|
Ashik J Bonofer
25 October 2026 |
During the third quarter of 2026, from July to September, Southeast Asia experienced numerous developments amid shifts in international affairs, including economic challenges, territorial disputes, political unrest, and environmental concerns. Despite the rapidly changing circumstances, the region also confronted these issues. This commentary provides an overview of several major concerns.
1. Fallouts of the US-Iran War
Since the U.S. war on Iran began, the global economy has faced a severe crisis, marked by rising oil prices and persistent inflation. Southeast Asia has also felt these pressures, yet the region’s economic performance has remained comparatively strong. According to McKinsey & Company, Vietnam and Malaysia grew by 8.39 per cent and 6.0 per cent, respectively, driven by technology- and trade-led economic activity. Other economies also posted solid growth, with Singapore expanding by 5.9 per cent and Indonesia by 5.3%. Thailand and the Philippines grew more modestly, at 1.9 per cent and 2.3 per cent, respectively. Despite inflationary pressures and monetary volatility, output in electronics, electrical equipment, and other technology-related sectors points to continued regional growth this quarter and in the months ahead.
2. South China Sea dispute with China
A further issue with significant implications for the region is the South China Sea territorial dispute with China. On 12 July 2026, the region marked the tenth anniversary of the 2016 Arbitral Award, a landmark decision issued by an Annex VII tribunal constituted under the United Nations Convention on the Law of the Sea (UNCLOS) in *The Republic of the Philippines v. The People's Republic of China (PCA Case No. 2013-19), administered by the Permanent Court of Arbitration (PCA) in The Hague, Netherlands. The tribunal held that China’s asserted historic-rights claims within the nine-dash line had no legal basis insofar as they exceeded the maritime entitlements established under UNCLOS. It further determined that none of the Spratly Islands could generate an exclusive economic zone or continental shelf, limiting the potential scope of maritime claims arising from those features. The tribunal also concluded that China had interfered with the Philippines’ fishing and petroleum-exploration rights and had caused serious harm to the marine environment through large-scale land reclamation and construction. Although the Award is final and binding on both the Philippines and China, Beijing has rejected it, underscoring the persistent gap between international legal rulings and political compliance. China has also accused the United States of orchestrating the case against it.
China continues to interfere unlawfully with the traditional fishing rights of Filipino fishers at Scarborough Shoal. Fishing communities from the Philippines, China, Taiwan, and Vietnam have historically used the Shoal. Since China established effective control over access to the Shoal in 2012, Filipino fishers have faced restrictions and reported being unable to fish freely in an area that has sustained their communities for generations. Many remain reluctant to travel to Scarborough Shoal, citing fears of harassment by Chinese vessels. This coercive conduct challenges not only states' legal rights but also the livelihoods of fishing communities. Despite these pressures, smaller states continue to have limited influence in the face of such challenges.
3. Political unrest in Thailand, Indonesia and Myanmar
Other major security issues faced by the countries of Southeast Asia is the internal conflicts. During this period, three major conflicts and security crises affected Southeast Asia. First, the protracted Patani-Malay separatist insurgency in Thailand’s southernmost provinces—Narathiwat, Yala, and Pattani—intensified. On August 22–23, 2026, the region experienced its largest coordinated separatist operation in months, with more than fifty-one attacks reported across 21 districts; some accounts put the total as high as 71 incidents. The escalation followed a deadly July assault on a military checkpoint that killed five Thai security personnel and injured six civilians. The Barisan Revolusi Nasional (BRN), the dominant insurgent group, used the operation to demonstrate its capabilities. Despite efforts to resume peace talks, the August violence prompted an indefinite postponement.
Second, Indonesia faced a sharp escalation in civil unrest amid economic stagnation and declining public trust in the political elite. On August 27, 2026, thousands of students, labour union members, and other civilians marched on government institutions in Jakarta, Yogyakarta, and Makassar to protest President Prabowo Subianto's administration. They called for passage of the long-delayed Asset Forfeiture Bill, which targets corrupt officials; repeal of an expensive, allegedly corrupt free school meals program; and an end to the military’s expanding role in civilian governance.
Third, conflict intensified in Myanmar following the junta's widely rejected elections. In September 2026, the military junta, led by Min Aung Hlaing, launched extensive ground and air counteroffensives. Its forces focused on recapturing resource-rich strategic locations and trade routes in central Myanmar while pushing back the Arakan Army in Rakhine State. The junta also conducted a sustained campaign of airstrikes against schools, hospitals, and displacement camps, seeking to undermine civilian morale. Although the junta recognises that a military victory may be unattainable, it has used purported peace talks to weaken rebel groups’ morale and isolate them internationally.
4. Inter-connected environmental issues
Southeast Asia faced three interconnected environmental challenges: regional natural disasters, El Niño-related pressures on food and water security, and transboundary haze. During this period, the ASEAN Coordinating Centre for Humanitarian Assistance on Disaster Management (AHA Centre) recorded more than twenty disasters between July 6 and 12, 2026, as well as flooding in August and September. Seasonal monsoon conditions and individual storms continued to trigger damaging floods, while El Niño contributed to hotter, drier conditions. Its effects on food security also raised concern, placing substantial pressure on agricultural livelihoods, shared water resources, and fisheries. Some countries reported agricultural losses. Reports warned that, if these conditions persist, food shortages could become severe in 2027.
The next major issue was the transboundary haze crisis. Forest and peatland fires in Indonesia, particularly in Sumatra and Kalimantan, generated regional air pollution. In July, smoke from numerous fires affected Indonesia, Malaysia, Singapore, and the Philippines. El Niño-related heat and dry conditions further intensified the crisis. Reports also documented more than 50,000 cases of respiratory infections in Indonesia. The situation continued to worsen, with health impacts persisting into October.
To Conclude
It is important to recognize the timely significance of the 33rd ASEAN Regional Forum (ARF). Convened on July 23 in the Philippines alongside the 59th ASEAN Foreign Ministers' Meeting (AMM-59) and related meetings, the forum was a major regional event. It formally adopted the Manila Plan of Action for 2026–2036, establishing a framework to guide ARF activities over the next decade. The agenda is expected to address a range of challenges, including economic uncertainty, intensifying strategic competition, and interconnected risks such as climate change, cybersecurity threats, and supply chain disruptions. ASEAN is also expected to work with China on implementing the Code of Conduct in the East China Sea.
