and diplomatic initiatives as well that affects all of that. So I think mostly continuity so far with some potential disjunctures based on some of the external factors.

“There's a national defense strategy, which by all reporting is underway and may be released as early as the end of the summer, and that'll give a good indication on the defense front where the administration wants to head.”

EVOLUTION OF LATTICEWORK AND REGIONAL SECURITY PARTNERSHIPS

ASEAN Wonk: Right. I wanted to ask a broader question about the security latticework or network of US alliances and partnerships. Because as you're aware, this is something that's been in process really since the end of the Cold War – this idea of transitioning from wheels to webs; hub and spokes to more networked forms of alliances and partnerships. I'm wondering for Southeast Asia where you see U.S. engagement having proceeded there? Because I do sense that even though there's a lot of focus in the headlines around the Philippines, for example, there was an effort by the Biden administration to really broaden out how to think about defense – not just integrated deterrence, but also looking at opportunities like East Timor for example, and Indonesia with Super Garuda exercises. Where do you see key partnerships and direction of travel regarding Southeast Asia’s place within the broader U.S. Indo-Pacific defense architecture in the past ten, fifteen years?

Dr. Ely Ratner: Yeah. It's a great question. Look, maybe I'll answer it in a couple different ways. I mean, in the first sense, I think what you're describing of an aspiration to try to mature the regional architecture beyond just the hub and spoke model or beyond just a set of U.S. bilateral alliances has been around as long as you and I have been in the business. You can go back ten, fifteen years, and there are think tanks writing about the Asia power web or this networking. But up until pretty recently, I think it had been mostly fits and starts and aspiration, maybe dialogue at best. I think what we saw during the Biden administration was a real transition from the latticework or the networking being theory or at best dialogue to moving toward no kidding activities that can have a real impact on operational cooperation, and, at the higher end, combat credible deterrence. So we saw that with AUKUS, obviously; in the “Squad” arrangement with the Philippines, Australia, and Japan; and the US, Japan, South Korea arrangement; to a degree, the Indo-Pacific Quad with India; and continued U.S. engagement with ASEAN, including plans for another U.S.-ASEAN exercise upcoming in the coming years.

You know, sometimes as new opportunities and institutions emerge, particularly in Southeast Asia, there is concern that it is crowding out attention toward ASEAN or somehow diminishing how we think about ASEAN centrality as the role of ASEAN as sort of the lone convener of the region together. I guess I understand those concerns, but we all consider these – both in the way we spoke about them, but in practice – as complementary and overlapping. That the idea was not that one institution would move in and push aside all the others, but that the combination of them – different partners addressing sort of fit for purpose, different issues – that that was the right way to think about the overall regional architecture, and I continue to believe that.

I have written a piece in Foreign Affairs arguing that when it comes to combat credible deterrence, it will be important to move beyond just some of the ad hoc arrangements into a more formal collective defense arrangement, starting with the United States, Japan, Australia and the Philippines. That's really of the belief that, look, the latticework as it currently exists serves a lot of important functions. I think it strengthens the region. It's a good thing. It's the right thing to be doing. But in terms of real military cooperation – we can talk about sort of how it affects economics and diplomacy and foreign assistance and other issues – but when it comes to no kidding, militaries operating together in a way that strengthens deterrence, the ad hoc and informal nature of a number of these latticework institutions leaves them maybe where the whole isn't really more than the sum of the parts when it comes to command and control and exercises and operations and planning. And that you do need a more formal mechanism to get to a future where the power of the alliances together is really leveraging all of the capabilities.

Because as much as we are working together in these different constellations and we can work together to do exercises and it sends an important signal regionally about the degree to which we're cooperating and we're aligned, it's not always trending toward, again, no kidding ability to operate during crises and contingencies. So I think a part of the latticework needs to formalize. That doesn't mean the rest of it doesn't matter or the rest of it should go away, but a part of it does need to formalize.

Now moving to your question about Southeast Asia in particular, you're right that the Philippines has been at the center of those. That's because, frankly, the Philippines has been much more aligned on the China challenge than much of the rest of Southeast Asia, at least publicly. So I think that makes sense from an alliance perspective. But the United States does – and certainly the Biden administration did – view its defense partnerships with other countries in Southeast Asia as quite important, and again, ASEAN as a whole with really the value in bringing the region together. And having sat through a number of the ADMM plus meetings, it really was my perspective that those were vitally important to having that holistic conversation in a way that it really doesn't happen anywhere else. And also the convening power of bringing all those leaders together to be able to meet.

You know, Southeast Asia is very far from Washington. That's no secret. You travel out there all the time. It takes, you know, a good day to and a half plus to get there. So it's not easy for the U.S. secretary of defense or senior officials to be constantly in the region. But those types of forums allow the senior officials and the secretary to engage at senior levels with all of the relevant players there. And so those opportunities are incredibly valuable. So the convening part is really important.

And then the work with the Southeast Asian partners continues. A lot of it not always on the front pages, but working closely with partners around some of the issues that they're concerned about, whether it's the sovereignty issues in the South China Sea, whether it's illegal fishing, other kinds of transnational crime issues, maritime domain awareness. I think there's a lot of it even if at the strategic level, there is not perfect alignment among the United States and all of the Southeast Asian partners. I think when it comes to elements of what's articulated as the free and open Indo-Pacific and the types of norms and principles that come along with that, there actually is a good deal of alignment in terms of the kind of behaviors that we want to see. So it's a long answer to your question, but the answer is that I think there are still opportunities to continue building these relationships. And I think we see that happening sometimes a little bit below the radar, but in an important way, and that ought to continue.

ASSESSING CHINA’S REGIONAL SECURITY NETWORKING INROADS

ASEAN Wonk: That’s a useful perspective on both the U.S. strategy and also the regional dynamics. I would encourage listeners to read the full Foreign Affairs piece because even though there’s been some reaction to the headline on the Pacific Defense Pact, you clarify quite clearly in the piece that there isn’t really necessarily a need for a pan-regional organization like a NATO equivalent in in Asia. We can actually do this with a number of partners with some full participation, some participation in some aspects or some activities rather than sort of talking about this notion of an Asian NATO.

One other aspect I wanted to ask you about is, if China is to be read as the pacing challenge for the United States – as both the first Trump administration and the Biden administration, and so far what we've seen from the second Trump administration have seemed to recognize – we also do need to think about how China is thinking about its own security latticework and architecture in the Indo-Pacific region, including in Southeast Asia. And I think there is maybe a tendency for some folks to sort of dismiss this as, “oh, it’s a kind of a low value exercise” or “it’s a single partnership.” But my conversations with Chinese interlocutors is that they're very well aware of the fact that China is building from a very fragile foundation, so to speak, on the security aspects. But they're also aware that a gain here and a gain there eventually adds up over a period of time. And I would argue the things we're seeing in Southeast Asia – some of the defense sales that China is pursuing, a sort of naval base that Cambodia is characterizing as not being a naval base – a lot of these things, twenty years ago, you may not have foreseen in Southeast Asia, and they are now happening. So I wanted to get your sense as well as to how would you characterize the inroads that China is making in the region relative to what the United States is doing as well because this is a relative competition.

Dr. Ely Ratner: Yeah. It's a great set of points, and I think you've articulated well some of the challenges that we're facing. And, look, the PRC and the PLA are building up their defense and security relationships throughout the region. I would apply much of what you said to the Pacific Islands as well. It's a different set of dynamics, but we're seeing a similar level of ambition there. And there are multiple elements to it. There are arm sales, as you described, where China – either through cheaper manufacturing or just frankly subsidization – can provide capabilities at cost that is very difficult to compete with for the United States or other advanced militaries that are producing weapons domestically for domestic militaries at a quite substantial cost. So I think there are opportunities for inroads if left unfettered on security assistance. Certainly, the basing aspirations of the PLA have not waned, and the fact that they don't have more bases in places in the region and around the world is only because the supply has been less than they had hoped for, not because the demand is not there in Beijing. I think they're pressing very hard for opportunities.

“Certainly, the basing aspirations of the PLA have not waned, and the fact that they don't have more bases in places in the region and around the world is only because the supply has been less than they had hoped for, not because the demand is not there in Beijing. I think they're pressing very hard for opportunities.”

Countries understand, I think, some of the downside risks of that. So Beijing hasn't found as many willing partners as maybe they would have expected. But an absent United States or a distracted United States, you're right, could turn around and find out that things are emerging that have accumulated to effect. So I think that's exactly right to be a concern. And the way that Beijing is going about some of its defense and security partnerships is fusing also some of the domestic security concerns with the external security concerns. And this is where China's defense and security relationships may not look exactly like our formation of sort of external defense arrangements, but rather working with regimes through policing, surveillance, other types of regime security arrangements that are coming through PRC security agencies. But also deepen relationships and lead to openings for the PLA training and other activities that – again, I think you're right – over time, all of those things together accumulate.

I think maybe one thing to say about the U.S. strategy here is that when it comes to the vast majority of partners in Southeast Asia, the United States is not aspiring to somehow flip them into a U.S. ally like Japan or Australia. And I think the moniker of the United States is not asking Southeast Asia to choose between the United States and China is both true and a recognition of some of the economic and geopolitical realities. What we want in the affirmative case is to ensure a free and open Indo-Pacific where there's room for U.S. access and global access to commerce, ideas, people, technology, militaries. And the flip side of that is avoiding a situation of Chinese domination or Chinese hegemonic control. So, again, I don't think the adroit strategy here is looking at Indonesia or Malaysia or other partners in Southeast Asia and saying: “Okay, how do we flip them to be anti-China and pro United States?” I don't think that's realistic.

I think what we want to do is maintain sufficient relationships with these countries that we can continue to work with them on what we think is in many instances from a defense and security perspective, our shared aspiration. Because as much hostility as one finds toward the United States in Southeast Asia or towards certain things associated with the U.S. military, I don't think capitals in Southeast Asia are interested in becoming satellites in a China-dominated region, which I don't think would be in their interest in the short term or in the long term. So, again, I think this is about understanding that China is a cultural and historical and economic and geopolitical reality for Southeast Asia. And in that context, maintaining sufficient relationships so that we can continue to work together. And that's really the aspiration. So when we look at the kinds of PRC activities that you're describing, I think ensuring understanding that, yes, these countries are going to have some degree of military and defense cooperation with the PLA, and that is natural. And that should be okay. And the United States needs to operate within that and achieve its objectives within that. So very serious concern about them tipping into a direction of effective control, hegemony and domination in the South China Sea and Southeast Asia, but not an aspiration for U.S. primacy or dominance as the U.S. objective.

TRUMP ADMINISTRATION’S COMING DEFENSE STRATEGY AND INDO-PACIFIC DATAPOINTS TO WATCH OUT TO 2026

ASEAN Wonk: Right. And as you point out, China is known to use some of its nondefense levers for security gains. Southeast Asian countries also have agency to reject or shape those in ways that might be more beneficial for their own strategic interests. I wanted to move our conversation forward to the first national defense strategy of this administration, which as you noted we could see in the next few months, and the implications for U.S. defense policy heading into 2026. There are lots of uncertainties around aspects of policy – some of this is administration-specific, others relate to the churn you see in the first year of any administration. As we think about this national defense strategy and its release, what are you going to be looking for in terms of how we might define success in this new defense strategy, particularly its implications for the Indo Pacific and U.S.-China competition?

Dr. Ely Ratner: Yeah…

[Note: This is the end of a free preview podcast, with the full version in an earlier post published on June 26, 2025 available to our paying subscribers. This is not meant to serve as new content and is part of our free preview content within the dedicated website podcast section].

Our guest today is Andrew Goledzinowski who previously served as a senior career Australian diplomat with several posts within Southeast Asia, including as ambassador to Vietnam, high commissioner to Malaysia, as well as the first assistant secretary at the Southeast Asia Regional Division.

We will start our conversation talking about recent developments in Australia's ties with Southeast Asia. Be sure to tune in as we go through a range of other subjects, including the shifting geoeconomic landscape in the region and Australia's strategy on Southeast Asia as well as the Indo- Pacific and where that might be headed.

To receive full ASEAN Wonk posts and support our work, consider a paid subscription for $5 a month/$50 a year through the button below. For more on pricing for institutions, groups and discounted categories, visit this page.

Note: The transcript that follows the above free clip preview has been lightly edited for clarity and organized into sections for ease of quick browsing. For all ASEAN Wonk Podcast episodes, full video and audio podcasts, along with edited and sectioned transcripts as well as block quotes, will be a premium product for our paying subscribers, but we will include a short free transcript preview and a clip for all readers to maintain accessibility. Paying subscribers can find the rest of the full transcript and the full video podcast right below the paywall. If you have not already, do consider subscribing, and, if you have already done so and like what you see and hear, do consider forwarding this to others as well who may be interested. Thank you for your support as always!

GRADING AUSTRALIA SOUTHEAST ASIA ENGAGEMENT TODAY

So welcome to the podcast Ambassador and let’s get started. We've seen Australia record some notable wins in its engagement with Southeast Asia. There was a second special summit held last year, upgrades with countries including Vietnam, which you were involved in as well. At the same time, of course, just like with any other country, there are no doubt some limitations as well and challenges within Australia's wider approach. For example, on economic ties, there was a government commissioned report on investment in Southeast Asia that noted that Southeast Asia is just over three percent of Australia's investment stocks abroad, and there needs to be a lot more work to be done in that domain. I guess we can start with how you assess or grade Australia's Southeast Asia strategy? And you can use any sort of scale you want, whether it's a letter grade or a scale of one to ten.

Ambassador Andrew Goledzinowski: Gosh, that's a good question, Prashanth. I haven't been asked that one before. Well, look, from my point of view, our relations with Southeast Asia are as good as they ever have been. So from that point of view, I guess the relative trajectory and performance is very good. And you would have to say that the student is improving. But in absolute terms, it's not good enough, to be honest. I think I would give Australia a solid B. And the reason is that it's increasingly obvious that our future lies in the region, and our engagement has been successful but insufficient, I would say. And there are a lot of datapoints that suggest this.

I mean, politically, we're doing very well. You referenced the second special summit. And, you know, the fact that we can convene these, that the leaders come, that they all recognize that Australia is an important player in the region, is valuable, is worth engaging. Those are all positives. And I would say the sort of the less tangible atmospherics – the vibe, if you like – is also very good. The relationship is respectful. There are no major irritants, and all that is positive.

But as I say, it's not really enough. You referenced the fact that three percent of our overseas investments are in Southeast Asia. That is a damning data point, I think. For a country that is as open as Australia is, we're a trading nation. We rely very much on open communication and commerce. We have been sort of skipping over Southeast Asia for far too long. And there are some good reasons for that. Our institutions that invest are generally the big ones. It's our pension funds, which are ginormous: they have something like four trillion dollars in assets under management. Our big publicly-listed companies – the big four banks, for example –and the others, they tend to be very conservative investors. They prefer to invest in Australia or in North America, and they are not looking for big returns. They would prefer to be safe rather than get rich fast. And that holds us back a little bit. Because in Southeast Asia, you have to be prepared to take a little bit of risk. And most importantly, you have to be prepared to get involved. You know, we tend to sort of do things from over here and then eventually make an investment decision and then move over into Southeast Asia in a cautious way. But as I sometimes say, investing in Southeast Asia is a bit like crossing the road in Hanoi. And if you've been to Hanoi, you know that you can't plan it from the curb. You have to step out into the traffic and have confidence that you will navigate your way across. And invariably, you do. But it does require that first step, and we in Australia tend to be just a little bit chary of that.

“[A]s I sometimes say, investing in Southeast Asia is a bit like crossing the road in Hanoi. And if you've been to Hanoi, you know that you can't plan it from the curb. You have to step out into the traffic and have confidence that you will navigate your way across. And invariably, you do. But it does require that first step…”

DIRECTION OF TRAVEL IN BILATERAL AND SECTORAL ENGAGEMENT

ASEAN Wonk: Right. That's a great analogy on the sort of leap of faith amidst the motorcycles in Hanoi. You mentioned this notion of the vibe or the atmospherics or the narrative, which I actually think is a really important point. And for Australia, there have been a whole host of announcements in the past couple of years – a new green and digital shipping corridor with Singapore, work that was done with Vietnam to upgrade the relationship, and you just saw the Australian prime minister in Indonesia just after being elected in his first foreign trip talk about some of the economic opportunities with the Prabowo government. Given your perspective of having served in several of these different countries and also looking at the region regionally, what would you say about some of the notable movements on direction of travel, whether it's with respect to countries or sectors for Australia strategy in Southeast Asia?

Ambassador Andrew Goledzinowski: Well, I would say government is leading the way. You've referenced some of the initiatives. You've referenced that the prime minister himself has chosen to focus on Southeast Asia. The thing is, you know, it can't just be the government. We need the business sector. We need civil society. We need universities and others to also engage. And I think that's going to happen. It's beginning to happen. Of course, it's been happening for many years at one level. But as I said, I think it's inadequate given our geographic circumstances and the historical times we live in. Inevitably, we need to focus more on Southeast Asia.

Now we've been a bit distracted with the Pacific for good reasons. The Pacific is our backyard. It's the region where we feel that we can make the biggest impact. And the sort of strategic competition that has been developing in that part of the world has engaged us very strongly. So a lot of political capital, a lot of resources, money, but also people. The number of people that DFAT now has in our office of the Pacific compared to when I was working in the Pacific is quite extraordinary. And that comes at an expense, right? Because it's almost a zero-sum game. The more effort and attention you pay to one region, the less you have for the rest. I think that'll rebalance over time. And I've always believed that our fundamental strategic interests as well as our economic interests do lie in Southeast Asia.

And so the direction of travel, as you put it, I'm starting to see some small, not shifts, but accelerations. So in the university sector, a number of universities are now talking about either establishing or reviving or refreshing their Southeast Asian think tanks – the centers that they have focusing on Southeast Asia. I'm beginning to see more interest from the superannuation community. When I was in Vietnam just middle of last year, we hosted a big delegation of superannuation players who also went to Indonesia and elsewhere. It was kind of a very preliminary testing of the waters because their mandates are very restrictive. And Vietnam isn't yet even considered an emerging economy in terms of its ratings as an investment destination. But they're starting to show interest, and I think that will continue to accelerate.

The other way also is positive. Southeast Asia kind of knows us better than we know them, and partly because we have a huge alumni community there. I mean, Malaysia, we were just talking about, it's somewhere north of four hundred thousand people have studied in Australia or studied at Australian universities in Malaysia. That creates an enormous body of goodwill and interest in Australia. You know, I'm hoping that our more restrictive student policies now in Australia don't impinge negatively on that because it's that kind of people-to-people knowledge, confidence, and familiarity which then does enable other things like investment to happen.

VALUE PROPOSITION AND STRATEGIC NARRATIVE

ASEAN Wonk: You talked there about a very important component, which is the multistakeholder and multidimensional nature of Australia's engagement. And I think we've seen that even in some of the special summit engagements: Australia clearly messaging this about being not just about things like maritime security, for example, which are really important, but also students and bringing in the business sector. So there is clearly an attempt to do that. At the same time, as you're aware, in the region, there are pockets or circles where Australia is still perceived as either having a foreign policy and an approach that still is weighted a little bit too much towards the United States and the alliance, or perhaps having interests that lie elsewhere in other parts of the Indo-Pacific, like the Pacific, as you mentioned. How would you assess how Australia is doing with respect to articulating its value proposition and strategic narrative in the region? Because this is something that all of the countries are facing. It's a very crowded region where a lot of actors are trying to be involved. But it does also put more pressure on governments to define what exactly they're contributing relative to other governments.

Ambassador Andrew Goledzinowski: Yeah, that's a really good question. And it's true. I think the Southeast Asians sometimes scratch their heads a bit about Australia. But that's okay. You know, Dick Woolcott, former distinguished ambassador to Indonesia and elsewhere, the UN and secretary of foreign affairs, he once put it like this. He said, Australia is not the odd man out in Southeast Asia; we're the odd man in. And I like that.

And remember too that Southeast Asia is probably the most diverse subregion in the world. You know, religion, economic models, political traditions, it's really quite an extraordinary grouping of countries. And therefore, for us to be in there as well – not as a member of ASEAN, but as a sort of a member of the broader family – I don't think it's too odd a fit at all.

“Dick Woolcott, former distinguished ambassador to Indonesia, he once put it like this. He said, Australia is not the odd man out in Southeast Asia; we're the odd man in. And I like that. And remember too that Southeast Asia is probably the most diverse subregion in the world…for us to be in there as well – not as a member of ASEAN, but as a sort of a member of the broader family – I don't think it's too odd a fit at all.”

In terms of our value proposition, it's often been said that our sort of Western political culture and our ties to the US are a net asset for the region and seen as a net asset by those who engage with us. I think that has by and large been true. That might be changing now somewhat. But I think by and large, that sort of element of our strategic personality has long been accepted, and it's understood to be part of the package. But we are genuinely a first world country with first world offerings in services and technology, education, etcetera.

So those things are valued. The fact that we are committed to the region, I think, is valued because the United States, although it's important and seen as important, it's not been seen as a reliable ally. Whereas Australia, you know, we're not going anywhere. We're in this region for the long haul, and I think that's understood as well. So those are all positives. And I think people realize too that we mean no harm. That sounds a bit sort of maybe faint praise, but, you know, by and large, I think people do understand Australia and understand that our intentions are good even if occasionally the way we express ourselves may not always be, you know, ideal.

FUTURE ENGAGEMENT AREAS TO WATCH

ASEAN Wonk: I wanted to move the conversation forward a little bit in terms of where Australia's engagement and strategy may be headed in Southeast Asia. As we both just alluded to, we've seen a new Australian government that was just sworn in last month after the elections. And now that you're out of government, I'm wondering what you see as some of the specific next steps that Australia could prioritize in Southeast Asia – whether it's perhaps in your view unfinished business or new areas – in the coming years within, as you say, very dynamic and diverse region like Southeast Asia?

Ambassador Andrew Goledzinowski: Well, I mean, I think the political platforms are all in place. You know, we are a member in good standing of all the different groupings within the region that we might possibly want to join, and that's good. So we have the channels for dialogue and communication, etcetera.

Where we need to do more, I think – and, again, it's sort of consistent with our trajectory, but it needs to continue – is in the geostrategic defense security engagement. And I think there's a big market for that because the world and the region is becoming less certain and more complex and more dangerous, and also in the economic space for the same reasons. You know, the previous coalition government, I think, had an entirely appropriate and effective engagement with Southeast Asia. I think the current Albanese government is continuing that, but maybe with just a little bit more, I don't know, a bit more warmth. I think there's a different sort of style, which, maybe it's Penny Wong as our foreign minister, who's number three in the government and, of course, was born in Malaysia and knows the region very well. I don't know what it is, but I think it's very positive.

And so we've had this initiative as you referenced. It's called “Invested,” and the idea is too for the government to actively lead Australian business to investing in Southeast Asia. There are several difficulties. One is that we have another initiative of this government, which is called Made in Australia, which predates the new US administration's current obsessions. But it does reflect the fact that we slightly overdid the offshoring of manufacturing and the deskilling of that sector in our economy. We became effectively a resource country and a services country, and the manufacturing sort of fell away. And that has to be rebalanced. But you have this difficult dichotomy now where, at the same time, we're urging companies to invest in Australia, but also to invest offshore. And different agencies of government have the job of promoting these two sometimes inconsistent policy impulses. So we'll see how that goes. But those are the important areas.

Going back to the geostrategic again, you know, we are a growing military entity. You've seen the commitments to grow our defense budget to 2.4 percent of GDP by 2030, and we've seen the US urge us to go further than that. The prime minister has said that he's not that interested in the sort of percentage numbers. He thinks that's kind of artificial. His point is you decide what capabilities you need, and then you fund them rather than sort of working towards a number. Either way, it means that we will become an even more useful and valuable potential partner for the region than we have been. And it's not just hard power like military platforms. It's also intelligence. It's situational awareness. It's the training and cooperation we provide in areas like maritime domain awareness and maritime law. All of that, I think, is increasingly interesting for the region because they're interested in hedging. They're interested in maybe mitigating their reliance on the US, which maybe is less certain than it has been in the past.

So there's a lot of different bits and pieces there. I mentioned the universities. You know, I'm more and more convinced that the Australian university sector has a huge role to play in Southeast Asia. I think we're only just beginning to scratch the surface of what is achievable there. And it's not just the traditional model of selling education services, attracting students to come to Australia, spend three or four years here, drop a bit of money into the university coffers, and then leave again. I think it's more. It’s going to be deeper than that, and it'll include technology.

So Vietnam. I was recently in Vietnam to receive an honorary degree, and the speech I made was around the fact that Vietnam's ambition is to train 50,000 software engineers by the end of this decade and to create a genuinely competitive and viable semiconductor industry. To do that, they need a lot of help. Prime Minister Chinh has always said that there are three major hurdles for Vietnam to attain high income status. One is infrastructure, and they're working on that now. You've seen some very ambitious announcements on infrastructure, including high speed railways, etcetera. The second is technology. And, you know, one of the last important people I met in Vietnam before I left was Jensen from Nvidia. And, you know, those sorts of companies are now looking to Vietnam as a serious option. So technology can come quite fast if you've got the enabling environment. But the third obstacle, and that's where the universities come in, is training the people, and that takes years. You cannot fast track that. You know, high quality education is something which needs to be planned and rolled out over a period of time. And I think that the answer for Vietnam, for example, to kind of make that transition into a high technology future is to create an even stronger university environment where technology universities in particular come together with industry and government and create new pathways for research and training and exchange and partnership. I'm going be doing some writing about that in the next little while, but I honestly think that there are new ways to do this which have not yet been fully explored. And Australia, unless we really drop the ball, we should be at or near the front of that.

CALIBRATING REGIONAL ENGAGEMENT AND DIPLOMACY

ASEAN Wonk: Great. And you mentioned the geostrategic picture and the defense realm as well. And I did note that when Australia released its national defense strategy last year, one of the pillars there was partnerships, and Southeast Asia was placed as one of the priority regions within that. I'm wondering how you think about this notion of how Australia manages, balances, and calibrates between the various ways in which it engages in the security space. So bilateral relationships like with the Philippines, ASEAN relationships and minilaterals institutions like AUKUS and the Quad. I’ve long said there doesn't necessarily have to be a zero-sum perception between all of these various minilaterals, multilaterals and bilaterals. But there are some challenges as you know in making sure you're messaging, prioritizing, resourcing all of these mechanisms. And sometimes I feel like officials in some countries are running to all of these proliferating meetings. How do you think about this notion of how Australia calibrates, manages, and resources all of these partnerships and developments in the region in the security space?

Ambassador Andrew Goledzinowski: Well, I think….

[Note: This is the end of a free preview podcast, with the full version in an earlier post published on June 12, 2025 available to our paying subscribers. This is not meant to serve as new content and is part of our free preview content within the dedicated website podcast section].

Our guest today is Dr. Denis Hew, who spent over a decade as the director of the research arm of the Asia-Pacific Economic Cooperation forum (APEC) and also spent time before that in several other key economic institutions including the Asian Development Bank (ADB). We will start a conversation talking about the state of the regional economic architecture. Be sure to tune in to the full episode where we go through a range of other subjects, including Indo-Pacific geoeconomics, growth trajectories and what the regional, minilateral and multilateral landscape will look like into 2026.

To receive full ASEAN Wonk posts and support our work, consider a paid subscription for $5 a month/$50 a year through the button below. For more on pricing for institutions, groups and discounted categories, visit this page.

Note: The transcript that follows the above free clip preview has been lightly edited for clarity and organized into sections for ease of quick browsing. For all ASEAN Wonk Podcast episodes, full video and audio podcasts, along with edited and sectioned transcripts as well as block quotes, will be a premium product for our paying subscribers, but we will include a short free transcript preview and a clip for all readers to maintain accessibility. Paying subscribers can find the rest of the full transcript and the full video podcast right below the paywall. If you have not already, do consider subscribing, and, if you have already done so and like what you see and hear, do consider forwarding this to others as well who may be interested. Thank you for your support as always!

REGIONAL GEOECONOMIC ARCHITECTURE

ASEAN Wonk: So welcome to the podcast, Denis, and let's get started. I wanted to kick off with where we are in terms of the regional economic architecture. This is an architecture which, as you know having been in several of these leading institutions, went through a series of waves. In the nineties, for example, we had APEC come to the fore and there was some excitement about institutional innovation. If we skip over a few decades to the present, there's a lot more conversation about minilaterals, sectoral deals and smaller groupings. But at the same time, we still have ASEAN coming up with digital initiatives that are regionwide. That's a multilateral institution. In APEC, there are still efforts to try to revive notions like the Free Trade Agreement of the Asia-Pacific. How do you assess the role of regional economic multilateralism within this geoeconomic environment we’re in? Is there perhaps a little bit too much doom on the multilateral economic architecture than is warranted?

Dr. Denis Hew: Well, thanks for having me. I'm a pessimist at heart, but I think I can maybe share a little bit of optimism about the economic and trade architecture. As you mentioned, in the last couple of decades, in Southeast Asia and East Asia, we've seen closer economic and trade integration among these regions. And much of that has also been driven by the the establishment of global supply chains, particularly in manufacturing, electronics, semiconductors. And, of course, within ASEAN, it's been forging closer economic integration. It's got this big project, the ASEAN Economic Community (ASEAN), which was established more than twenty years ago, and they're moving forward towards their next milestone post-2025.

But we know the world's changed quite a bit, partly because of rising U.S.-China tensions, and we're beginning to see that kind of fragmentation in the global economy. There's also a lot of disappointment at the multilateral trading system at the World Trade Organization. There haven’t been many key major deliverables. The dispute settlement mechanism is still pretty stuck and not resolved. And a lot of the economic trade agreements have been protracted in trying to reach any conclusions.

“[W]e're beginning to see that kind of fragmentation in the global economy.”

So in terms of the trend as you're moving forward, you see, as you mentioned, bilaterals and economic kinds of minilaterals. A good example is DEPA, the Digital Economy Partnership Agreement (DEPA). So you've got a couple of like-minded countries which want to move forward. If they are stuck at WTO with a quest for an e-commerce agreement, and we want to move forward in terms of the digital economy, digital trade, one of the ways is to come together and try to form a partnership agreement among themselves.

The other big trend, of course, is that we're we're seeing a proliferation of free trade agreements, both bilateral as well as regional. And, of course, within this region, the big ones are RCEP, the Regional Comprehensive Economic Partnership Agreement (RCEP), which includes ASEAN and its and its five major trading partners, including China. And, of course, beyond in the Asia Pacific region, you've got the CPTPP, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). I believe it was a bit of a mouthful, but it's a reincarnation of TPP as we know, and that excludes the US, but includes some of the big and middle-sized economies. I guess the biggest challenge that we're facing here in terms of the economic architecture, particularly from the ASEAN perspective, is that ASEAN has always been known as for its strategic neutrality. It doesn't want to choose a side between US and China. We know that the US has a long presence in terms of foreign investments and technology transfers in this region. But we know that if you look at the supply chains that have been established, increasingly we see that a lot of those supply chains are linked to China. So, essentially, ASEAN member countries don't want to choose a side. What they want to do is do business with both countries. And that's one of the biggest challenges that they face right now.

“NEXT-GENERATION” GEOECONOMIC ISSUES

ASEAN Wonk: I'm glad you mentioned DEPA and some of these other sectoral, minilateral agreements because it does seem like these agreements are proliferating. You're you're seeing some in the digital space; you're seeing some on the green economy, for example. So that's a very interesting trend. One of the interesting conversations we're seeing as well is how we think about updating some of these existing agreements. So within APEC for example, they've characterized this as next-generation trade and investment issues. Things like sustainability and inclusivity. They were always there, but perhaps twenty or thirty years ago, they were not as much front and center. APEC released a report in the middle of last year, and they essentially mentioned that while there are a whole host of these next-generation issues, there hasn't really been an endorsement around areas of focus. There are still differences in views in areas like state owned enterprises, for example. How do you think about the areas that may gain traction within this basket of next generation issues?

Dr. Denis Hew: Yeah. Within APEC and also ASEAN, they've been talking about a lot of these next-generation trade and investment issues. We talk about sustainability, impact of trade from climate change and also digital trade. One of the biggest problems in APEC is that decision-making is based on consensus and because of the geopolitics of tensions between the US and China, we can't get a lot of things done. Because if you put on the table a major project looking at, say, the green economy, for example, for different reasons — nothing to do with the project itself — it could just be blocked. So over the last couple of years, we're not seeing a lot of traction in terms of building capacity and working together. And that's one of the biggest challenges. Some of the big topics that they've talked a lot about in terms of next-generation is, of course, sustainability. Increasingly, also the concerns of rising income inequality. And, in the past, we had big meetings being canceled because of demonstrations because of inequality and there's been an increased focus looking at the formulation of much more inclusive policies — social inclusion, financial inclusion, economic inclusion. So a lot of these things are being discussed.

But the biggest challenge, of course, is how do you get that implemented? And within APEC, you've got twenty one members. So getting a consensus of getting things done has become a lot harder. That's one of the reasons why you're seeing the rise of many of these minilaterals and sector-specific partnership agreements. They’re taking them out because they're stuck at WTO. They could be stuck in APEC or even ASEAN. A couple of economies coming together and moving forward, whether it's in terms of trade liberalization or opening up your markets to get things moving. And I don't see that trend subsiding anytime soon, and that's one of the biggest concerns. It's a concern partly because I'm a big supporter of the multilateral trading system. So the problem with a breakdown with the WTO is that the less developed countries will be the biggest losers because it's harder for them to do a future agreement with another country. We hope that a multilateral trading system can continue to work and that we might hopefully see some deliverables at the WTO this year.

MINILATERAL-MULTILATERAL LINKAGES

ASEAN Wonk: One of the things I mentioned earlier was this notion of the Free Trade Area of the Asia Pacific (FTAAP), where you'd see these trade agreements eventually coming together. As we think smaller with these minilateral groupings and sectoral areas, what does the grand vision actually look like? Maybe there is one; maybe not. But how do we think about the connection between these sectoral and minilateral agreements and what the broader regional vision is for everyone that's trying to work towards some of these goals?

Dr. Denis Hew: Well when it comes to minilaterals, a lot of them are WTO consistent. So the idea — or, I mean, grand plan, if you want to call it that — is that they can get an agreement done, say, in digital trade, and then if that expands, you have a large membership with more countries. DEPA is an example. Right now, it's got Chile, New Zealand, Singapore; and it’s open for more membership. And eventually, whatever agreement that they make could be taken back to the WTO, and you can restart negotiations, whether it's e-commerce or other things. So in a way, it acts as a bit of a catalyst. Now FTAAP is pretty much a grand plan, a really grand plan. I've seen that being discussed at APEC for years and years. Now the thing about FTAAP is that it's kind of a mega free trade agreement. And right at this time, I'm not too sure whether there's an appetite for yet another big regional free trade agreement. But the logic is that, from the economist's point of view, if you want to reduce trade diversion, that means that you're using a supplier with less efficiency or compared to a more efficient one, then the more members you have in a free trade agreement, the better it is. So that's why you've got an FTA. RCEP is the largest free trade agreement right now in the world. So you have these big features. You have less trade diversion, and you can facilitate an expansion of global supply chains or global value chains. So that's the general idea. So you've got these minilaterals working on one end, and you've got this big reach for the trade agreements. And hopefully, there's some kind of convergence among them. And I think that's the general sense that they have.

The biggest concern, of course, is you don't get convergence. You get this whole mixed of different kinds of trade rules, rules of origin. And in that sense, the biggest losers would be small companies. Big companies, big multinationals, no sweat for them because they've got big legal departments that can sort out the different kinds of trade rules, rules of origin, and work out which is best for them in terms of which bilateral or regional trade agreement. If you're a small- and medium-sized enterprise trying to expand your market, that's a challenge because you don't have the resources. So in that sense, it's up to governments to help them to go through all the different kinds of free trade agreements, sectoral agreements out there, and see what's best for them. Which countries they want to expand to: is it Asia? Is it Europe? Well, then you take this. Then I think you should sign up for this trade agreement rather than that one. So that's what's happening, I think, right now.

INDO-PACIFIC GEOPOLITICS-GEOECONOMICS DIVIDE

ASEAN Wonk: The other question to my mind is this notion of the Indo Pacific and how that fits in or does not fit in with the geoeconomic picture. I think if you look at it geopolitically, there's appeal to this notion of the Indo-Pacific. You have a larger role for India, the maritime connections between the Indian Ocean and the Pacific Ocean, and so on and so forth. And you have this proliferation of Indo-Pacific strategies. But if you look at the geoeconomic picture, it used to be that this was largely around the concept of the Asia-Pacific, and APEC was one manifestation of that back in the nineties. We've obviously seen some initiatives like the Indo-Pacific Economic Framework under the previous Biden administration or the ASEAN Outlook on the Indo-Pacific trying to connect the geopolitical and geoeconomic, with United Nations Sustainable Development Goals (SDGs) in there for example. Still, when I'm in conferences on geopolitics and then I switch over to ones on geoeconomic engagements, it seems like the Indo Pacific is a lot more of a geopolitical connector than it is a geoeconomic connector. How do you see the pace of adoption on the Indo-Pacific and where you see that headed in the geoeconomic domain?

Dr. Denis Hew: Well, it would have took off if the Indo-Pacific Economic Framework (IPEF) really was concluded because that would be a nice link up between IPEF and the the more strategic elements of the Indo Pacific strategy. We know that different countries have different Indo-Pacific strategies. You talked about that too, and ASEAN has its own ASEAN Outlook for the Indo-Pacific, which tries to find a way to not pick a side again. So it's got to get buy in from the US, but it's got to get buy in from China too. China is a partner of the AOIP. And that framework has a lot of potential, but right now it's not being implemented very well. I mean, it covers economic cooperation, maritime connectivity, supply chain connectivity. So on paper, it looks great, but you're right here that there's a bit of a disconnect.

More worryingly, we know what happened in 2023. There are four pillars to IPEF, and the most important pillar, which is the trade pillar, didn't work out. And so right now you've got three out of four kind of working. We'll have to wait and see what happens with President Trump, but it was an important way for the US to continue to engage regionally with the Asia Pacific region. And that would have fit nicely with the more geopolitical part of that strategy. So that's not there. So I think in that sense, you will continue to have that disconnect until the US can make some major decision or whether they want to continue with the economic part of the Indo-Pacific. And that leads to a bit of a vacuum.

In a sense, that's where China comes in. China is a member of RCEP. That's a big free trade agreement that's already being implemented since 2022. It's got an easy to use rules of origin that does facilitate regional content, global supply chains. So it's got great potential here to strengthen the existing supply chains. But you are going against this tide of onshoring, nearshoring from the US. So the challenge there is that you've got a lot of pressure from the US to force multinationals and other companies to move more of their operations to the US or near the US. And at the same time, you've got very established global supply chains that are linked to China in Southeast Asia and East Asia. So the worst case scenario is you are beginning to see a bit of that decoupling in terms of supply chains where there might be new supply chains which are exclusively linked to China through RCEP, and that could be a scenario that you’re seeing. It's not ideal in my personal view.

“So the worst case scenario is you are beginning to see a bit of that decoupling in terms of supply chains where there might be new supply chains which are exclusively linked to China…“

CHINA GEOECONOMIC “WINDOW OF OPPORTUNITY” PERCEPTION

ASEAN Wonk: You mentioned China. And as you said, there is a lot of attention on US tariff policy and the trade policy side. I'm quite struck by China's posture in all of this. We are seeing Chinese officials publicize things like a zero tariff policy towards certain countries and certain regions. You're going to see China host APEC in 2026. And, of course, China has come up with economic institutions of its own — the Belt and Road Initiative, for example, the AIIB, which, you know, has actually taken off from when we saw early US opposition. In talking to some Chinese interlocutors, I do sense that China believes there is a window of opportunity to position itself as being more proactive on trade and doing a little bit more geoeconomically and regionally in spite of the fact that it's got limitations of its own. How do you see China's inroads in this space and where do you think China's headed within this conversation in the next year or two?

Dr. Denis Hew: I think…

[Note: This is the end of a free preview podcast, with the full version in an earlier post published on May 8, 2025 available to our paying subscribers. This is not meant to serve as new content and is part of our free preview content within the dedicated website podcast section].

Our guest today is Dr. Anoulak Kittikhoun, who served as the CEO of the Mekong River Commission Secretariat from 2022 to 2024 after a decade of working in the organization that is central to the subregional architecture around one of the world’s longest and largest rivers confronting a series of major geopolitical, geoeconomic and security risks. Prior to that, he held several roles, including working at the United Nations Secretariat in New York and as an advisor at the Permanent Mission of Laos to the United Nations. We'll start our conversation assessing the current state of the Mekong River and architecture. Make sure you tune into the full episode as we dive into key topics, including the impact of intensifying geopolitical competition and major power dynamics.

To receive full ASEAN Wonk posts and support our work, consider a paid subscription for $5 a month/$50 a year through the button below. For more on pricing for institutions, groups and discounted categories, visit this page.

Note: The transcript that follows the above free clip preview has been lightly edited for clarity and organized into sections for ease of quick browsing. For all ASEAN Wonk Podcast episodes, full video and audio podcasts, along with edited and sectioned transcripts as well as block quotes, will be a premium product for our paying subscribers, but we will include a short free transcript preview and a clip for all readers to maintain accessibility. Paying subscribers can find the rest of the full transcript and the full video podcast right below the paywall. If you have not already, do consider subscribing, and, if you have already done so and like what you see and hear, do consider forwarding this to others as well who may be interested. Thank you for your support as always!

RISK ASSESSMENT CHECK

ASEAN Wonk: Welcome to the podcast Anoulak. And I wanted to get started with our conversation here talking about the river that gets a lot of attention today relative to perhaps ten or fifteen years ago, but arguably still not enough given the challenges that we're seeing. It's one of the world's longest and largest rivers running through mainland Southeast Asia. I was, in fact, just by the Tonle Sap, Southeast Asia's greatest freshwater lake in Cambodia during my trip a few weeks back. The risks from hydropower and climate change and the like have been well-documented. As a practitioner in the space, you've looked at these issues for a long time. How would you grade the state of the Mekong River today? And you can use kind of any metric you'd like, whether it's a scale of one to ten or a sort of letter grade.

Dr. Anoulak Kittikhoun: Well, first of all, thank you very much, Prashanth, for having me and this opportunity to talk to your audience about the Mekong and broader issues in the region. Well, like you said, the Mekong River, it's classified as one of the great rivers, along with the Amazon, the Nile, Mississippi, etcetera. So it is the largest, longest in Southeast Asia. It actually has the most fisheries in the world, even more than the Amazon. It’s the second most biodiverse only after the Amazon. I think top ten – it depends on how you count – in terms of basin size, flows, etcetera. Seventy million people, so sizable population. Six important countries, one superpower who is also upstream, and two regional important countries Vietnam and Thailand. And then you have Laos in the middle and Cambodia in the south, and a bit of Myanmar sort of on the side.

The Mekong Basin has caught attention in the water space, a lot in the environmental space, and sometimes in the geopolitical space, because of the fact that it is situated in mainland Southeast Asia, which is a geopolitical hotspot. But also because of its status as one of the great rivers of the world. It is very important for the economies of the basin countries. You know that Vietnam and Thailand are the two rice baskets of the world, so most of the rice come from the Mekong, and the delta of Vietnam is very important for the Vietnamese economy. It's also important for tourism. I think thirty percent of mainland Southeast Asia tourism comes from the Mekong, and it is increasingly important for energy. Laos has this ambition increasingly of being the battery of Asia – of Southeast Asia, maybe not Asia, it's too big. And Mekong energy – not just hydropower, but increasingly solar wind – are contributing to this. So it's very important for the economies of the region. And it's important for livelihoods, important for culture, history as well as for the people’s ties to the river.

But it's undergoing fundamental changes. Let me talk about the fiscal changes first. We used to have a more or less natural regime. In the wet season, you have very large flows. During the dry season, you have a very low flows, and people are used to that. But now because of, like you mentioned earlier, the building of dams – especially storage dams in China and in Laos – this has changed, and it has brought challenges as well as opportunities. Challenges, for example, during the wet season when you needed the water to flood some forest or wetlands, now you have a bit less. And in cases of drought, especially during the wet season, the storage by dams can also add or exacerbate drought. But there are some opportunities. Because during the dry season, you have a very low flow. But because dams release water during the dry season to generate electricity, then you can have possibly more water. That's good for irrigation. That's good for navigation, and that's sometimes good for drought relief during the dry season. So there are some challenges and some possible benefits.

But geopolitically is also challenging. Because it's an international river – six countries, different sizes, different stages of development. You have Thailand and Vietnam who developed parts of their base in a bit earlier, and now you have China developed in the 1990s, and now Laos and Cambodia are developing. So when you have national plans, whether they are dam projects or water irrigation projects or big canal projects, you tend to run into each other. And throughout the past decade or so, you have this contestation in the Mekong about a certain dam raising tensions with neighbors, and the possibility to have spillover effects into broader contestations and conflicts. It has not happened. I think part of the reason is we have a good institutional framework in the basin, one of which is the Mekong River Commission that I can talk a lot about, but also associated institutions. ASEAN, other Mekong frameworks, the relations between the countries, etcetera.

“And throughout the past decade or so, you have this contestation in the Mekong about a certain dam raising tensions with neighbors, and the possibility to have spillover effects into broader contestations and conflicts.”

GRADING REGIONAL ARCHITECTURE

ASEAN Wonk: You mentioned there a couple of points that I want to touch on. One is the Mekong River Commission itself and the MRC, which you helped lead. You really had a bird's eye view about how the organization works. It's an organization that, not unlike other subregional organizations, often comes under a lot of criticism for some of its limitations. It only has four of the countries as full members, and the other two are partner countries. There are some inherent limitations there. But like any regional, subregional or global organization, it is only as powerful as its members allow it to be as an intergovernmental grouping. And so, it's also a question of where the responsibility lies in terms of where the organization is headed. In your assessment, how do you see the Mekong River Commission faring – both its successes and then also its limitations – having seen its evolution throughout the years?

Dr. Anoulak Kittikhoun: Yeah. The Mekong River Commission was given a mandate in 1995 that is actually a broad mandate. It's to coordinate and promote the sustainable development of water and related resources of the Mekong Basin. So it's quite a broad mandate. It was not given a regulatory mandate like, say, some other river organizations in Europe or the European Commission. But it's given this mandate to be the coordinator, the promoter of good development. And it does that simply because the countries want to develop. The countries want to develop still, because we don't have a fully developed river yet. And it has four members. There's a whole history about why China is not a member, which I may not be able to talk about much, but it has four members – Laos, Cambodia, Vietnam, Thailand. And, in my assessment – unbiased – it has functioned to the best that it could be. So let's delve into the two key roles. One is to be some sort of water diplomacy platform of the basin. It's the only treaty-based organization in the Mekong. And second is to provide services to the country, such as river monitoring, studies, flood forecasting etcetera.

But let's delve into the water diplomacy angle. You know, as I mentioned in the beginning, we have had contestations over projects of the countries. For example, in 2010, Laos submitted to build the first mainstream then on the lower part of the Mekong – China has already built several in the upper part. Now that created a lot of tensions, including between Laos and Vietnam, who are usually friends on all sorts of things. But because for Vietnam, the delta is very important for the economy, for the people – twenty million people, right – you have to raise concerns, and you have to be fearful of that. And the countries could not agree on what to do. But at that time, with private investment ready, mostly from Thailand, Laos was determined to go ahead. And Laos being landlocked, this was one of the key resources to get the economy going and the country was determined to push ahead. But the Mekong River Commission came in, and, you know, we tried to manage this situation. There are some folks that said, okay, we have to have a more regulatory approach saying that if we could not agree, we could not go ahead. But there are some other folks who thought that, well, you know, we were never given this mandate to really say yes or no to a sovereign country's project.

So what is the next best thing to do? Well, let's help them. Let's assess from the technical point of view as best we can. If you were to go ahead, which we say is your sovereign decision, then here are several things that you need to do. Here are sort of conditions which you have to do. You have to improve the fish pass. You have to improve the dam safety. You have to improve the flow regime, making sure that you don't cause significant damage. You have to allow joint monitoring. If something bad happens, we have to come together and do something about it. So Laos accepted all that and invested additional I think half a billion dollars into the dam to make sure that this happens, while at the same time, you can say that they went ahead without full consensus. But fast forward ten years later, we have now seen the dam improve according to the technical recommendations and the transparency that brought about it. And even the Vietnamese and other international actors who were opposed initially said that that was not too bad. So that's a case of success.

And then for our services, I think we have one of the best knowledge in the world about the Mekong in the commission because of the investment that we have made into river monitoring, upgrading our models, including the latest technologies – artificial intelligence, etcetera – to be able to predict ahead when flood will come, what people should do about it. And this was put to the test last year when we had the big typhoon, Yagi, that flooded the mainstream for the first time in decades. And people appreciated the work of the Commission. So I think overall, there were some – like you said, what the countries made of it – which is their agreement or disagreement. They may probably disagree several times, but they could agree on some things, which is to still come together, to still talk, to still work it out, don't leave the table, improve the technical aspects of the cooperation, add transparency into the projects. And I think for even Laos, they went through this learning curve from being afraid of bodies like the Commission stopping their development and being more participatory in terms of sharing information, sharing data, but at the same time, determined to pursue development.

And also, there are several other cases with contestation with China, for example, that the commission stepped in and I think helped with the dialogue, with the information sharing. And recently, of course, you know, there there's a country downstream that proposed a big project. We were not as public in our diplomacy on this, but we were very active behind the scenes in terms of assessment, in terms of dialogue, in terms of quiet diplomacy. So there are several things that you do, depending on the situation, depending on views or the interests of the country, and how much they want to engage at first. But I believe that the institution of the commission is established, procedures are in place, guidelines are in place that one day or another, countries that maybe hesitate in the beginning would come back to cooperation.

And also, there are several other cases with contestation with China, for example, that the commission stepped in and I think helped with the dialogue, with the information sharing.

CAMBODIA’S BIG CHINA-BACKED CANAL PROJECT AND FUTURE PROSPECTS

ASEAN Wonk: You mentioned there Cambodia's Funan Techo Canal project, one of the projects that emerged recently with support from China. What was that project's experience and how has the Mekong River Commission dealt with it? Because that definitely was one of the cases where there were some public elements to that, but as you said, lots of quiet conversations going on as well.

Dr. Anoulak Kittikhoun: Yeah, I mean, to Cambodia's credit, they did submit the notification to the Commission, I think, in late 2023, with information about what they plan to do with the canal in terms of connecting two major rivers. One is the Mekong, one is the Bassac, and then out to the sea in the Gulf of Thailand. So, naturally, when you have this kind of plan, it invites a lot of passion. Because especially if you're downstream and you depend on the river coming upstream, if I was Vietnamese, I would also have this concern. And I look at the information that is in the public and and pronouncements around it, I would be naturally concerned because maybe I don't have as much water coming to me because of the possibility to divert and all of these things.

But after they submitted, we went to work. We reviewed the information. We requested for more information. Vietnam requested for more information. And I think at the technical level, they were very cooperative, very good discussions going on. But I think somewhere along the way, there was a determination from the top in Cambodia that this is the national interest, and for various reasons. One, I think, historical, and that we needed to do this. And we have studied. We have lined up good developers to be able to do this, and all we needed was finance. And China was sort of a key player in this. But even without China being the biggest investor, I think Cambodia would muster – at least they say, even publicly – that they would master private sector support in Cambodia itself.

But behind the scenes, we went through a bit of headache, to tell you the truth, because the space that was given to us was very limited. But we stood our ground as a secretariat, the technical and executive arm of the commission. We stood our ground and said, okay. We have a concern from the public and from a member country wanting to know more information. They never said they don't support the project. Actually, Vietnam supports Cambodia's development, they said. But they want more information. They want the commission to facilitate dialogue on this project and to do what we have done with the Lao projects and dams, which came out to be quite reasonable in terms of development, and to do the same with the Cambodian project. So behind the scenes, we did some assessment of the project, and we came to very initial conclusion about the impacts. It's not the end of the world, you know? And we quietly said this indoors behind the scenes, and that internal report is with the countries.

“But behind the scenes, we went through a bit of headache, to tell you the truth, because the space that was given to us was very limited.”

And we have several recommendations going forward, one of which is to have Cambodia provide a technical briefing to us, the commission, at that time, if we understand this correctly or not, and then to let us visit whenever they're ready. We're not going to push to visit. Whenever they're ready, we visit. And depending on particular points that are of concern, maybe we can do targeted assessment. And while they're developing the project, there's no reason to stop the project. We can do that at the same time. And in the end, we can also jointly monitor, because that gives confidence, especially to downstream countries and stakeholders that whatever you promised in the beginning that you will not cause impact will actually not happen. So this is very standard MRC business on how we do things. And so we put it out there, and I think one day, I believe that once the project really starts going, it will come back.

RIGHTSIZING CHINA DOMINANCE FEARS

ASEAN Wonk: Thanks for that overview of the challenges, processes and dynamics involved in managing all of these interests. You mentioned China a couple of times already in this conversation. The Mekong regional architecture, as you mentioned, is filled with frameworks. You’ve got ACMECS developed by Thailand, the GMS framework with the Asian Development, and you have the Mekong U.S. Partnership. And there's been a sense as well, even though there are these different frameworks, that over the past few years at least, that China's Lancang Mekong cooperation framework and China's initiatives in the Mekong more generally have come to increasingly dominate – perhaps overly dominate – the Mekong regional architecture. I'm wondering what your sense is of that sort of balance of power within the Mekong architecture, of which the MRC is a part. Is it your sense that this sense of domination by China is starting to play out in terms of the architecture?

Dr. Anoulak Kittikhoun: I mean…

[Note: This is the end of a free preview podcast, with the full version in an earlier post published on April 24, 2025 available to our paying subscribers. This is not meant to serve as new content and is part of our free preview content within the dedicated website podcast section].

Our guest today is Ambassador Pou Sothirak, who previously served in the Cambodian government since 1993 in various positions, including as Ambassador to Japan and Secretary of State at the Foreign Ministry. We'll start our conversation talking about Cambodia's current foreign policy trajectory and neighborhood ties in mainland Southeast Asia and the Mekong subregion. Make sure you tune into the full episode as we go through a range of other subjects, including Cambodia's relations with major powers and where the country and the region is headed geoeconomically and geopolitically.

To receive full ASEAN Wonk posts and support our work, consider a paid subscription for $5 a month/$50 a year through the button below. For more on pricing for institutions, groups and discounted categories, visit this page.

Note: The transcript that follows the above free clip preview has been lightly edited for clarity and organized into sections for ease of quick browsing. For all ASEAN Wonk Podcast episodes, full video and audio podcasts, along with edited and sectioned transcripts as well as block quotes, will be a premium product for our paying subscribers, but we will include a short free transcript preview and a clip for all readers to maintain accessibility. Paying subscribers can find the rest of the full transcript and the full video podcast right below the paywall. If you have not already, do consider subscribing, and, if you have already done so and like what you see and hear, do consider forwarding this to others as well who may be interested. Thank you for your support as always!

GRADING CAMBODIA FOREIGN POLICY

ASEAN Wonk: So welcome to the ASEAN Wonk Podcast, Ambassador. Thank you for joining us, and let's get started. It's been around a year and a half since Hun Manat took over as Cambodia's prime minister in August 2023. We've seen some very interesting foreign policy developments beyond some of the developments that have made the headlines, such as Cambodia's withdrawal from the Cambodia-Laos-Vietnam Development Triangle area. We've also seen some stepped-up cooperation with Japan on the security side. Cambodia was selected as the host of the Francophonie summit in 2026. Some high-level defense interactions as well with the U.S. As someone who's been a longtime practitioner, how do you assess how the government is doing with respect to foreign policy? And you can either go with a letter grade or some other metric, but more importantly. And more generally, what are the successes in your view and also what are the challenges that we're seeing for Cambodia?

Ambassador Pou Sothirak: First of all, thank you very much, Dr. Prashanth, for having me in your program. I'd like to congratulate you at the outset for being a window of knowledge for a wide range of issues that concern Southeast Asia, as your platform has been very popular here, and I'm a keen observer. Actually, I read quite a bit and learn a lot from you. So thank you for your questions.

With regard to the success and the challenges with the new government, I would like to say that Prime Minister Hun Manet and his young team are, to me, the next generation of leadership for Cambodia. They are very well educated. Many of them— in fact, more than 90%— have a higher degree from abroad, including the prime minister himself, who holds a PhD. They are very energetic. They come with fully charged batteries, if you may.

I think one of the things that stand out as far as success stories are concerned is that since taking office, it has been 18 months now. I observe that his priority is to reengage Cambodia with the world, particularly those countries that Cambodia classifies as important. So within the 18 months in office, he initially very quickly 18 state visits to meet with different heads of state or government. These included trips to Indonesia, China, UN General Assembly, France, Saudi Arabia, Vietnam, Japan, Switzerland, Malaysia, Thailand, Australia, Laos, Thailand again, the Republic of Korea, and Singapore. With special attention, he visited China officially three times, the most, and twice to Indonesia. This highlights his preoccupation with re-engaging Cambodian foreign policy at the global level and also at the regional level.

“I observe that his priority is to reengage Cambodia with the world, particularly those countries that Cambodia classifies as important.“

Another success story, to me, is more of the pledges that he made. But as I mentioned to you, he represents a relatively new young generation with a lot of energy and vitality. However, it is too short to really give a scorecard on a scale of anything. But I think you need to include some of Cambodia’s achievements under him as his leadership continues. For example, Cambodia's pledge to global issues like climate change. Cambodia pledged to become carbon neutral by 2025. We want to transition to clean energy, including green energy—not necessarily just hydropower. There’s still a lot of debate here, particularly related to the Mekong. Digital transformation, I think, is also high up on his agenda. He wants to fast-track Cambodia toward that end as well.

On regional issues, I think under his leadership, he wants to make sure that Cambodia continues to viably contribute to ASEAN efforts and speed up regional integration. More specifically, operationalizing the Five-Point Consensus in relation to Myanmar. I can talk more about this if you wish. He also wants Cambodia to be a member of ASEAN whereby it can effectively manage the ASEAN way and ASEAN centrality amid this flux, particularly in big power competitions, to maintain the relevance of ASEAN and all ASEAN frameworks, including EAS, ADMM+, the ARF, APT, and more. I think issues related to the Mekong are also part of his agenda.

But again, like I said, this is a big task. Eighteen months is a short time to fully evaluate how much he has achieved. I think we need to give him a bit more time, so to speak. Now, scaling down to domestic issues, I think some of the challenges remain. So the pledge can also be a challenge, in my view. Domestic challenges include maintaining peace and stability, particularly political stability in Cambodia. Cambodia has a long history of having a loyal opposition. You know the term loyal opposition, that you're loyal to your country? We have some difficulty in there. So it becomes more of a challenge between personal and individual interests. I don't have to name names—you know what I mean.

That’s why I said Cambodia still considers peace, stability, and economic growth as its main challenges. And economic growth, needless to say, has been affected by the post-COVID-19 recovery. The post-COVID-19 rebound is not happening in the way Cambodia would like it to be.

As you may know, pre-COVID, we were experiencing double-digit growth—10, 11 percent. But now, in the past year, the World Bank rated Cambodia at 5.6%, I believe, or 5.8% growth. These are issues. Additionally, Cambodia has pledged to become a middle-income country by 2030 and a high-income country by 2050. He is full of aspirations, and I sincerely not only wish him well, but if I can do anything in any way possible, I would support him strongly. I like to see young generations take leadership in Cambodia, which is a new country emerging and trying to do its best to be a responsible member of the international community, particularly maintaining ASEAN’s relevance.

Maybe this is too weak of an assessment. If you want to have a follow-up, I can add some spice if you wish.

DIVERSIFICATION RHETORIC AND REALITY

ASEAN Wonk: That's a terrific overview about a very sort of long series of opportunities, but then also, as you say, some challenges as well in this very contested landscape. A lot of these challenges are also shared challenges. I wanted to follow up a little bit on something you said earlier in your comments. If I were to summarize the conversation about how Cambodia is talked about in a lot of the commentary over the past year and a half in a single word, it is this question as to the extent to which Cambodia is diversifying relationships relative to the opposing view, which is that Cambodia has become overly reliant or seemed to be overly dependent on China. That's a very short-term view of what's been happening over the past few years. But you've served in government in various capacities since basically Cambodia was transitioning away from the United Nations presence in Cambodia in the post-Cold War period, which we talked about briefly before we came on here. So you have this longer-term view of Cambodia's foreign policy. To the extent to which Cambodia's foreign relationships are diversifying or not, how much of this is continuity versus how much of this is change in your view?

Ambassador Pou Sothirak: Yeah, very good questions. You know, in Cambodian foreign policy statements, we aspire to be a friend to everyone, whoever wants to be friends in a state-to-state relationship. The question about the perceptions that Cambodia overly looks to kind of align itself more closely to China, as opposed to, as I mentioned to you, Prime Minister Hun Manet, a young generation leader who wants to posture his image as a friend to the world: in such a short time, I think it is astonishing to see he focuses very much on projecting himself in a regional and global arena. With regard to Cambodia, when we want to diversify foreign policy, not to put all the eggs in one basket.

The question you asked is very pertinent in my view, but you have to understand also, you know, there's a saying that it takes two to tango. Cambodia wants to, or it seems like Cambodia always goes to China for whatever reason. But it's because China also wants to come to Cambodia and offer something. So, you know, people, when you debate about this, say: “why you said you want to be friends with everyone, but you always, you know, a lot of Chinese in Cambodia?” Not so much so nowadays. But previously, it's the question about China also seeing Cambodia as a strategic partner in promoting Chinese footprint in this part of the world, and that has not been appropriately debated. It's always, "Why, Cambodia, you want to be friends with the U.S., but the Ream base and all these human rights issues and so on."

And why is it China? Because China gives a lot, gives almost – you know, we, in the Cambodian mindset – think that China has a long hand for Cambodia. That means the wish list that Cambodia has for China is a priority. Whatever we wish for, we almost get it, you know? But I'm not so sure whether this routine or this business as usual in terms of relationships is continuing at this level. If you have more questions, I can talk about how I see Cambodia engaging China. But just to focus on the comparison between foreign policy as a friend to everybody and, as opposed to an action that plays out that Cambodia keeps going to China. It's also because China has a strategy to engage Cambodia – such a small state, to be very honest with you – and with the kind of offer that China gives, I have to say Cambodia has made the right choice, you know, to take whatever China gives to us. I'm just hoping that my government – and with all due respect, they've done very well – but I'm just hoping that whatever the Chinese give to Cambodia is not about short-term gain at the expense of the long-term benefit of Cambodia.

“[I]'m just hoping that whatever the Chinese give to Cambodia is not about short-term gain at the expense of the long-term benefit of Cambodia.”

That's the only thing I'm requesting. If I may say, we need to also be very careful when we're using Chinese money and that our long-term benefit in being a good member of the international community is not diluted: an effective member of ASEAN is not being diluted. And I don't think my government is turning that option away. It's just that you also have to see from the Chinese angle: why is it that China focuses so much on Cambodia? So I stop here just to make sure that you understand, and it takes two to tango.

China also engages Cambodia very earnestly, I mean, of course, in my view, benefiting China a lot, but also not to undermine the Cambodian desire to be a friend to every country in the world. So those countries who want to be friends with Cambodia, I suggest that they have to make Cambodia know that they are prepared to offer, in a constructive way, to help develop the Cambodian economy, to help Cambodia become a good standing member of the international community, to increase Cambodia's voice in international affairs. In other words, engage Cambodia constructively. I don't think that the government of Cambodia will say no. So I stop here.

INTRAREGIONAL COMPETITION AND TENSIONS IN THE MEKONG AND MAINLAND SOUTHEAST ASIA

ASEAN Wonk: Thanks Ambassador. And you made a good point there about making sure that we understand this in terms of the risks and opportunities that Cambodia sees in its relationships – whether it's with China or with other countries – and how does that balance between the short term and the long term. One other piece of what you said in your initial response was Cambodia's relationships with its neighbors in mainland Southeast Asia. And as you know, this has been a consistent theme all the way from the Khmer Empire to some of the events in Cambodia's history like Vietnam's former occupation of Cambodia, and so on and so forth. We've also seen quite a few changes in the neighborhood in mainland Southeast Asia. We have a new Thai Prime Minister since Hun Manet came into office. We've had a couple of leadership changes in Vietnam, some reshuffles in Laos. So it's a very interesting and very dynamic time in mainland Southeast Asia. We also did see, as I mentioned earlier, some regional conversations about the Funan Techo Canal, the plans for that as well. And we've had well-known Cambodian officials like Sun Chanthol, for example, try to reject some of the criticisms that this is something that is going to be a challenge regionally within the sort of environmental challenges, the social challenges, which, as you referenced, also tie into broader dynamics like on the Mekong River. So I'm wondering how you assess Cambodia's neighborhood relationships in the subregion in terms of the challenges there and then also some of the successes in this respect? Because I think like many other states in Southeast Asia, we can talk about major powers as we will do later in our conversation, but the neighborly relationships are extremely important in how these countries navigate their foreign policy

Ambassador Pou Sothirak: Yeah, another very outstanding question…

[Note: This is the end of a free preview podcast, with the full version in an earlier post published on March 27, 2025 available to our paying subscribers. This is not meant to serve as new content and is part of our free preview content within the dedicated website podcast section].

Our guest today is Minister Han-koo Yeo, who was South Korea’s trade minister and a key advisor to former president Moon Jae-in who launched Seoul’s New Southern Policy towards Southeast Asia. He served for nearly three decades in public service. He was involved in talks over regional economic agreements including the Regional Comprehensive Economic Partnership and the Indo-Pacific Economic Framework. We start our conversation talking about the growing intersection between national security and geoeconomics in Southeast Asia and the Indo-Pacific. Tune in to the full episode as we go through subjects including China Plus One strategies, the future of the CPTPP and RCEP agreements, geoeconomic minilaterals, middle power diplomacy and the evolving agenda in institutions like APEC.

To receive full ASEAN Wonk posts and support our work, consider a paid subscription for $5 a month/$50 a year through the button below. For more on pricing for institutions, groups and discounted categories, visit this page.

Note: The transcript that follows the above free clip preview has been lightly edited for clarity and organized into sections for ease of quick browsing. For all ASEAN Wonk Podcast episodes, full video and audio podcasts, along with edited and sectioned transcripts as well as block quotes, will be a premium product for our paying subscribers, but we will include a short free transcript preview and a clip for all readers to maintain accessibility. Paying subscribers can find the rest of the full transcript and the full video podcast right below the paywall. If you have not already, do consider subscribing, and, if you have already done so and like what you see and hear, do consider forwarding this to others as well who may be interested. Thank you for your support as always!

REGIONAL MODELS IN RIGHTSIZING SECURITIZATION: BEYOND THE SMALL YARD AND HIGH FENCE

ASEAN Wonk: Welcome to the podcast Minister and let's get started. I wanted to kick off with where we are on a big picture question, which is the fact that national security is infringing more and more on traditional economic conversations. The most vivid encapsulation of this is the past U.S. administration's notion of a “small yard high fence.” That, for me, has always raised a more interesting question that applies to Southeast Asia and the Indo-Pacific: how are other regional states thinking about their own yards and fences, and where do we draw the lines? It's easier when you're talking about things like artificial intelligence or shipbuilding to say there are national security implications. But when you're talking about banning electric vehicles and other issues, it becomes a bit more complicated. Some people say it goes too far, other people say these are effectively computers on wheels. What is your sense of useful models about how we right size this balance between national security and geoeconomics? What are some examples of where we might have more of a connection and some areas where perhaps we need a little bit more of a separation, relatively speaking?

Minister Han-koo Yeo: First of all, thanks for having me. It's really great to join your excellent program. I think that question is a really timely and important one. I think one of the new trends we are witnessing in this global economy is securitization of these economic issues. Previously, economy was economy, security was security. But because of the changing nature of these foundational technologies of digital, AI, et cetera, and then this geopolitical tension and rivalry between US and China, we are seeing more and more these security issues are being interconnected or intertwined with these economic issues. As you mentioned, this “small yard, high fence,” I mean, that is in principle what the previous Biden administration was trying to achieve. But, actually, more and more in reality, we are seeing a kind of big yard, higher fence. I think it is important to strike a right balance between these economic issues and security issues. Because right now in this era of geopolitical tensions, there is legitimate concern about the security issues because of all these digital AI technologies that have national security implications. But you don't want to overdo or overshoot to the extent that you isolate your industry from competition. And then basically this competitiveness is eroded. So I think one of the interesting comparisons is the US as well as EU approach. For example, a few months ago, the Department of Commerce in the United States tried to ban software as well as hardware related to electric vehicles from China. On the other hand, the European Union, they actually welcomed this foreign direct investment from China into European soil in electric vehicles. But then they have these privacy or digital cyber security-related regulations in play. So if we think about these two different models, I think the US model may make you feel more comfortable in the short term protecting national security and private privacy. But the fact is that on competitiveness of these EVs and the battery technology, China is number one, you know? They are surpassing many of other countries. And if you just isolate yourself from this competition with Chinese EV makers, then I think, five years later, ten years later, you run the risk of really falling behind in terms of this competitiveness. So what is the right balance between these legitimate security concerns and keeping this competitive edge by opening up? So I think we should be careful not to take this all or nothing approach. I think there's a fine line between these contrasting policy goals.

SOUTHEAST ASIA’S ELECTRIC VEHICLES LANDSCAPE AND CHINA’S ROLE

ASEAN Wonk: I do want to hone in a little bit more on the EV example that you mentioned because I know you've been to China and studied the electric vehicle ecosystem closely. This is something which in Southeast Asia, as you know, Chinese EVs are accounting for the dominant share – some people say nearly a bit over seventy percent of sales from the previous year. But at the same time, if you look closely at the regional data, the EV share of overall car sales in Southeast Asia is still quite small, relatively speaking, and that has been dominated mostly by Japan historically. And so, we arrive at an issue in some of these regions like Southeast Asia which is seeing a range of approaches on how to approach EVs. You talked about the US approach, the EU approach. I think if you talk to policymakers in countries in the region, they might say the market is still developing: we don’t want to necessarily take any sudden moves. But looking at historical examples, how do you think we should think about how to manage this ecosystem? Because clearly, China has made inroads here. And it's now pushing a lot of these sales through Chinese companies in other regions of the world. Some countries welcome that. Other countries, as you've seen with VinFast in Vietnam, there are some local players there as well. Some other countries like Thailand are welcoming it but then also introducing some ways of managing it. So what are your suggestions about what the balance is in that approach on how we manage this China EV story? Because it is a pretty big story in the region.

Minister Han-koo Yeo: That's a very important and difficult question. Let me first share my experience of having visited one of the EV factories in China for Xiaomi. I think it was actually really mind-blowing. Because when I visited there, it was like an Amazon kind of warehouse, highly automatized: it looks like the automation rate is over ninety percent. And more striking is that they pulled it off in three years. I mean, they started this in early 2021 in the middle of the COVID-19 pandemic, and then they began to turn out this fancy-looking EV in I think April 2024. I think that is only possible in China because through three or four decades of this rapid industrialization, China was really able to develop a full-scale supply chain. For example, in EVs, starting from critical mineral batteries and then all these digital software or hardware components. So I think it is really unbelievable how much China achieved in such a short period of time.

So with that, does it offer challenges or opportunities to Southeast Asia? I think both. First, I think opportunities. All these developing countries want to enjoy the benefit of this energy transition and electric vehicles with much cheaper price and higher quality. And I think China is providing this public good to the Global South. But also, we learned the lesson that in this industrial era, you don't want to have overreliance on one player. We realize that overdependence on one country could cause big supply chain shocks or disruptions. Also some of these Southeast Asian countries, they have a national ambition to develop some sort of a local industrial base, whether it's a finished EV vehicle or just some parts of this supply chain. So you also want to strike a balance between importing cheap, high-quality EVs from China or any other countries, but also maintaining some of your industrial base.

So I think that's actually where the role of the government comes in. I think one of the new trends in this global economy is industrial policy, right? And many people tend to see industrial policy as equaling big checks or big financial subsidies. But I think there are many other components, which require less financial resources but smart policies. For example, worker training and then linking the universities, the industrial R&D and so on. So I think there are many ways in which governments in Southeast Asian countries can actually deploy some of these smart policies to really maximize the benefits coming from these new industrial policies and the energy transition.

“[M]any people tend to see industrial policy as equaling big checks or big financial subsidies. But I think there are many other components, which require less financial resources but smart policies.”

SECTORAL DERISKING IN PERSPECTIVE

ASEAN Wonk: That's a good point you made Minister about making sure that we're thinking about industrial policy more comprehensively. So not just giant subsidies, but thinking about other aspects like human capital, as some of the Southeast Asian countries like Vietnam are doing in areas like semiconductors. A lot of the challenges that they have are not just on the technology component, but also making sure you have the right human capital to build a whole ecosystem approach around these areas because they are quite transformative in nature. So we talked a little bit about EVs. You mentioned this balanced approach that countries should take between making sure national security considerations are addressed, and also making sure they’re sticking to economics for economic sake – notions of efficiency and competitive advantage. Are there other sectors where you think they offer good examples, either where governments need to intervene and do more, or whether governments need to step back and do less? I think shipbuilding is one that's gotten a lot of attention in the United States and more generally in the Indo-Pacific in terms of China's role there: China is now a shipbuilding giant in addition to being the world's largest navy. But are there other sectors you think where this comes to play? What is your sense of the sectoral distribution here in terms of risks for national security?

Minister Han-koo Yeo: I think another opportunity that I wanted to point out is that more competition coming into this ASEAN market could benefit not just consumers, but also the industrial base. Previously, the Southeast Asian market was in fact dominated by Japanese automobiles. But with the emergence of new EVs from China, I think this Southeast Asian market is getting a bit more diverse and more competitive. And I think this is good for the producers as well as consumers. So this is one thing.

And also, you took the example of Vietnam, and I think that Vietnam is really a good example of how a country can really strategize their pathway towards being integrated into the global ecosystem and then trading system. Vietnam has been quite proactive in forging these free trade agreements, whether it's bilateral or plurilateral, right? And for example, Samsung stayed early on, even before these geopolitical tensions materialize. If you look at how that evolved for the last decade or so, at the early stage, there was no local ecosystem. But the Vietnamese government instituted some of these human talent programs and training programs, so that the government chips in and the company chips in to develop this local talent and local, small and medium enterprise development program. So I think right now, many of these parts and intermediate goods that this company used to import have been localized. So I think this is a really good opportunity for companies. First, they attract this foreign investment into a sector. But then with very smart government policies, I think they really spread this local ecosystem. And I think that's what every country wants. So that's one thing.

You mentioned which industrial sector. I think it really depends on each country. They have to really analyze what are the competitive advantages they have, whether it's natural resources or human capital or something else. I think Malaysia was also very smart, because they identified packaging as one part of this semiconductor supply chain. And the government really developed infrastructure and technology, which is very conducive to attract all these multinational companies in the semiconductor industry. So actually these intensifying US-China geopolitical tensions played as an opportunity for some of the Southeast Asian countries, including Singapore, Malaysia and Vietnam.

LIKELIHOOD OF “CHINA DOMINANCE” IN FUTURE INDO-PACIFIC GEOECONOMIC SCENARIOS

ASEAN Wonk: The point there that you made minister about comparative advantages is an important one. Malaysia within the semiconductor space has been one of the early players because of the concentration of activity in Penang. And the struggle for some of these countries that are early starters is how do you move up the value chain. Whereas for other countries like Vietnam, it is starting from a different place and the question is how do they leverage those advantages. I wanted to hone on something you mentioned earlier on China. All of these countries in Southeast Asia to various degrees think about China geoeconomically as both a challenge and an opportunity. And depending on which regime and which country, the emphasis on that will vary. One of the scenarios we often hear about is this notion that the Indo-Pacific may be geoeconomically dominated by China. It already is about nearly half of Asia's GDP essentially, so it’s quite a significant presence. I also have a bit of trouble, frankly, with this very simplistic notion because there are so many different players – Japan, South Korea and others. If you were to assign a percentage to this China dominance scenario in the Indo-Pacific, what percentage would you assign the scenario actually coming to pass? How worried should we really be about the scenario coming to play in the future?

[Note: This is the end of a free preview podcast, with the full version in an earlier post published on March 20, 2025 available to our paying subscribers. This is not meant to serve as new content and is part of our free preview content within the dedicated website podcast section].

INTRODUCTION

Our guest today is Ambassador Vicky Bowman, who has over three decades of experience in international relations and business, including serving as Britain's former ambassador to Myanmar. We'll start our conversation talking about sanctions and Myanmar’s current foreign and economic links including within ASEAN. Make sure you tune into the full episode as we go through a range of other subjects including major power involvement in Myanmar and the future geoeconomic and geopolitical landscape in the country.

To receive full ASEAN Wonk posts and support our work, consider a paid subscription for $5 a month/$50 a year through the button below. For more on pricing for institutions, groups and discounted categories, visit this page.

Note: The transcript that follows the above free clip preview has been lightly edited for clarity and organized into sections for ease of quick browsing. For all ASEAN Wonk Podcast episodes, full video and audio podcasts, along with edited and sectioned transcripts as well as block quotes, will be a premium product for our paying subscribers, but we will include a short free transcript preview and a clip for all readers to maintain accessibility. Paying subscribers can find the rest of the full transcript and the full video podcast right below the paywall. If you have not already, do consider subscribing, and, if you have already done so and like what you see and hear, do consider forwarding this to others as well who may be interested. Thank you for your support as always!

RIGHTSIZING THE ROLE OF SANCTIONS IN POLICY

ASEAN Wonk: Welcome to the ASEAN Wonk Podcast, Vicky. Thank you for joining us and let's get started. One of the periodic focus areas or topics in the headlines on Myanmar is the use of sanctions. We saw the US add the telecommunications firm Mytel to its sanctions list, which is part of an ongoing process of so-called targeted sanctions that have touched on various areas including finance and aviation fuel. The use of sanctions has been billed as a tool in the wider toolkit for some governments. And there's long been a debate in terms of academic and policy circles on how smart or targeted you can make sanctions, in terms of making sure that you're punishing the regime for actions it's not taking, but also ensuring that you're insulating the rest of the population from some of the impacts that are actually happening. As somebody who has been observing and helping shape policy in Myanmar for decades, how do you assess the current state of how Western countries, including the UK, the US, are calibrating their approach to sanctions relative to other levers that you can use in policy to address the ongoing situation in Myanmar in terms of its politics and its economic development?

Ambassador Vicky Bowman: Thank you, Prashanth. Thank you for inviting me on ASEAN Wonk. It's a delight to be here. What you have just said really takes me back to when I was ambassador, which was between 2000 and 2006, because a number of the more senior Asian diplomats were always inviting us around for what were rather tedious diplomatic dinner parties where they would put me on the spot and say: Vicky, why does the West do sanctions? And at sometimes, I even used to arrange for friends to call me so I could leave home – leave the dinner party – because of an urgent call because it got rather boring. To be honest, I see sanctions as a little bit of a sideshow for the West's efforts. Important, definitely headline-grabbing. To some extent, they have some impact. In a way, their deterrent impact, I think, is perhaps more important from the perspective of the private sector.

I note that at least certain Myanmar businesses who were on sanctions lists previously are very keen to effectively behave in order to avoid that in the future. But I don't see them as being the thing which is going to lead to change in Myanmar. And what we're really seeing at the moment is a sort of gradual ticking off of various military-linked companies, one that you mentioned, Mytel, being a joint venture with the Vietnamese telecoms company in which the Myanmar side has a significant shareholding by one of the military-owned companies. So when I saw that coming on, I was quite surprised they weren't already on the list. But I think what's more important to remember rather than focusing on this differentiator between Asian governments and Western governments being sanctions, it's actually the effort of the West on humanitarian assistance which is most important. And I think this is often forgotten.

“I think what's more important to remember rather than focusing on this differentiator between Asian governments and Western governments being sanctions, it's actually the effort of the West on humanitarian assistance which is most important. And I think this is often forgotten.”

And I was just digging out some figures on this. So the UN Office for the Coordination of Humanitarian Affairs assessment of what's needed and I think what's needed and could be delivered if the money was there is currently only just over a third funded. So of that funding, that third, $409 million last year, a third of that came from the US government. And then beyond that, you had 13 percent coming from Australia. You had 9 percent European Commission, 7 percent Japan, 5 percent each Sweden and UK. At the bottom, you've got ASEAN with $760,000, which is really, you know, a very significant differential. And I think sometimes it's important for Asian countries, rather than criticizing the West on sanctions, to understand how much contribution is coming in and humanitarian. And then for us all to be somewhat concerned that with the recent U.S. election and sort of reviews to USAID, what is that going to mean in the future? [Note: Ambassador Vicky Bowman wanted us to note in the transcript that this discussion of assistance volume is occurring amid uncertainty in the United States in a new administration over what Washington’s future role will be both in general and with respect to Myanmar more specifically].

Even I hadn't been aware of quite how significant the US was in this area. But if I look at all the other donors as well, all of them are facing budget constraints. All of them are facing other priorities. You know, Gaza, Syria, Ukraine, Sudan should be much higher up people's lists. So I fear that those numbers are going to go down. And the victims of that change are going to be people, particularly in rural areas. And that somewhat is the reason why the work I've been doing and continue to do, although on a much sort of less full-time basis now, is all around trying to keep the formal economy going and maintaining jobs. Because if you lose that, then how are people going to eat? And we see them obviously leaving the country to the extent they can. But jobs in the country are often funding three or four people in a family. We see that even in really poorly paid jobs in the government sector. So it's really important to keep those in.

And what I'm pleased to see is that compared to those debates we were having 20 years ago, there are certainly very few governments – no governments, really – but also very few Myanmar stakeholders who are arguing for everyone to leave. It's very much a minority position. But there are a few who seem to think of a sort of scorched earth [scenario] for the economy – I mean, one of them the other day said we need to completely reset the Myanmar economy. Well, for me, resetting it means just basically leaving a blank slate where there will only be organized crime left there. And we're already seeing too much of that: the organized crime, the scam centers, the drugs. So trying to help companies to stay there and continue to function and to function responsibly, I think, is still a really important priority for the West as well as for ASEAN: in some cases, more for the West than for ASEAN.

STANDARDS CALIBRATION IN GEOECONOMICS

ASEAN Wonk: So Vicky, just to build on the point that you were mentioning earlier on sanctions being a sideshow relative to some of the huge humanitarian needs that are required in the country. How do we balance the considerations with respect to making sure that the trajectory of the country is diversified – so not focused on a more isolated landscape with respect to China, Russia – and making sure that the regime actually has the sort of the incentives to make sure that it's leaning in the right direction? Because what we're seeing now is a trajectory where there are some businesses that are in the country but some of them – including major businesses – have actually left the country. And there is this dynamic, which is not unique to Myanmar, where obviously businesses are going to follow profit – there's business considerations that are there – but there are also really geopolitical and geoeconomic considerations, which is the more businesses leave, Western businesses in particular, for all of their flaws and issues, they tend to help lift the overall standards in the in the country relative to, say, businesses from China and Russia. So them leaving the country actually creates this broader issue or challenge where the overall standards in the country might actually be depressed relative to where we are now. So as somebody who has seen this country Myanmar through various cycles – not just the recent cycle of the post-coup landscape – how do we think about this question of how do we balance those considerations?

Ambassador Vicky Bowman: Well I think that certainly Western governments are very conscious of it, and they're conscious of it for exactly the reasons you say. If you leave a vacuum, generally, the quality of what goes on there in terms of rule of law, of good governance will slip, environmental sustainability, and so on. And that that will be bad not just for today, but for any future economic transition. I mean, if we ever get to the point where we have a democratically elected government, they do not want to inherit a wasteland in terms of the economy. Not least because when you see these sort of signal companies like Coca-Cola leaving, other companies look at that. Maersk is another one. The Danish shipping company is a really core company to maintain in the country. Because if Maersk goes, a lot of others who depend on them for shipping goods, particularly in the garment sector, will go too. And often when companies leave, their boards say to them: you know, okay. We learned our lesson. Let's now just back off and see how things go. So they don't turn around on a sixpence or a dime and say: Okay, let's go back in now, they've just had an election or they've just had a change of government.

So, yeah, embassies are very conscious of that. You see them supporting certain initiatives. My own, obviously, was a part of that. But also within the garment sector, the EU is a major player with its funding of the Made in Myanmar program, which brings together the brands from Europe who are continuing to source. It's mainly Europe. It's mainly Japan. There are a few US companies as well. I was talking to some in the baseball cap sector the other day who I think see a post-election growth perhaps. But, you know, it's really important that those companies do stay and source, but source responsibly. And that takes good policy from the military. And that's where governments, and for that matter, the businesses themselves, have a problem in that they are not engaging with the military regime.

So, therefore, they need to find vectors through which to pass messages about how certain policies – for example, on exchange rates or on the lack of increase in the minimum wage – are making it harder for them to stay. This is, for example, a particular concern of mine right now that wages are so low that nobody in the garment sector can survive without a huge amount of overtime. And the reason wages are so low is because in that sector, they tend to cling to the bottom of the official minimum wage. They don't go up in response to a natural market pressure. So we're seeing a sort of increase of what can be considered forced labor in that sector – not of people chained to their desks, but simply through economic reasons working way, way too long hours, and not able to take the leave that they're entitled to. And this is something where both the companies themselves should work with their supply chain, but also embassies should be alerting those companies to the risk that they need to fix this problem because, otherwise, there's a risk that some of these exports from Myanmar could fall into the forced labor category.

PULLING ON THE RIGHT POLICY LEVERS

ASEAN Wonk: That a really interesting point that you made. And I think it also relates to the general consensus on sanctions and their effectiveness: that absent the fact that you have coordination of sanctions with an overall series of policy objectives and that they're part of a comprehensive approach, they usually are not very effective. So their effectiveness is enhanced if you have a series of policy levers, you have a comprehensive approach, and you're also thinking about how targeted your sanctions are, which is a debatable question, right?

Ambassador Vicky Bowman: I think it's a debatable question. But it's one where we're seeing a movement within the European market away, I think, from the days in which entire countries were cut off from, for example, the Everything But Arms preferences as we saw in Cambodia to a much more targeted approach through things like the forced labor regulation, the deforestation regulation. Although it's certainly got its critics, at least is meant to be focused on specific products coming from a specific place rather than just saying everything that's coming out of that country is bad and should not be allowed on our market, which was the approach that the US took back in in 2003 when I was there in in Myanmar. So, basically, I'm sitting at a table, ironically, here in my conservatory, which was a beneficiary for me of sanctions because it couldn't be exported to Pennsylvania because of that ban. So the factory that had made it in Western Yangon had to sell it to me at a cheaper price to raise some cash. But that, to me, is not a sensible approach because it punishes everybody with the same brush, and we need to recognize as a spectrum from very good practice to very bad practice. And the aim should be to get the worst practice improved or to sanction that if there's nothing else that can be done.

INTRAREGIONAL CONNECTION SHIFTS

ASEAN Wonk: Related to that, we’ve seen some shifts in that regard in Myanmar in terms of the situation in the country and its relation to what you referenced earlier regional links. The official estimates are really hard to quantify, but the United Nations, in its assessment a few months ago noted that, for example, Thailand had replaced Singapore in terms of the leading source of military supplies via the banking system, even though there was a reduction in procurement figures. In Myanmar you've seen these links ebb and flow over the decades. It tends to be that when you have a military regime in power, those links concentrate a little bit more; they're a little bit more diverse when you have a period of kind of reform and opening, relatively speaking. But what are the general contours of how this configuration of countries is changing geoeconomically for Myanmar as a country that you've seen?

Ambassador Vicky Bowman: So the report that you're describing was by the UN special rapporteur which showed the shift – which was really for me, it wasn't a geopolitical shift around arms sales. It was around banking due diligence. And it was a reflection of the fact that there'd been quite sustained pressure on Singapore, particularly from the US government, but also domestic pressure on their part to clean up their act around money laundering. And there was this very famous case in Singapore of a number of Chinese businesses – you know, billions of dollars involved in money laundering – which was investigated by the Singaporeans in 2023. Nothing to do with Myanmar. But so the Singaporean banking sector, I think, has become much more rigorous about its due diligence. And the days from twenty years ago when the military had its spare bank accounts there and carry it across suitcases of cash, that's not happening anymore. But that banking services then went and found a nearby opportunity in Thailand. Sorry. When I said banking services, rather, the companies who were acting as brokers in this went to use accounts in Thailand, which they felt were going to come under less scrutiny.

So then with Tom Andrews' report, that was picked up by the Bank of Thailand and the Thai Anti Money Laundering Office who launched an investigation, called in the banks, discussed with them the findings. I have to say the findings were not totally clear. I've read that report over and over again. Can't quite work out what transactions we're talking about. And when you talk to the authors and so on, they say, well, we're protecting our sources. So it was challenging. And I think the Bank of Thailand had the same problem as did the banks who were being highlighted. With the conclusion that the Bank of Thailand drew that although there was nothing in their investigations to suggest that there were transactions linked to arms procurement, it was certainly true that banks were conducting transactions with some of the entities named in the report.

And the bank made a very important recommendation or finding that Thai financial institutions need to better manage the risks of being used as channels for funding illegal activities and human rights violations, which may manifest in new forms. And the reason I'm highlighting that is because it's the first time I've seen any Asian bank – or rather any Asian banking supervisory authority – make a connection between banking and complicity and human rights violations. The Singaporeans didn't do that. They were very focused on counterterrorism financing, anti-money laundering. But the Thai bank has taken policy a bit further forward by recognizing that there is a potential complicity risk for banks, and therefore, that's something that they should cover in their their due diligence. So it's put Thai banks on notice around this. Which is obviously generally a good thing, but it could have the impact of making it even more difficult for legitimate businesses to get banking services.

So to come back to your question about how the world is shifting, I think we're seeing a very active attempt both by the Myanmar government, but also by the Russians and the Chinese, and more broadly, to de-dollarize in banking transactions. And so Myanmar is just a microcosm of that, and you're seeing direct Indian Myanmar rupee transaction systems, again, also with the Russians, and increased use potentially of cryptocurrency – which, although the Myanmar government still has as illegal, I suspect may be being used for some purchases in some way. And then there's always going to be the traditional way of financing purchases and transactions, which is direct swaps. And we saw that from twenty years ago.

“[I] think we're seeing a very active attempt both by the Myanmar government – but also by the Russians and the Chinese, and more broadly – to de-dollarize in banking transactions.”

There was this rather marvelous interview with Tay Za, who really was and perhaps still is one of the most significant cronies, where he was asked: why did you buy North Korean equipment for the military government? He said, well, I have to do everything they tell me to. And that's in Forbes magazine from about fifteen years ago. But it's a reflection of the fact that certainly in those days, perhaps to a lesser extent now, there were many valuable assets that the military regime was able to monetize effectively by saying: do you want to have this land? Do you want to have this beach? Do you want to have this stand of teak forest? And could you please pay our bills overseas? So I think that stuff is still going to be going on, but I think it's going to be less and less the case simply because there is that much less for the military regime actually to offer, not least because of the shrinking control that they have over the territory and the fact that Myanmar is not seen by most businesspeople as being a particularly bankable or a particularly investable destination at the moment even for things like real estate.

GEOPOLITICAL AND GEOECONOMIC SCENARIOS IN 2025 AND BEYOND

ASEAN Wonk: That's an important point that you make there about how transactions are actually done, what formal or informal channels that you're using and what challenges those entail. And the other point you made about the fact that we're dealing with a regime that by one estimate has less than half of the country under its control. So we also have to think about what those implications are in that regard. Looking ahead, we've seen some suggestions from the military junta of trying to move towards potential elections this year, following a census that was conducted. Setting aside the many, many complications therein, even assuming that this eventually plays out, it does seem difficult to see at this point that we are sort of resetting back to where we were in the 2010s, where there was a lot of hope about initial reform and opening period, As you flagged earlier in some of your responses, we are dealing with a world in which it's there are a lot of challenges – there's the Ukraine issue; we've got issues in the Middle East; we've got intensifying major power competition that wasn't as much the case fifteen, twenty years ago. So how do you see that sort of configuration of major powers and their involvement in Myanmar changing in the coming years under the scenario? And feel free to disagree. I do think that the landscape that we're in right now is very different from we where we were in twenty years ago. So it's tough to sort of see this as kind of a reset back to the 2010s, no matter how people might seem to sort of be enthusiastic about how we could return back to the past.

Ambassador Vicky Bowman: Yeah, I totally…

[Note: This is the end of a free preview podcast, with the full version in an earlier post published on February 27, 2025 available to our paying subscribers. This is not meant to serve as new content and is part of our free preview content within the dedicated website podcast section].

INTRODUCTION

[Note to the ASEAN Wonk Community: The ASEAN Wonk Team conducted an exclusive interview on February 11 with the president of The Diplomatic Academy of Vietnam previewing its hosting of the upcoming ASEAN Future Forum scheduled for February 25-26. We are running this as a special episode of our ASEAN Wonk Podcast. The wide-ranging discussion covers minilaterals in the shifting regional institutional landscape; middle power diplomacy; Vietnam’s foreign policy prospects in a “new era” as it prepares for its next party congress in 2026; and much more].

Our guest today is Dr. Nguyen Hung Son, who is the acting president of the Diplomatic Academy of Vietnam and served over two decades in Vietnam's foreign ministry in various roles, including at the ASEAN department. We start the conversation talking about Vietnam’s current foreign policy posture and previewing its upcoming hosting of the ASEAN Future Forum later this month, a new forum within the regional landscape. Make sure you tune into the full episode as we go through other subjects, including the regional tech race, middle power diplomacy, minilateralism and where Vietnam’s bamboo diplomacy is headed with its upcoming party congress in 2026.

To receive full ASEAN Wonk posts and support our work, consider a paid subscription for $5 a month/$50 a year through the button below. For more on pricing for institutions, groups and discounted categories, visit this page.

Note: The transcript that follows the above free clip preview has been lightly edited for clarity and organized into sections for ease of quick browsing. For all ASEAN Wonk Podcast episodes, full video and audio podcasts, along with edited and sectioned transcripts as well as block quotes, will be a premium product for our paying subscribers, but we will include a short free transcript preview and a clip for all readers to maintain accessibility. Paying subscribers can find the rest of the full transcript and the full video podcast right below the paywall. If you have not already, do consider subscribing, and, if you have already done so and like what you see and hear, do consider forwarding this to others as well who may be interested. Thank you for your support as always!

VIETNAM FOREIGN POLICY EVOLUTION AND THE ROLE OF MULTILATERALISM AND ASEAN

ASEAN Wonk: So welcome to the podcast Hung Son and let's get started. I'm wondering if you could help contextualize Vietnam’s ties with ASEAN within its wider foreign policy approach, which is centered around various components including multidirectionality. Vietnam joining ASEAN in 1995 was arguably one of the major post-Cold War shifts in the region, given some of the regional tensions that existed previously. We're now at 30 years since Vietnam joined ASEAN, and Vietnam has made several contributions along the way. You've worked as a diplomat in various roles, including on ASEAN affairs. How have you seen Vietnam's perceptions of ASEAN evolve over time during this period within its foreign policy?

Dr. Nguyen Hung Son: Well, first of all, thank you for including me in this very interesting podcast. Well, it's a very good question. We’re marking the thirtieth anniversary of Vietnam entering into ASEAN and becoming a formal ASEAN member. And I would say that becoming an ASEAN member is one of the most successful Vietnam's foreign policies. Why so? Because right after the Cold War, we were a member of the Eastern Bloc, the Soviet Bloc members, and we were more confrontational to ASEAN. But after the Cold War ended, we sought to become a member of ASEAN, and that has opened up the new whole world for Vietnam. And that was the beginning of Vietnam entering into regional integration, international integration, and that was the foundation of the success that we've enjoyed over the past nearly four decades. So arguably, ASEAN membership provided us a lot. And ASEAN today is one of the most important pillars of Vietnam foreign policy. And Vietnam is seeking to or is trying to become an even more active member of the regional and international community. And ASEAN is absolutely indispensable for that journey of Vietnam, in its international integration.

So that's the importance of ASEAN to Vietnam. And as a diplomat, I started out as an expert in the ASEAN department of the ministry. I observed that journey, and I've seen how more active Vietnam has become in ASEAN business within the region. And today, we have this ASEAN Future Forum, which is a Vietnam's initiative, which represents the contribution that Vietnam is trying to make to ASEAN at a very critical juncture of the organization development. So that's the context of the ASEAN Future Forum that we are going to have in two weeks' time.

BAMBOO DIPLOMACY IN VIETNAM’S FOREIGN POLICY APPROACH

ASEAN Wonk: And can I ask you: one of the labels that we've heard about on Vietnam's foreign policy approach in recent years has been this idea of “bamboo diplomacy” right? Bending, not breaking. The idea of principles symbolized by a sturdy trunk and firm roots, but also flexible adjustments in terms of the branches. How does ASEAN fit in within that perspective of bamboo diplomacy? Because obviously, it's a very stormy geopolitical environment for Vietnam to navigate.

Dr. Nguyen Hung Son: Okay. That's another very good question. Bamboo diplomacy, it's a great metaphor that depicts Vietnam's foreign policy qualities. And one of those qualities is to stick together with allies and friends in order to be strong, in order to be resilient.

“Bamboo diplomacy, it's a great metaphor that depicts Vietnam's foreign policy qualities. And one of those qualities is to stick together with allies and friends in order to be strong, in order to be resilient.”

And that's precisely what ASEAN is for Vietnam. It provides the solidarity. It provides the added strength that a country alone would not have. And that's critically important at this time, as you said, a very stormy weather, where more countries are pushed and pulled by the forces of great power competition. You need friends. You need allies. And ASEAN is Vietnam’s home. ASEAN is Vietnam ally in order to stay strong in such a geopolitical weather that Vietnam is experiencing. So if you want to use the metaphor of the bamboo, then the bamboo banded together through ASEAN is what Vietnam is looking for.

SOUTHEAST ASIA’S INSTITUTIONAL LANDSCAPE AND THE ASEAN FUTURE FORUM IN PERSPECTIVE

ASEAN Wonk: Great. I wanted to transition to talk about the ASEAN Future Forum. And the Diplomatic Academy of Vietnam, which you're the acting president of, is very well known for convening a lot of these dialogues. I had the benefit of participating in one of those dialogues in September last year. The ASEAN Future Forum, as you mentioned earlier, is quite a significant development. A lot of the dialogues regionally in Southeast Asia tend to be concentrated primarily in maritime Southeast Asia. So if you look at the broader Indo-Pacific or global interactions like the Shangri-La Dialogue in Singapore, or if you look at the Asia-Pacific Roundtable in Malaysia, this is really a big initiative by Vietnam that helps also distribute the sort of convening role more within Southeast Asia as well. So it's quite a significant development.

Alongside that, we have seen Vietnam also take other convening initiatives. We saw the defense exhibition that just occurred in Vietnam a few months ago. Vietnam has worked with the World Economic Forum on a number of events prior to this. Can you help us conceptualize what was the origin process of the ASEAN Future Forum and how it was socialized and came to be? Because these are not very easy undertakings for any country. And you having been part of this initiative at the Diplomatic Academy of Vietnam, with Vietnam and the government, how do you see that process of the origin and the socialization?

Dr. Nguyen Hung Son: Well yes. You're right. There are a lot of activities within ASEAN already. ASEAN is known to be an organization with a lot of meetings, and many of the initiatives are taken by the so-called maritime ASEAN members. We have the Shangri-La Dialogue. We have the Asia-Pacific Roundtable by Malaysia and so on. And so we thought, well, many people thought that adding more meetings into the ASEAN business is very tough.

But nevertheless, Vietnam thought that, well, no matter how many or how much discussion there are on ASEAN, it’s not enough. Especially at this critical juncture, you need more talk, and talk is what is lacking in the international community at the moment. People needed to have more talks. And especially in this region, we needed more strategic talks. We needed to think out of the box. We needed to be more innovative, be more creative, to look back, reflect on ASEAN, and see squarely what challenges ASEAN faces and to provide out of the box solutions or recommendations to the organizations. Hence, we proposed the idea of a Track 1.5 dialogue that is dedicated to ASEAN. That is what is lacking in this region. We have several similar Track 1.5 undertakings – the Shangri-La Dialogue, the Asia-Pacific Roundtable, the defense dialogue by Indonesia, the Jeju Forum, and so on. But none of them is dedicated to ASEAN and its relationship with its partners. So we decided to fill the gap by proposing the idea, and, fortunately, in its first and second iteration, which we are holding this year, we've received some good feedback. We've received some support in the region. It's too early to say if this initiative is going to be long-lived, but I believe that there is a gap there that we are trying to fill, and we are doing a good service to ASEAN and to the region by providing this. And so that's the origin of it.

ASEAN Wonk: Great. And I’m wondering if you could say a little bit about that process that you mentioned. Obviously with any initiative within ASEAN, you do need to get support of other countries as well. Vietnam hosted the first iteration of the ASEAN Future Forum last year. And then subsequently, we saw the Forum mentioned in an ASEAN joint statement last year in Vientiane, alongside other priorities about community-building. This is a pretty big year for ASEAN in terms of the issuance of the Vision 2045, a twenty-year vision for the bloc. So, this matters from the regional community-building perspective as well. But I'm wondering if you could help elaborate on that point as to where it stands in terms of socialization and the support among the other member states?

Dr. Nguyen Hung Son: Yeah. So when Vietnam came up with the initiative, we certainly went around and told our friends about our ideas. And we raised it to the foreign ministers and the leaders to explain to them what this is for. And last year, Laos was the chairman of ASEAN. Certainly, Laos wanted a lot of support in terms of promoting ASEAN, promoting discussions within ASEAN. And we very clearly told our friends in Laos that this is precisely what we are trying to do in order to support Laos’ chairmanship of ASEAN, engage ASEAN into more discussions with our friends around the world, trying to fill in the gaps of where Laos feels that they have not been capable of creating more discussions within ASEAN. And so they supported the idea. They participated. Lao prime minister came and opened the forum last year together with Vietnam's prime minister. And fortunately, the idea also was welcomed, maybe because of the merits of the idea itself, but maybe also because a little bit about they knew what the DAV was doing. And so they trusted the Diplomatic Academy of Vietnam on this kind of business. And so many of our friends, ASEAN dialogue partners, supported the idea, and they came in person, and they also came sending video messages in order to support the initiative. And that's how the idea came about and got started. It got reflected, in the, as you said, joint communique of the ASEAN foreign ministers after the forum took place. And so that was a recognition by ASEAN that there was something valuable that they saw in this process. And they decided that they were going to support it if Vietnam were to do it again. And so here we are doing it for the second time.

And this time around, fortunately, we managed to convince Malaysia that this is also supportive of their ASEAN championship. And the prime minister of Malaysia is also coming in person in order to open the forum together with our prime minister again. And, this year, I'm happy to say that we received even more support from ASEAN and from the partners of ASEAN. More people, more leaders are coming in person. More ministers are coming in person. And we have a lot more sign ups for participation this year. So it shows that they do recognize that this kind of forum is the kind of thing that they enjoy at least participating – don't mind wasting their time and money to come and participate. And so they also find that they can take away a bit of valuable stuff participating in this kind of forum.

VALUE ADD, ASEAN FUTURE FORUM 2025 AND LONGER-TERM PROSPECTS

ASEAN Wonk: You're right to mention support and how valuable that is, given everyone's constraints on time and resources as well as the really contested nature of the geopolitical environment that we're in, which, as you noted, does elicit the need for more dialogue, not less. I wanted to ask a little bit about the content and the agenda. You hinted at it there about what is the value add of the ASEAN Future Forum. The agenda last year was wide-ranging, but there was a bit of a focus on some themes such as sustainability. And a lot of the dialogues, as you say, in the region – they've adjusted over time – there tends to have been a very strong security or defense focus, and, over time, the notion of security has evolved and expanded in the region such that virtually all Southeast Asian countries are trying to think about a more comprehensive notion of security. And so it seems like the ASEAN Future Forum is trying to take on some of these big picture issues and a more multi-dimensional approach to security that looks at not just the economy, but also the environment, climate issues, and some of these big picture geoeconomic developments as well. I wonder how you think about that in terms of content and value add that the ASEAN Future Forum is providing, and how you are thinking about the agenda moving forward?

Dr. Nguyen Hung Son: Okay. Now because it's the ASEAN Future Forum, therefore, it's very ASEAN-centric. We've designed the program so that ASEAN is the subject of discussion. ASEAN leads the discussion. ASEAN shows intellectual leadership in all of the sessions that we design. So in every session that we design, we always try to invite either a key ASEAN leader or key ASEAN scholar to take the lead in the discussion. We are also futuristic in designing the session. So we are looking at issues, emerging issues that are going to affect ASEAN's future or is going to affect ASEAN's business in the years to come.

We are also trying to be balanced, so we are not just security focused. We understand that ASEAN has very broad interests and not just security. And therefore, we try to tackle security, geopolitics, but also developmental issues. For example, this year, we do a lot of stuff on tech. We have two sessions dedicated to technologies and the future of technologies and how ASEAN can become tech resilient and how can ASEAN capture the opportunities that the tech revolution is bringing to the international community and especially to the region. So we try to be comprehensive. We're trying to be ASEAN centric. We're trying to be future proof, futuristic, and that's how we design the program. But we do not have a very fixed or very rigid agenda. The whole idea is to be flexible, to tackle the needs, to be supportive of the ASEAN chair. So we do observe what the ASEAN chair is trying to be supportive of and to complement the chair agenda. So the forum can be seen as an integral part of the ASEAN overall effort to drive the agenda of the region.

ASEAN Wonk: That sounds like a good balance there between the agenda in general and being flexible to the changing circumstances each year –the rotating chairmanships and also the changing circumstances in a very fast-moving world and region as well. I'm wondering if you could preview what we might expect in terms of the theme of this year's ASEAN Future Forum. What are some of the major topics and outcomes that you're looking for, and then also the expectations more generally for where this is headed in its second year?

Dr. Nguyen Hung Son: Okay. So this year, we've chosen the theme of building a united, inclusive, and resilient ASEAN amid a transforming world. So the context is a world that is changing very fast. And the question we're asking ourselves is how to build a strong, resilient ASEAN that is based on its unity and inclusivity. So that's the whole idea. We thought that that theme complements well Malaysia's chairmanship of ASEAN, which focuses on inclusivity and sustainability. So that obviously is supportive of the ASEAN chair.

We are going to discuss megatrends that are going to affect this region. We are going to leave it for the scholars and the keynote speakers to elaborate on what their thoughts are on the megatrends that we need to observe and what are those that are going to bring opportunities and challenges to ASEAN. We are going to ask everyone to revisit ASEAN's mechanics, ASEAN basic principles or fundamental principles, and see how ASEAN can become more agile and more adaptive to the current world. We are going to also look at subregional cooperation or essentially minilateralism and see how these synergies, these different mechanisms, can complement one another and support ASEAN multilateralism as a whole. We're going to look a lot at tech and how ASEAN can balance between being flexible and being innovative while having proper governance, proper regulations to govern the tech revolution. And we're also going to discuss geopolitics. We are going to discuss how ASEAN can bridge the divides given the world is becoming more fragmented – given the region or the Indo-Pacific is becoming more divided, more fragmented – and we'll see the relevance of ASEAN and how ASEAN can serve as a connector, honest broker that ASEAN has always tried to be. So essentially those are the main themes, main topics that we are going to discuss. And we are going have a lot of side events as well that tackle other topics such as women empowerment and so on and so forth. So we'll try to make it a rich and fruitful discussion, and everyone should find something of their interest participating in the forum.

VIETNAM NEW ERA OF NATIONAL RISE AND FUTURE FOREIGN POLICY OUTLOOK

ASEAN Wonk: I’m wondering if I could ask about the broader context in Vietnam. Vietnam is headed into its next party congress early next year. General Secretary To Lam has also been talking about – depending on which formulation you’re using – Vietnam entering a new era of national rise. And the major power environment as we’ve talked about is also shifting. We’ve got a new administration in in the United States, but also more broadly, shifting changes and conflicts in Europe and in the Middle East as well. Where do you see some of the changes amid the continuity in Vietnam's foreign policy headed in the coming year?

Dr. Nguyen Hung Son: Well the statement by General Secretary To Lam that the country is entering a new era marks the recognition of what everyone else in the world has been saying: that the world is at an inflection point. The world is transitioning to multipolarity. The world is changing and is not going back to what it was and so on and so forth. So everybody is saying that the world is different now. And so this is a recognition of the state of the world that is fast changing and is fast transforming into something that is not yet fully known.

“Well the statement by General Secretary To Lam that the country is entering a new era marks the recognition of what everyone else in the world has been saying: that the world is at an inflection point. The world is transitioning to multipolarity. The world is changing and is not going back to what it was…”

Secondly, it's also an indication that the country is also transitioning to a different period. After four decades of what we call doi moi or renovation, the country has gained quite a bit and it is now ready to move on to a different stage of development, trying to shoot up the pace of development, trying to overcome the middle-income trap, trying to gear up to the upper layer of the supply chain. So the country is aiming higher after four decades of accumulation of relative economic foundation. He's aspiring the country to be more ambitious, to aim higher and to enter into a period of economic developments where you have to think differently and you also have to do things differently.

So the major change is mostly going to be in the way the country governs itself, in the way that the country relates to the environment that is changing outside, and the way in which the country is going to tap into the opportunities and tackle challenges outside. For example, on technology, and General Secretary To Lam is very keen on aspiring the country to take up the tech revolution that is happening in the world. He says that if we are not going to be able to tap into that revolution, we are going to forever be left behind, and you're never going to meet your target of becoming a higher upper income level or developed country by 2045. So you have to do things differently in order to tap into that. And the ASEAN Future Forum that we are doing is one of those exercises that we are trying to contribute into getting the country up on its feet in order to be able to take up or to join the tech race, if you might call it. And that's how he's trying to ask the country and its people to be different in the new era.

VIETNAM, MIDDLE POWER DIPLOMACY AND MIDDLEPOWERMANSHIP

ASEAN Wonk: And in that context, I'm wondering how we view Vietnam's convening of forums within this broader notion in Southeast Asia where countries are navigating this very contested geopolitical environment. Different countries have different names for it, but the essence is middlepowermanship or the idea of using agency to come up with new ideas and initiatives to be proactive in terms of how you're engaging. How do you see this as being part of Vietnam's own way of engaging actively in this foreign policy landscape and exerting its own entrepreneurship, if you will, as a power in its own right within Southeast Asia?

Dr. Nguyen Hung Son: Yeah, you may say it's an aspiration to act like a middle power…

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INTRODUCTION

Our guest today is Fidelis Magalhaes, who is a former minister of the presidency of the Council of Ministers in East Timor, and he has nearly two decades of policy and government experience. We start our conversation talking about the country's pursuit of full ASEAN membership and its development trajectory. Make sure you tune into the full episode as we go through a range of other subjects, including major power involvement and future geopolitical and geoeconomic prospects.

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Note: The transcript that follows the above free clip preview has been lightly edited for clarity and organized into sections for ease of quick browsing. For all ASEAN Wonk Podcast episodes, full video and audio podcasts, along with edited and sectioned transcripts as well as block quotes, will be a premium product for our paying subscribers, but we will include a short free transcript preview and a clip for all readers to maintain accessibility. Paying subscribers can find the rest of the full transcript and the full video podcast right below the paywall. If you have not already, do consider subscribing, and, if you have already done so and like what you see and hear, do consider forwarding this to others as well who may be interested. Thank you for your support as always!

FULL ASEAN MEMBERSHIP PURSUIT

ASEAN Wonk: So welcome to the ASEAN Wonk Podcast Fidelis: thank you for joining us and let's get started. I wanted to talk more specifically about Timor as a country because as we were talking just before we came on live, it is a country that often doesn't get the attention that it deserves within Southeast Asia. I did want to start with Timor's pursuit of full ASEAN membership. It is the country that is in Southeast Asia but remains out of ASEAN in terms of full ASEAN membership as of now. But that's changing with ASEAN already agreeing to Timor joining the institution as a full member. That's still in a process of being underway. I recall President Jose Ramos-Horta once referring to ASEAN as being more difficult to get into than heaven. But that being said, Timor has undergone a lot of steps that are necessary for full ASEAN membership and this is a very complex process. The steps are not just taken by Dili itself, but also other ASEAN countries in terms of areas like diplomatic infrastructure – those aspects are still being worked out and progressing. There are a lot of headlines periodically that focus on ASEAN membership about it as an institution, but you as a former policymaker have a sense of the significance of what this means for actual policy and for Timor's foreign policy and geopolitical and geoeconomic landscape. Could you help explain the policy significance of Timor's admission to ASEAN and why does it matter from a historical and contemporary perspective?

Minister Fidelis Magalhaes: Well, thank you very much, Prashanth, for the opportunity. So let's start with ASEAN membership, or at least with the most recent development. I think, as you rightly pointed out, President Ramos-Horta once said that it was more difficult to get into heaven rather than joining ASEAN. I think at this stage, the signals that we've been receiving from Malaysia, who is now the chair, and from other members, we have been receiving quite a significant and more promising signal. So in a sense, I think the expectation is already Timor-Leste is somehow around the corner from heaven, but maybe not entirely inside. So the expectation or the signals that we've been receiving here from Timor-Leste, or at least the sense, is that maybe still this year Timor could join. And at least from the policymakers or from present government's viewpoints or statements is that it is realistic to expect Timor-Leste becoming a full member or acquiring full membership. But again, there are still things to be done policy-wise and streamlining policies to adapt to the ASEAN standards. So it all remains to be seen. But I think from Dili's viewpoint, I think there is a new sense of optimism.

REGIONAL CONNECTIVITY

ASEAN Wonk: Great thanks for that. You mentioned Malaysia and its ASEAN chairmanship. Given the twin pillars are inclusivity and sustainability, Timor’s inclusion would presumably be part of that story and would make sense from a narrative perspective as well. I’m wondering if you could say a little bit as well about something we were talking about offline earlier. Often there’s a bit of misunderstanding or lack of understanding about some of the very basic mechanisms within Timor and how it operates. It is a country that on most indices is among the most – and sometimes the most – democratic country in Southeast Asia. But I know President Ramos-Horta and other officials have said, in spite of the fact that Timor registers quite well on these metrics, they also hope that Timor can improve on the economic metrics as well, because it remains one of the lesser developed countries in Asia, and also one of the lesser connected countries within Southeast Asia. For people who have gone to Timor, they recognize there's only a few places that you can get flights actually registered, and hopefully this changes over time. Can you provide us with a sense of that regional connectivity? Because for the country, there’s links to Indonesia and relationships with countries that are important and evolving such as with Singapore, for example. How do you assess not just the issue of ASEAN membership, but connectivity of Timor as a member of the Southeast Asian neighborhood and community?

Minister Fidelis Magalhaes: Well, let's start with going back in time slightly. So I think the FRETILIN leadership [initially the resistance fighting for Timor’s independence] believed it was important for Timor-Leste to be a member of ASEAN for political reasons. And this continues to be – at least I think – imprinted in political discourses within Timor-Leste. And the thinking remains the same: that it is imperative for Timor-Leste to be a member of ASEAN in order to ensure our long-term security and also in order to gain voice internationally. Because as you know, globally, it is the practice these days for countries to be members of their own immediate neighborhood alliances or groupings. Well, Timor-Leste and probably one or two other countries in the world I think have not done so. So it is, for our viewpoint, it is almost incomplete for ASEAN to exclude Timor-Leste. It is so natural for Timor-Leste to be part of ASEAN. Culturally, economically, Timor-Leste is part of Southeast Asia and ASEAN. It is embedded. It is a natural member of Southeast Asia. And maritime Southeast Asia is obviously quite incomplete without having Timor-Leste as a member.

Now, we understand that there are disagreements. There are concerns. And this is not only something which I think concerns observers or members of ASEAN. Even the Timorese, we are normally very harsh in terms of assessing our own advances or our own progress. We believe that sociopolitically, we have made a lot of advancements, we've achieved quite a lot. But in order for these sociopolitical achievements to be sustainable, you'll need to combine it with socioeconomic or economic development. Now, whereas we are advancing quite fast sociopolitically or institutionally or in terms of state-building, economically we are lagging behind. So for us it is also a matter of state survival or the continuity of the Timorese state or a nationhood as a social political experiment of building a democratic society or a sustainable society.

We really have to, we do not have time to waste. We need to actually push our economic development or we really need to move ahead with economic development. So the hope therefore is that by joining ASEAN we'll be able to adapt our institutions and our regulations with that of ASEAN and that would probably make Timor-Leste conducive for intra-regional trading. That would make Timor-Leste be more adaptable to requirements from ASEAN and also from WTO and more universal or global trading regimes. So that's, I think, the expectation.

Now, what does it mean in practical terms? In practical terms, I think there is a lot of legal reforms that need to be undertaken. There are a lot of institutional reforms that are needed because, as you know, our institutions, despite the progress, their progress so far is normally based on an economy that is based heavily on petroleum, but also it is an inheritance to some degree of a rather centralized UN mechanism. So you actually need to modernize this and you'd have to make sure that it is adaptable to the demands of a more embedded regional economic architecture. So we believe that ASEAN as the future economic powerhouse would be beneficial to Timor-Leste. So us joining ASEAN would in a way allow us or enable us to have a greater, larger market. As you know, being a small country, we do not have the privilege of having an economy of scale. For our own development, we really have to be embedded or be part of a regional economic framework.

But for that, you really need a lot of work. We also have to work with the mindset of the people. So people have to understand the tradeoffs; people have to understand the challenges that may come with the opportunities. So economically speaking, what it really means and the way in which the economy has been set up…you would have to realize that when you are actually exposed or be a player in a larger regional system where there is a demand for fair treatment for all players, then it probably may introduce some hiccups, some changes that may not be well-received at least in the first few years of us becoming a member. So this is I think the work you’d need to do. So probably learning from Singapore – from PM Lee Kuan Yew – where you have a key choice for a rather open, more free market-oriented economy. But whereas in Timor-Leste, I think to start with, the structural economic system was not that open and has been in a way driven by the demands to actually raise or to protect infant industries. But infant, in this sense, I think is understood to be national private sector. So there will be implications.

But anyway, from Timor-Leste’s point of view, that it is very natural that for us to be a member. It is not well understood why we're not a member of ASEAN despite our economic challenges in comparison with Laos, Vietnam, Cambodia joining in the late 1990s. Anyway, we think that we can be a member, but we are also cognizant that the path towards membership would require a lot of work. And our readiness still – to be very frank – we will still need to do a lot of work. But again, it is not fair to expect Timor-Leste to be perfect prior to joining, right? So you can join, you can have doors opened for you, then you upgrade and you upscale your own institutions or your own capability. So i think it is not fair having acknowledged our weaknesses and the challenges for Timor-Leste given the country became independent fairly recently.

MAJOR POWER BALANCE

ASEAN Wonk: I think that's an important point that you make about the standards by which Timor is being judged. You’re right in terms of the fact that during ASEAN's expansion in the 1990s to involve more mainland Southeast Asian countries, these countries were also far from perfect. And in some cases, there are still some challenges with these countries, as we've seen with the situation in Myanmar, for example, that is occurring now.

I'm wondering if we could switch a little bit and talk about foreign policy. I think there is a tendency for some outside observers to view Southeast Asian countries and their relationships and alignments from the prism of the United States and China, given the ongoing geopolitical competition between the two countries. But for Timor, historically it's fair to say I think that in terms of the two most impactful countries in foreign policy, they actually wouldn't be the United States and China; they would actually be Australia and Indonesia. It’s a pretty interesting time for both of those relationships. We have an election that just occurred in Indonesia, and we have President Prabowo now taking over in Indonesia. We've got an election in Australia this year as well. So changes and dynamics and shifts within two critical relationships for Timor. I'm wondering if you could also say a little bit about those two relationships. For Australia in particular, we've seen some focus on recent bumps with the relationship with Timor that's affected some issues like maritime security, for example. We’re also looking at progress on issues like Greater Sunrise, which is important for economic development which you flagged earlier as well. So how would you characterize the status of both of those relationships and what we might expect for the rest of 2025 in that regard?

Minister Fidelis Magalhaes: Before I go into this question, I think there was a part which I actually left off that has to do with connectivity which you raised. Timor-Leste has been investing in building the airport. And our airport is largely unused. So it only operates, I think, about 60% or something because the runway is too small. It does not operate at night. So I think I'm just being lenient, being kind now to say 60%, probably less more than percent. So I think these are critical infrastructures that we need to work on to be able to improve connectivity. But there is a port that we just built quite recently that enables Timor-Leste to be connected to countries in the region through trade and through shipping.

So it may seem that Timor-Leste is somewhat quite isolated, but in reality, Timor-Leste is well-connected. It is connected through trade with Indonesia. It relies heavily on Indonesia, where it also suffers trade deficit. And with Singapore, Singapore is a very important trading partner and Timor-Leste also is suffering from trade deficit because the trade balance is quite imbalanced because Timor-Leste really doesn't sell anything but Timor-Leste imports most things through these countries relying on the petroleum fund. So we just hope that we can make use of this market access to these countries, that we can sell more to these countries. But again, we need to make sure that the airport becomes more operational, airlines can increase in their capacity. And we need to actually fix our capability, our infrastructures for ASEAN-related objectives for meetings, for conventions. And so we can actually combine that with our tourism plan. So you can target, you can tailor to this ASEAN readiness component, using that as a platform to improve your own tourism attractiveness.

So when I was in government, I actually led this MCC project where I was the principal representative of the Timorese state in negotiating with America, where we secure around $484 million to finance projects in water sanitation and education. But more importantly, I think the water sanitation component, because I think you need in order to diversify, you have to make sure that really Timor-Leste has access to clean water, that the groundwater is not polluted, that people will not come to Timor-Leste and suffer from waterborne diseases or bacterial infections. I think these are very important, which will in a way help us to be ready for ASEAN and to be hosting important events in Timor-Leste but also will make us more ready as a tourism destination.

So with that in mind, I think Timor-Leste will be much more connected. So connectivity will then increase because there's also demand. And so trading-wise I think in the long run in the future it is important for Timor-Leste to attract more investments from Southeast Asian member states from Singapore, from Indonesia.

We're working a lot with our friends from Indonesia to be bringing investors to come in and some about two three years ago i wrote about special economic zone with this idea that you know you can actually make use of Timor-Leste as market access, being an LDC, et cetera. When you have this shortage of capital, you can bring in capital when you have an oversupply of labor in Timor-Leste seeking for jobs. So you can really combine this as you have different types of factor endowments. So this was the proposal that we presented. And I just hope that this government can really take advantage of that. Because strategically, I think you will only be sovereign or safe when you have other countries interest deeply implanted on your soil. Because if you are just being, you continue to be a baroque isolated country with very little international financial or business or economic interest then you will be alone because then you will be truly an island.

If you have different interests on your soil, I think there is then a much greater incentive for countries to work, to make sure that you are protected or to come to your aid or to your defense in the long run, should there be problems. So this is, I think, the thinking, in terms of how to survive.

I think it is essentially to be more open, to be more welcoming, to also be encouraging more capital, more economic investments be coming to Timor-Leste. So the government is also cognizant of that. I think of different various governments that have come and gone. I think normally they somehow strive to propose pro-investment, pro-business policies. But I think you really need to have the ability to make that to work to the implementation, where the details are and the devil is in the details right? I think that's where we are. And I think this was just a chance for me to go back to where you touched upon previously.

Now, going back to the second component of your question. So let me just probably divide into different blocks. I think first is America and China. Second, probably at a much more regional and immediate level, Australia and Indonesia.

So let's start with China and the US…..

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INTRODUCTION

Our guest today is Bilahari Kausikan, who served as a Singapore diplomat for over three decades, including as permanent secretary of the foreign ministry, permanent Representative to the United Nations and ambassador to Russia. We start our conversation talking about how Southeast Asian countries are positioning themselves in the current global order. Make sure you watch, listen, or read the full episode as we go through a number of other subjects, including contingencies related to Taiwan, flashpoint management, and Southeast Asia stakes going forward.

To receive full ASEAN Wonk posts and support our work, consider a paid subscription for $5 a month/$50 a year through the button below. For more on pricing for institutions, groups and discounted categories, visit this page.

Note: The transcript that follows the above free clip preview has been lightly edited for clarity and organized into sections for ease of quick browsing. For all ASEAN Wonk Podcast episodes, full video and audio podcasts, along with edited and sectioned transcripts as well as block quotes, will be a premium product for our paying subscribers, but we will include a short free transcript preview and a clip for all readers to maintain accessibility. Paying subscribers can find the rest of the full transcript and the full video podcast right below the paywall. If you have not already, do consider subscribing, and, if you have already done so and like what you see and hear, do consider forwarding this to others as well who may be interested. Thank you for your support as always!

SOUTHEAST ASIA AND THE SHIFTING GLOBAL ORDER

ASEAN Wonk: So welcome to the ASEAN Wonk Podcast Bilahari. Thank you for joining us, and let's get started. Southeast Asia, as you've written, is no stranger to major power competition. There are various ways to characterize US-China competition today and the state of the global order. If you look at the Lowy Institute's Asia Power Index, it's very clear the United States and China are in kind of in a league of their own, but then you have a range of other powers as well that sit below that, which is a very complex sort of regional landscape. You've suggested that the order you see is kind of a version of dynamic multipolarity – there are different versions of that and what that means. But the key is that it's very different from some of the other analogies that have been advanced, including notions of a new Cold War, which was quite different historically, and also not very cold in Southeast Asia in terms of some of the conflicts that occurred there. What is your sense of the global order today moving forward? And what are Southeast Asia's stakes within it?

Ambassador Bilahari Kausikan: Yeah. Let me make one general point first about global order in general. I think it is a fundamental mistake to think about global order as necessarily reflecting our consensus. If you look throughout history, whatever order we had was defined by contest and efforts to create parameters for those contests so they were minimally dangerous, shall we say. Right? And that was certainly the case for the forty odd years of the Cold War between the US and the Soviet Union. I think you know my views on this. I think that to call the US-China competition a new cold war is really intellectually sloppy and lazy. Because there are superficial similarities, of course, but they are superficial. It's fundamentally different.

The Cold War, the US-Soviet Union Cold War, was one between two systems. It was an existential struggle to see which was the better way of organizing modern industrial society. I think that that debate has been settled. Right? And you're not going to revive it by trying to impose this rather artificial framework of democracy versus authoritarianism on US-China relations. Yeah. China is authoritarian, but it's authoritarian in its own way. There are many variants of authoritarianism. Just as there are many variants – in fact more variants – of democracy, right? So I think the US-China competition is a competition not between two systems, but within a single global system. They are both vital parts of this system. I don't think they can bifurcate into two separate systems.

There will be partial bifurcation. It's already happening. And neither the US nor China is particularly comfortable with their interdependency because it exposes their vulnerabilities. They're both trying to mitigate it. And you know how they're trying to do it. US is trying to be less reliant on China and its supply chains, and China is trying to be more self-reliant in certain technologies. And I think both are going to fail, or at least they're not going to succeed to the extent they hope. Right?

“There will be partial bifurcation. It's already happening.”

But I think this is good news for Southeast Asia because competition between systems is binary. Your choice is a or b. And that was much of the case during the Cold War, which as you have pointed out, was really hot in Southeast Asia. So even those of us that pretended to be non-aligned, we knew where our bread was buttered. Competition within the system as it exists between the US and China today is not binary, it's complex. And in complexity, there is at least in principle more opportunity to exercise agency. And, you know, Southeast Asia, as you pointed out, has lived in the midst of major power competition for centuries. And it's nothing new. This is just the latest iteration of what is probably a natural phenomenon for a region that is a strategic crossroads between two major oceans and therefore trade routes, energy routes, supply routes, and so on.

In complexity, there is opportunity to exercise agency. And that's in principle, what all Southeast Asian countries, with one or two exceptions, try to do. Now I don't say we always do it very well. And there have been some disastrous mistakes in recent Southeast Asian history, particularly in the sixties and seventies. But I think we can cope pretty well as long as we each maintain a very clear idea of our national interest and look out for and maintain the agility. The agility to either seize opportunities to advance our national interest or get out of harm's way in good time. And I think by and large, most Southeast Asian countries with a couple of exceptions are doing that with various degrees of success, but generally, successfully.

INTRAREGIONAL BALANCE OF POWER

ASEAN Wonk: Right. And that's an important characterization that you made there in terms of there being opportunities and agency for Southeast Asian states, but a lot of it depends on how these countries actually exercise that. And a lot of that depends on individual governments, leaderships and regimes. I'm wondering if we can talk a little bit about the intra-regional balance of power within Southeast Asia, which you, as a practitioner, also experienced. And sometimes I think this is a little bit taken for granted for those who don't know the region well. So if you look at aggregate indicators, there are always these characterizations like Southeast Asia is the fifth largest economy now collectively; it’s going to be the fourth largest economy – depending on which estimate you look at – by 2040 for example. But I'm also interested in your thoughts about the intra-regional balance of power. Since the end of the Cold War, we've seen really the, for lack of a better term, the two sub-regional giants, right – a democratized Indonesia in maritime Southeast Asia, and then Vietnam in mainland Southeast Asia –get a lot of attention in terms of some of its growth rates relative to where it was in the sort of pre-Cold War sort of days, for example. But there are obviously long standing intra-regional tensions as well, and dynamics that periodically pop up. And you do have other powers as well in those regions like Malaysia, Thailand, so on and so forth. So if you're a policymaker or an expert who's looking at the region sort of from the outside in or trying to understand what the region looks like, how would you characterize the intra-regional balance of power going forward, even as Southeast Asia's sort of collective importance continues to rise in the coming decades?

Ambassador Bilahari Kausikan: Alright. I think that's a very important point you have raised. When outside observers – whether in the United States or China or Japan or Europe – look at Southeast Asia, they look at ASEAN, first of all, because it is the regional organization. But they don't quite understand that the fundamental and enduring purpose of ASEAN is to manage relations between its members.

Management of external relations has always been primarily a national responsibility. And ASEAN is a secondary factor. Sometimes a bit more important, sometimes less important. This is one of those times where it's less important, but it is always a secondary factor. The primary purpose of ASEAN is to manage this intra-regional balance, the intra-regional tensions, some of which have very long historical roots, and some of them start from very primordial things like race, language, religion, and therefore, they are never going to go away.

And I think from that point of view, ASEAN has been terribly successful. You just think about the state of Southeast Asia. I'll just use Singapore as an example. We had independence thrust upon us in 1965. Now what was the state of Southeast Asia in 1965. Think about it. First of all, the cold war was hot, very hot on mainland Southeast Asia. Secondly, Singapore had just been asked to leave Malaysia and the relationship was fraught with racial tension. Indonesia was still fighting an undeclared war against Malaysia and when we were separated from Malaysia, Singapore as well. And there was a very active claim over a very large chunk of Malaysia by Philippines to Sabah. And there were irredentist pressures on the fringes of Malaysia and Thailand, West Malaysia and Thailand, and on the fringes of the eastern parts of Indonesia and the southern parts of the Philippines. If I may summarize, we were a mess. You're probably too young, but I recall when it was very common for analysts to refer to Southeast Asia as the “Balkans of Asia” right?

Now look at the same state today. We still have problems, of course. Right? But it is primarily a growth region and the problems are manageable. And I think a very large part of that is due to ASEAN. Now, many of the intraregional tensions, as I said, they have primordial roots. They're never going to go away, but they can be managed and they are being managed. Now that said, I must also make a qualification to agree with you. Southeast Asia is a growth region. It's a success story. But to be very honest – and since I'm now a pensioner and not working for anybody, any government – the idea of Southeast Asia collectively being the fifth or fourth largest economy in the world is a bit of an artificial construct. It is still ten national economies very largely despite ASEAN's plans for having a common production platform, a customs unit kind of thing. We haven't abandoned those plans, but progress has been extremely slow. And progress has been extremely slow because the domestic politics of key ASEAN members has become extremely complicated. More and more complicated, right? And if you can't get a domestic consensus, you're not going to get a regional consensus, or you're going to get a very soft regional consensus.

But we haven't gone backwards. This is still the plan. And I think ASEAN, like, actually every regional organization, does not progress – has never progressed – in a straight line. It progresses by lurches and meanderings, right? According to responses to specific circumstances, according to developments in the key countries. But I think on the whole, we are doing quite well.

You know, one of the things that actually irritates me a lot about how the West generally looks at Southeast Asia is they look at it as if it's uninhabited region. It looks at it as a blank slate on which it projects its own hopes and fears, right? It's either a contest between the Soviet Union and the United States. It's a arena. It's either a place where democracy advances or retreats. But, you know, there are quite a lot of people living here. And we have our own ideas about what our life should be like, which do not always coincide with the ideas of external powers. And I think that's where most external powers get into trouble when they go in when they try to engage Southeast Asia as a kind of projection of their own concerns rather than trying to use the very strong regional dynamics – intra-regional dynamics – as means to either advance or defend their interests. You can't impose things.

“[Y]ou know, there are quite a lot of people living here. And we have our own ideas about what our life should be like, which do not always coincide with the ideas of external powers. And I think that's where most external powers get into trouble when they go in when they try to engage Southeast Asia as a kind of projection of their own concerns…”

Look, Southeast Asia has never fallen under the sway of any single power, except for a very short period of Japanese occupation during the Second World War. We knew how that ended. You mentioned earlier a lot of focus on Indonesia and Vietnam. Actually, I was just in Washington DC. This cycle happens quite often. I think there's not enough emphasis on Indonesia, right? It's almost that there's a huge blind spot. A blind spot about two hundred and seventy million people strong. But that said, I think you are right. You can't capture Southeast Asia. Nobody can really capture Southeast Asia unless you capture Vietnam and Indonesia. And it's not a coincidence that these are the two countries that have the strongest sense of their own agency, which is another way of saying these are the two most highly nationalistic countries in Southeast Asia. And I think that's a good thing. That's a healthy thing for the region as a whole and actually for the world.

WHICH SOUTHEAST ASIAN STATES ARE BEST NAVIGATING US-CHINA COMPETITION

ASEAN Wonk: So I wanted to follow up a little bit on what you said earlier, which is there is space for agency in terms of the global order and heightened US-China competition. And that agency is not necessarily evenly distributed. It partly depends on how countries use that how governments and regimes use that. There is a natural competition that goes on sometimes among Southeast Asian countries in terms of navigating that global order, whether it's geopolitical influence or geoeconomic opportunities and semiconductors or critical minerals, so on and so forth. Which Southeast Asian states in your view are best managing or navigating this current geopolitical environment that we're in right now?

Ambassador Bilahari Kausikan: Well, I would I think the three that are doing it best, Vietnam, Indonesia, and my own country, Singapore. I fear that Laos is on the crux of making the same mistake in that they made in the 1960s, with, as you know, quite tragic results for the country. What do I mean by that? If you look back to the 1960s and early 1970s, Laos first, and, to some degree, Cambodia – royalist Laos and royalist Cambodia – first adopted a very passive form of neutrality. You know, basically, laying low and hoping not to be noticed to manage great power competition. And when they did that didn't work. They saw the patron, which is the US. And that didn't work either. Now, what both these strategies – kind of been passive or laying low and hoping for the best and looking for a patron – have in common is that you hand over what agency you have to some external force, right? With very tragic results, we know.

Now, I fear that Laos in particular has got itself into a situation of path dependency vis a vis China. Now I can't really blame them because, you know, who else is going to invest in Laos on the scale they need. Cambodia is much better. I think Cambodia under Hun Sen and Hun Manet has a much stronger sense of its own national interest. Now when I say exercise agency, I don't mean that you need to be neutral or you need to be even-handed because that's impossible, right? What I mean is that you have to have a very clear sense of your own national interest, and you pursue them in whichever direction they take you. And you don't have to line up all your ducks neatly in one direction or another. I'll give you an example of what I mean. Singapore. Right? Now unless you've been living under a rock, you should know that in the domain of defense and security, we have chosen long ago. Right? And I don't think we're going to change our choice. On the other hand, on certain political issues – for example, the idea that certain ideas are universal in nature and therefore give external parties some right to interfere in your internal affairs – our attitudes are much more aligned with those of China or even Russia, which disconcerts our Western partners sometimes. And in terms of economics, we are quite omnidirectional, shall we say. We will go in any direction that our interest take us. I mean, prudence and law permitting. And I think that's a very general Southeast Asian attitude.

Some people think I am critical of, say, Laos, which I mentioned, because it's taken a very pro -China route. That's not the point. The point is they are free to choose. They're free to choose as we are free to choose. But they have to choose in their own interest and they should not therefore, having chosen one domain – I think it's perfectly logical for them to go with China in the economic domain because there's nobody else that is going to provide the the level of investment they need – but, however, that should not constrain them from pursuing their interest in other domains if it takes them in different directions. Right?

Now, Malaysia is extremely distracted right now. Its domestic politics is far more complicated than absolutely necessary. Right? To some degree, that could also be said of Thailand. In fact, Thailand has been domestically distracted for the last 15 or 16 years. And that has limited its ability to exercise its agency. I think Indonesia is doing quite well. I think Philippines is doing quite well. But Philippines, as you know, has a tendency to swing from one extreme to another. But that's them, you know, who are we to criticize. But my point is this. However small you are, however weak you are, there is always an opportunity to exercise agency. Right? Otherwise, Singapore should not exist. But we do. And we tend to call it existing.

But the key factor here is one you mentioned. The key factor is your domestic politics, your domestic capabilities to define your interest and pursue them. Your domestic ability to have the agility to pursue your interest in multiple directions according to what those interests are in different domains. Now that's where the ten countries that currently make up Southeast Asia differ quite widely. Quite widely. Actually, widely is not the wrong word, actually. You have on one extreme, perhaps, Laos and the other extreme because we are a small country too, Singapore. And you have all kinds of degrees in between.

TAIWAN CONTINGENCY STAKES AND STATE OF REGIONAL PREPAREDNESS

ASEAN Wonk: I wanted to switch a little bit to talk about some of the future flashpoints and issues and stakes for Southeast Asia. One of them that is dominating the headlines is Taiwan. And beyond the hype around 2027 being when the Chinese military should be prepared for Taiwan contingency, the stakes for Southeast Asia itself as a region is potentially immense as well. Bloomberg estimates the cost to Southeast Asia is about twenty percent of its GDP potentially, and there are hundreds of thousands of overseas workers as well that are in Taiwan. Different countries have different stakes in that. But how do you see the region responding to a potential Taiwan contingency. And obviously, there's various contingencies, uh, and the responses will be diverse depending on those contingencies. And also, what's your sense of how prepared regional states are relatively speaking for this contingency, which is, you know, quite a lot of stakes in terms of where Southeast Asia is and where it's headed?

Ambassador Bilahari Kausikan: Okay. Let me make one general point….

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