🌩️ The New Era of Instability – Regional Conflicts and Global Shocks

In 2025, ASEAN was shocked when war erupted between Thailand and Cambodia. It was the first interstate conflict in the region since ASEAN was established in 1967. More recently, regional stability has come under further strain following the outbreak of war in early 2026 between the United States, Israel, and Iran.

The impact has been amplified by a global energy supply crisis caused by the closure of the Strait of Hormuz. This war has increased nationalism and militarisation in the region, as states seek to anticipate and prepare for potential future conflicts.

ASEAN, often regarded as one of the most established regional organisations in the post-1998 era and known for its relatively steady economic growth, has sought to maintain this status quo. Its core objective has been to achieve shared prosperity and stability while deepening connectivity among member states to foster mutual understanding and common interests.

By effectively ‘alienating’ Myanmar after the coup and failing to prevent an interstate conflict among its members, ASEAN has also moved to admit its eleventh member, Timor-Leste, in an effort to strengthen the regional architecture and stabilise the region amid growing uncertainty.

This step remains premature in some respects, but it is nonetheless a move that deserves recognition.

For more on ASEAN's diplomatic response to the region's crises—from border conflicts to great-power rivalry—don't miss our latest report from Manila.
👉 Read more: 59th ASEAN Foreign Ministers' Meeting

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⚖️ ASEAN's Internal Response and the Great-Power Dilemma

Another key source of pressure on regional stability comes from the actions of major powers. Both China and the United States exert strong influence in Southeast Asia. China’s Belt and Road Initiative (BRI) is reshaping regional economic landscapes and, in many respects, its engagement with ASEAN societies is more visible than that of the United States, especially at the level of everyday economic and infrastructural needs.

The two powers compete most directly in terms of military presence and security arrangements. China holds a strong position in the South China Sea through its robust military deployment, while the United States remains influential in the broader Indo-Pacific, particularly through its alliances and presence in Australia and the Northeast Asian region.

To foster a more balanced and stable regional order, ASEAN requires an additional counterweight that can compete with China’s influence in people-to-people contact and economic development, thereby reducing over-dependence on a single external partner.

Australia is well-placed to serve as such a balancing power, helping to ensure that great-power competition in Southeast Asia remains more constructive than destabilising.

🇦🇺🤝 Australia's Hard-Power Role – Securing the Regional Status Quo

ASEAN–Australia relations have entered a new, more progressive phase. Since their first dialogue in 1974, the partnership has become increasingly substantive. In 2023, ASEAN and Australia signed a Comprehensive Strategic Partnership, and it was followed by the establishment of the Australia–ASEAN Centre, signaling Australia’s growing seriousness in deepening ties with ASEAN. Under the Albanese administration, Canberra’s policy appears more focused on consolidating Australia’s role as a key regional partner with Australia’s Southeast Asia Economic Strategy to 2040.

Two broad sectors are central to Australia’s position in the region: the political-military (hard power) and the socio-economic (soft power) domains.

In the hard-power realm, Australia has pursued closer security cooperation with several ASEAN member states, such as Indonesia, through agreements like the Jakarta Treaty on mutual defence and non-interference. That concrete step could be crucial for security in the region, at least ensuring that conflict in the southern part of ASEAN will not likely occur with that treaty. It will probably be followed with other examples, like with East Timor, Malaysia, and the Philippines in the future.

In terms of peace and stability, ASEAN needs Australia as one of the crucial external powers helping to maintain the regional status quo. Australia’s geographical proximity and long-term engagement enhance ASEAN’s bargaining position vis-à-vis other major powers. ASEAN has learned from the case of Timor-Leste, where Australia’s involvement in the peace and referendum processes, despite tensions with Indonesia at the time, eventually evolved into a relationship that both sides now wish to strengthen and move forward from.

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🌏 Australia's Soft-Power Strategy – Connectivity, Trade, and a Balanced Future

On the socio-economic side, Australia has placed greater emphasis on enhancing people-to-people contact between Australian and ASEAN citizens, as well as indirectly supporting connectivity among ASEAN societies themselves.

Australia’s soft-power strategy can be seen in at least three areas: ASEAN-Australia connectivity, cooperation in the technology sector, and the promotion of ASEAN–Australia trade.

In the realm of soft power, Australia has prioritised cooperation with ASEAN on connectivity, including the energy sector and the green economic transition. By signing a partnership with the ASEAN Centre for Energy in 2024, it also unlocked an A$6.9 million Energy Cooperation Package during the ASEAN-Australia Special Summit in March 2024. This approach offers an alternative to China’s BRI model, which often focuses on extractive industries and large-scale infrastructure.

Another promising area is the digital sector. Both Australia and ASEAN are positioned between the digital influence of China and the United States, as well as the European Union’s growing prominence in digital rights and regulation. The ASEAN Digital Economy Framework Agreement is expected to be signed in 2026, according to a study by Boston Consulting Group, and it may open opportunities for partnership or serve as a model similar to the cooperation between Australia and the ASEAN Centre for Energy.

In trade, Australia and ASEAN have formalised their cooperation through the ASEAN–Australia–New Zealand Free Trade Area (AANZFTA), which entered into force in 2010. This agreement now requires further reinforcement through updated commitments and complementary bilateral arrangements, such as the Indonesia–Australia Comprehensive Economic Partnership Agreement concluded in 2026.

Given these increasingly substantial initiatives, ASEAN should welcome Australia’s engagement as a way to strengthen the bargaining power of its member states and reinforce intra-ASEAN solidarity.

Stability has been a central asset of the region since the adoption of the ASEAN Charter, an asset that was seriously shaken by the Thailand–Cambodia conflict. With Australia’s constructive and balanced approach, a new environment may emerge in which ASEAN can pursue regional development and integration with greater confidence, while maintaining peace and stability amid intensifying great-power competition.

(JUN/ELS)

🇦🇺🤝 The new geopolitics of Southeast Asia…