Podcast Highlights: Southeast Asia and the Indo-Pacific Construct

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Dr. Stephen Nagy received his PhD in International Relations/Studies from Waseda University in 2008. His main affiliation is as a professor at the International Christian University , Tokyo.

Stephen is also a fellow at the Canadian Global Affairs Institute (CGAI); a visiting fellow with the Japan Institute for International Affairs (JIIA); a senior fellow at the Macdonald-Laurier Institute (MLI); and a senior fellow with the East Asia Security Centre (EASC).

He also serves as the Director of Policy Studies for the Yokosuka Council of Asia Pacific Studies (YCAPS) spearheading their Indo-Pacific Policy Dialogue series.

Stephen is currently working on middle power approaches to great power competition in the Indo-Pacific, understanding Japanese foreign policy and Sino-Japanese relations.

This episode is available on Apple Podcasts, YouTube, Amazon Music, and many other major platforms via our Spotify Podcaster Page.

Key Takeaways

The discussion highlights the complex and dynamic geopolitical landscape of the Indo-Pacific, shaped by the US-China rivalry and its impact on Southeast Asian nations. Key takeaways include:

• The Indo-Pacific construct represents a shift in global economic and strategic power, creating both opportunities and challenges for the region.
• Southeast Asian nations are caught in the US-China rivalry, striving to maintain strategic autonomy and avoid choosing sides.
• The region is experiencing economic and financial shifts, with supply chains diversifying and new markets emerging, but true economic leveling-up requires more than just infrastructure investments.
• China’s domestic landscape and global ambitions are evolving, with the Belt & Road Initiative likely to become more focused and strategic given its economic slowdown.
• Multilateralism faces challenges in addressing global issues, leading to a rise in mini-lateral cooperation among like-minded countries.
• Democracies are facing new challenges from disinformation and non-traditional forms of warfare, requiring a multi-pronged approach to defend against them.
• The future of the Indo-Pacific will be shaped by the ongoing US-China rivalry, with Southeast Asia remaining a key region to watch.

Defining the Indo-Pacific Construct

Steven explains the origin of the term “Indo-Pacific Construct”, stemming from a 2005 speech by former Japanese Prime Minister Shinzo Abe, who envisioned the Indo-Pacific as a region encompassing the Indian and Pacific Oceans. Abe recognized the shift in global economic power towards this area and saw the need for a framework to address the opportunities and challenges arising from this shift.

Steven details the vast geographical scope of the Indo-Pacific, spanning from the East Coast of Africa to North and South America, encompassing Australia, India, and, importantly, Southeast Asia. He highlights this region as a hub for emerging consumers, burgeoning middle classes, and technological innovation, but also as a potential hotspot for conflict, both kinetic and those related to non-traditional security issues like climate change and pandemics.

Challenges and Opportunities for Southeast Asia

The conversation shifts to the challenges faced by Southeast Asian nations caught in the US-China rivalry. Steven uses the analogy of “two elephants fighting in the grass, the mice get squashed,” to illustrate how these smaller nations feel squeezed between the two superpowers. He acknowledges the efforts of Southeast Asian countries to navigate this complex geopolitical landscape, primarily through the Association of Southeast Asian Nations (ASEAN), a regional organization aiming to foster cooperation and balance.

The host inquires about a common theme among Southeast Asian nations, given their diversity. Steven emphasizes the desire to avoid choosing sides and maintain strong economic relationships with both China and the US. He cites repeated statements from leaders across the region emphasizing this desire for strategic autonomy.

Economic and Financial Implications

The discussion delves into the economic and financial implications of the US-China rivalry on Southeast Asia. The host observes the trend of businesses shifting supply chains out of China and into other parts of the region, driven by geopolitical tensions and China’s economic slowdown. Steven confirms this trend, highlighting Vietnam, Philippines, Indonesia, and Malaysia as beneficiaries of this shift. He predicts an increase in foreign direct investment (FDI) and overseas development assistance (ODA) flowing into these countries, creating new markets and opportunities for both domestic and foreign investors.

However, Steven also points out that while Southeast Asian economies might benefit from this diversification, true economic leveling-up requires more than just building infrastructure for foreign manufacturing. He stresses the need for investing in education, developing software (i.e., human capital), and fostering indigenous economic growth and innovation to create a sustainable and prosperous future.

China’s Economic and Political Landscape

The conversation turns to China’s domestic landscape and its global ambitions, particularly the Belt and Road Initiative (BRI). Steven draws parallels between the BRI and Japan’s economic engagement with Southeast Asia in the 1960s, which initially faced criticism and anti-Japanese sentiment. He observes that China has learned from Japan’s experience and is likely to become more strategic and focused in its BRI investments, particularly given China’s economic slowdown.

The host raises concerns about China’s assertiveness, particularly with regard to Taiwan. Steven acknowledges Taiwan’s importance but emphasizes that China, despite its rhetoric, is unlikely to resolve the Taiwan issue through military force. He argues that China’s long-term strategy, shared by leaders since the post-Civil War period, is to achieve peaceful reunification.

China’s Global Influence and the Role of Multilateralism

The discussion shifts to China’s growing global influence and the limitations of multilateral institutions in addressing global challenges. Steven cites examples like the Gaza-Israel conflict, the Rohingya crisis in Myanmar, and the Ukraine war, where multilateral bodies like the United Nations have been ineffective in finding solutions due to internal fractures and power dynamics.

This ineffectiveness of multilateral institutions, he argues, is driving the trend towards minilateralism, where smaller groups of like-minded countries cooperate to achieve specific objectives. He highlights the recent AUKUS agreement between Australia, the UK, and the US as an example of this trend, focusing on sharing sensitive technology like nuclear submarines and collaborating on emerging technologies like AI and quantum computing.

Challenges to Democracy and Disinformation

The conversation touches upon the challenges posed by disinformation and the rise of non-traditional forms of warfare. Steven acknowledges the long-standing use of information manipulation by authoritarian regimes, but emphasizes the new momentum provided by social media and the internet. He highlights Taiwan and South Korea as countries on the forefront of battling Chinese disinformation campaigns.

The host expresses concerns about defending democracies against these new forms of warfare, given their inherent openness. Steven advocates for a multi-pronged approach involving identifying, mitigating, and responding to disinformation, as well as developing literacy and education campaigns to equip citizens with critical thinking skills. He proposes a non-state level collaboration between universities across democratic countries to develop these strategies.

The Future of the Indo-Pacific

The conversation concludes with a discussion about the future of the Indo-Pacific, particularly the US-China rivalry and its implications. Steven acknowledges the rise of bipolarity in the region, with Southeast Asian nations striving to maintain strategic autonomy. He predicts a continued trend towards minilateralism as countries seek to address specific challenges and build resilience.

He raises concerns about China’s economic model, which prioritizes industrial policy, picking winners, and investing heavily in creating monopolies. While acknowledging China’s potential success in dominating certain sectors, he questions whether this model, driven by price rather than politics, will ultimately be sustainable, particularly as other countries are increasingly willing to pay more to avoid becoming dependent on a system controlled by the Chinese Communist Party.

The conversation underscores the need for continued dialogue and engagement across the region to navigate these complex challenges and build a sustainable and prosperous future for all involved.

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