Introduction

Summary

The twenty-three chapters in Southeast Asian Affairs 2016 address a vast range of pressures and opportunities for the peoples of the region, from the political impact of spreading social media, to economic and political models showing signs of atrophy, to the large and turbulent regional ripples of economic transformations and policy adjustments around the world. States of Southeast Asia in 2015 faced bottom-up pressures for political and economic change, a tough global economic environment, and more major-power involvement, and even contestation, in the region. Times were very interesting. All of these pressures are likely to persist and potentially intensify in 2016 and beyond. Political and policy changes to address these structural continuities will be paramount.

External Forces

Global and wider regional forces — most, negative — had greater impact in Southeast Asia in 2015. Cassey Lee's regional economic outlook chapter analyses how the fall in commodity prices, slowing growth in China and tightening U.S. monetary policy affected Southeast Asian economies. None were spared, but the effects were very varied. Brunei was the hardest hit and remained in recession given its undiversified economy heavily dependent on oil export revenue. The most open economies in the region as measured by trade flows — Singapore and Malaysia — also suffered from these external headwinds. The headwinds are expected to continue throughout 2016, suggesting politically difficult reforms will be necessary across the region to maintain growth and development.

Carlyle Thayer's regional security outlook chapter focuses on challenges to ASEAN's goals of regional autonomy, centrality and community building. China's rapid construction of artificial islands on seven disputed land features in the South China Sea stoked the strongest ASEAN language on the disputes and more intense U.S.–China rivalry. Movement on the long-discussed ASEAN–China Code of Conduct in the South China Sea progressed at a much slower pace. In 2015 the threat of regional spillover from the Islamic State's rise in Syria and Iraq and the growing number of Southeast Asians joining those conflicts and returning home became imminent and then, in January 2016 in Jakarta, realized.

The Major Powers

While the domestic political developments of Southeast Asian countries in 2015 strongly reflected the diversity and fluidity of the region as a whole, the strategic policy settings with relation to Southeast Asia of the four most important extraregional major powers — the United States, China, Japan and India — had two powerful commonalities.