Less than two years after the end of the Japanese occupation of the former Netherlands East Indies (NEI), the founding president and co-founder with Mohammad Hatta of the Republic of Indonesia, Soekarno, offered a short address that was pregnant with meaning. The venue was a congress of student radicals, and the date was 24 April 1947—just two months before a full-scale Dutch military assault upon the beleaguered Republic. As Soekarno stated,

This was a reference to a series of uprisings in West Java and West Sumatra in late 1926 to early 1927 that were crushed within days by the Dutch colonial forces, following which captives were dispatched to Boven Digul, a prison camp in remote West New Guinea.

In mentioning the Partai National Indonesia (PNI)—the political party he founded after the failure of the 1926–27 rebellions—Soekarno is referring here to his own arrest, imprisonment and trial that led to the dissolution of the party.

Although the Covid-19 pandemic may appear to be a distant memory, its impacts continued to shape recovery in Southeast Asia in 2024. The near-term economic outlook for Southeast Asia remains generally positive, supported by resilient domestic demand and continued strength in external demand, driving exports and investment. The overall outlook remains positive despite the rise in risk and uncertainty affecting the regional and global economies. These include, for instance, the wars in the Middle East and Ukraine, and further escalation in US-China tensions leading to increased use of protectionist measures. The re-election of Donald Trump in November as the forty-fifth president of the United States has increased concerns over the future course of US-China relations as well as global protectionism and a rules-based order. With a powerful mandate, winning both the electoral college and popular votes, there are concerns that a second Trump term could be more disruptive to the world than the first. Southeast Asia will be affected mainly because it is heavily dependent on trade and investment and has strong economic linkages with the United States and China. Should an all-out trade war erupt, then it could be disastrous for world trade and growth, derailing the positive near-term outlook for the region.

Post-Pandemic Economic Recovery and Outlook

The Covid-19 pandemic had varied impacts across Southeast Asian countries, with most experiencing severe contractions in 2020. The recovery trajectories also differed (Table 1). Vietnam, in particular, demonstrated remarkable resilience, maintaining positive growth in 2020 and 2021, achieving robust 8 per cent growth in 2022, before experiencing a moderation in the subsequent years.

This chapter examines Thailand's economic performance in 2024 and explores the challenges expected in 2025. The first section analyses Thailand's economic performance, highlighting moderate improvements in the country's GDP alongside relative price stability. But despite stable prices, a critical concern is the looming risk of deflation, which could pose significant challenges to sustained economic growth. The second section explores Thailand's export competitiveness, emphasizing its continued importance to the country's economy. The share of goods and services exports in GDP remained substantial, driven by key factors such as the growing significance of the United States as an export destination and the increasing phenomenon of export circumvention, where Chinese goods reach the US market through third markets like Thailand. The third section outlines key challenges Thailand may face in 2025. These include technological disruption in key export products and rising agricultural export competition from lower-income countries. Geopolitical uncertainty further complicates Thailand's export prospects, with the proposed blanket tariff plan of the second Trump administration and escalating US-China trade tensions likely to heighten scrutiny over export circumvention. A surge in imports from China presents an additional challenge that Thailand must address in the coming year.

Economic Performance

Growth and Price Stability

In the first three quarters of 2024, Thailand's GDP increased gradually from 1.6 per cent to 2.3 per cent in Q1 2024 and to 3 per cent in the following quarters. This growth was driven by a pick-up in government spending that had been delayed because of political instability following the 2023 general elections.

Moving with the times, the Dutch Ethical Policy signalled the prospect of a new consensus between the colonial power and the colonized—namely, that there could be no awakening without enlightenment. Certainly, progress and advance were common themes that entered both conservative as well as radical discourse, although the means and purpose of educating the population as to their awakening could not have been more different. The gap in perceptions on the part of the colonial power and their subjects only sowed the seeds of revolutionary thought and action. Notably, the crackdown on the communists dating from 1926 to 1927 created a political vacuum inside the Dutch colony concerning the anti-colonial movement. Into this space stepped the “nationalists”, or that part of the population—both educated and uneducated—that came to espouse a new sense of belonging around a yet nameless nation, just as the term “Indonesia” began to enter the vocabulary. Modern in their orientation, they are sometimes termed “secular”, and that distinguishes them from BU, with its syncretic Javanese orientation, and SI and Muhammadiyah, with their explicit Islamic identity.1 Symbolic in this sense was the emergence in 1927 of the Partai National Indonesia (PNI, or Indonesian Nationalist Party), pledging acts of non-cooperation with the Dutch to force the pace for political independence, in which it was joined by several other Islamic and nationalist parties.

A graph posted by Financial Times chief data reporter John Burn-Murdoch went viral on social media following the defeat of Kamala Harris by Donald Trump in the US presidential election. The graph indicated that it was not Harris's gender or race that caused her to lose but high inflation because of supply-side disruptions caused by the global pandemic. Burn-Murdoch posited that the Democrats joined 2024's “graveyard of incumbents”, a phenomenon where every ruling party in developed countries contesting elections suffered a loss of votes. In 2024, governing parties and leaders experienced an unprecedented series of reversals, ranging from the Tories in Britain and Emmanuel Macron's Ensemble coalition to the Liberal Democrats in Japan, with even Narendra Modi's once-dominant Bharatiya Janata Party losing support.

Harris's defeat cannot be separated from inflation in the United States, which has continued to increase since 2021, peaking at 8 per cent in 2023. Since 2021, Americans have experienced a cumulative price increase of 16.8 per cent. While President Joe Biden was finally able to control inflation towards the end of his term, the purchasing power of Americans had already been eroded, making it easier for Trump to win both the electoral college and the popular vote.

At first glance, Indonesia seemed to buck this global trend. Following two unsuccessful bids in 2014 and 2019, Prabowo Subianto was finally elected president in 2024, largely benefitting from the coat-tail effect of President Joko Widodo (Jokowi).

As this work has brought to the fore, Indonesia's War of Independence (1945–49) was long in the making and was not only “made in Japan”. As rationalised by Indonesian Marxists especially, its roots or “lineages” went back to the zaman penjajahan Belanda, or era of high Dutch colonialism, not excepting distant social memories of the earlier VOC invasion of the archipelago and the struggles of disparate peoples to preserve their autonomy. Nevertheless, it was the more recent past that weighed most heavily, such as the thwarted dreams of the nationalists, communists and organized Muslims, culminating in the repressions that both preceded and followed the failed 1926–27 rebellions, including the zaman pergolakan jang maha hebat, or the age of great upheaval of the Japanese occupation, to evoke Dr Amir's slogan. As demonstrated in an opening chapter, Dutch surveillance and incarceration such as took place in Boven Digul not only affected the cream of the native elite but also imposed a high degree of trauma on the collective body politic. We should not be surprised then that at the moment of Merdeka in August 1945—however conflicted it was—there would be no turning back from this shared experience under colonialism as an extraordinary closure of ranks from among the political class, and even the masses, would spearhead Indonesia's postwar struggle for independence.

This chapter examines the shifting dynamics of the global trade order, in particular the growing threat of protectionism and its implications for ASEAN economies. It also highlights the intensifying global competition, which could pose an additional challenge for ASEAN members as they adapt to a more restrictive trade environment. Finally, it outlines strategies to strengthen the region's economic resilience and competitiveness.

Section 1 analyses the current trends in world trade and concludes that, while trade remains resilient, it is slowing and becoming increasingly vulnerable to government-imposed restrictions. This shift is driven by global imbalances and a tendency of governments to protect domestic industries. Nevertheless, while merchandise trade faces headwinds, services trade has been expanding rapidly, propelled by technological advancements and innovations in business practices that reduce barriers to remote service delivery.

Section 2 assesses the question of whether these trends are here to stay. Rising competition, particularly from China, is prompting countries to adopt protectionist policies. This trajectory has been further exacerbated by the return of Donald Trump to the US presidency. His administration is expected to impose stricter trade policies, including higher tariffs, that could reshape global trade dynamics. Additionally, Chinese overcapacity is likely to worsen as the country continues to promote aggressive state-led industrial policies aimed at self-reliance in critical supply chains. This will lead to market distortions and intensify competition in global markets.

Joko “Jokowi” Widodo's presidency from 2014 to 2024 transformed Indonesia's political and economic landscape. He embodied a new democratic leadership style that emphasized grassroots participation and relied heavily on populist rhetoric to mobilize support. He prioritized infrastructure development, economic growth, and social welfare measures to reduce poverty and enhance connectivity. While these measures were arguably successful, he also faced major hurdles such as fiscal sustainability, public debt, democratic backsliding and inadequate anti-corruption measures—all of which tarnished his reformist reputation. The transition from Jokowi to Prabowo Subianto, who won the 2024 presidential election, was crucial to Indonesia's democracy. Prabowo's past, however, is complex. His contentious military career, coupled with allegations of human rights abuses from the late 1990s, raised questions about his commitment to democracy and civil liberties. His campaign capitalized on the continuity of the strength of Jokowi's administration although at the same time it also addressed public dissatisfaction—such as over economic disparities and concern about foreign influence over major infrastructure projects—despite himself benefiting from Jokowi's support via the latter's son, Gibran Rakabuming Raka, as his running mate. With pledges of strong leadership and national resilience, Prabowo's triumph reflects a shift in public opinion towards stability, security and forceful governance. Upon assuming office, Prabowo formed a coalition government of diverse political orientations incorporating all parties except PDI-Perjuangan.

The Philippines’ political trajectory remained anchored to the dynamics of its ruling dynasties in 2024. The Marcos-Duterte alliance, which secured a dominant victory in the 2022 elections with an unprecedented electoral mandate not seen since the martial law era, appeared poised to consolidate its grip on power. Campaigning under the banner of “Uniteam”, Ferdinand “Bongbong” Marcos Jr. and Sara Duterte promised to uphold the legacies of President Rodrigo Duterte while pursuing a vision of national unity grounded in pro-people leadership. As heirs to the populist-autocratic presidencies of their fathers, the duo pledged to transcend the country's fractious political landscape. Yet, despite the availability of more progressive, experienced and competent alternatives, over 31 million Filipino voters (56 per cent of the electorate) placed their faith in the promise of unity.1 Within just two years, however, the dissolution of this seemingly solid partnership has portended a potential return to the cycles of political instability that have historically hindered the Philippines. This rupture threatens to derail domestic political and economic momentum while diverting attention from the Marcos Jr. administration's strategic vision for a “Bagong Pilipinas” (New Philippines).

While scepticism regarding the durability of the Marcos-Duterte “dynastic cartel” existed from the outset, the rapid unravelling of the alliance was unexpected. A more pragmatic political calculus would have anticipated tensions emerging closer to the end of Marcos Jr.'s term, aligning with the 2028 national elections. By then, Sara Duterte could have cultivated a robust political infrastructure capable of securing the presidency independently, even without Marcos Jr.'s endorsement.

In 2024 the trend lines in the South China Sea dispute continued to move in the wrong direction. Sino-Philippine tensions escalated as the administration of President Ferdinand Marcos Jr. continued to push back against China's territorial and jurisdictional claims in the country's exclusive economic zone (EEZ). Tensions were centred on the Philippines’ monthly resupply missions to its garrison on board a grounded warship on Second Thomas Shoal. China's use of grey zone tactics— provocative actions below the threshold of armed conflict, including ramming Philippine vessels and using water cannons against their crews—triggered fears that Manila might call on its treaty ally the United States for military support, resulting in a US-China confrontation at sea.

With regard to the other Southeast Asian claimants, relations between Vietnam and China remained relatively stable despite Vietnam's extensive land reclamation activities in the Spratly Islands. Malaysia's approach to the dispute remained consistent with previous administrations: asserting the country's sovereign rights while downplaying bilateral tensions. In contrast, Indonesia's new government, led by President Prabowo Subianto, inexplicably overturned three decades of policy by acknowledging an overlapping maritime boundary dispute with China near the Natuna Islands. Meanwhile, against the backdrop of rising maritime tensions, negotiations between ASEAN and China for a Code of Conduct (CoC) failed to make significant progress.

Incarceration under modern colonialism took various forms, but, as this chapter demonstrates, it also helps to define the nature of the state as an oppressive institution. That holds for totalitarian as much as liberal states, and wartime Australia is not exempted from this stricture. Certainly, the Dutch were not alone among colonial regimes in Asia in establishing repressive carceral systems. Reaching back to the first arriving Portuguese and Spanish in the archipelago, such practices were shared by all the foreign interlopers—Dutch, British, French and Japanese. Backed by legal institutions and courts with the power to dispense life and death, such systems would evolve. From the crude enslavement practices of the first arriving Dutch down through the sequestration of war captives, such as defined by the crushing of the Diponegoro rebellions and carried on through the multi-generational Aceh wars, to systems of forced labour and conscription of the Dutch “Culture System”, to the internment of malefactors against the Dutch rust en orde (peace and order) before the Japanese occupation, and carried on during Indonesia’s war of independence, incarceration was a constant. Nevertheless, in the last decades of Dutch rule, reaching back across the centuries, and the major subject of this book, a new category of miscreant entered the legal lexicon—namely, anti-colonial nationalists, and communists.

The Soekarno-Hatta declaration of independence of the Republic of Indonesia on 17 August 1945 was not uncontested by either the Dutch or the arriving SEAC forces charged with taking the Japanese surrender and rescuing POWs (although the Japanese were vested with responsibility for law and order until Allied occupation forces took over or until a “lawful government was able to function again”). In part owing to this ambiguity, there would be five years of diplomacy and armed struggle before the Republic gained international recognition, by which time the United States had brought pressure to bear on the Netherlands, not to mention the pressure of international opinion. It is also true that, in the early weeks of the proclamation of independence, Soekarno and Hatta held legitimate fears that they would be arrested and tried as quislings, having collaborated with Japan, since war crimes investigations were ongoing, leading to the Tokyo War Crimes Tribunal. While the major local political actors confronting Allied forces on Java were not of a kind—the comparison with the politico-religious checkerboard of southern Vietnam in late 1945 offers a counterpoint—we see extraordinary unanimity in rejection of Dutch overtures where they did not prevail by force. Moreover, whether de jure or de facto, the Indonesian Republic had been created and, thanks to Japan, it hosted an armed force, the TNI, and an embryonic state structure was in place.