| Arrizal Jaknanihan |
The world has witnessed the emergence of a geoeconomic order, in which major countries increasingly view economic interdependence as a source of vulnerability rather than strength for economic security. But for Southeast Asia, maintaining openness remains indispensable to economic security.
Avoiding isolation from the global economy helps countries in the region ensure domestic security through economic stability and regional security through amicable relations with partners.
In response to rising geoeconomic tensions, major countries have increasingly advocated for greater self-reliance by limiting and even weaponising international trade. The United States with its worldwide tariffs bears significant responsibility. But others, including Japan through its Economic Security Promotion Act and the European Union through its Economic Security Strategy, are also complicit in propagating a narrative for the securitisation of trade and investment policies.
Against the global trends, Southeast Asian countries have responded by resisting isolationism in their approach to economic security. At the October 2025 ASEAN Summit, regional foreign and economic ministers aptly asserted in their joint statement that upholding a ‘predictable, transparent, inclusive, free, fair, sustainable and rules-based multilateral trading system’ remains the region’s response to the ‘growing economic–security nexus’. But nationalist sentiments promoting self-sufficiency, pushed by political leaders in the region, may push Southeast Asia towards the emerging geoeconomic order.
While geoeconomic risks exist, the cost of isolating Southeast Asia from the global economy far outweighs the benefits for economic security in the region. At its core, the ability of Southeast Asian leaders to ensure the security of their states has long depended on sustained economic performance.
Economic growth and development not only generate sources of national power, but they also underpin the legitimacy of incumbent regimes that ensure the survivability of the country. Historically, regime collapse in Southeast Asia — such as in Indonesia, Thailand and the Philippines — was closely tied to sudden and prolonged economic downturns. Similarly, economic grievances have become a common factor that drove various rebel movements across the region.
Managing integration into the globalised economy and regional production networks, particularly in electronics and vehicle manufacturing, has become foundational for economic growth and security in the region. Since the early 2000s, the share of ASEAN countries’ international trade with countries outside the region has consistently exceeded 75 per cent of their total trade, making the region’s economies highly globalised. Similarly, the share of foreign direct investment from outside Southeast Asia stood above 80 per cent of total investment in the region between 2021 and 2023.
Given this dependence on the globalised economy as the engine of growth, an inward-looking economic security strategy would not only cause potential economic losses but also pose an internal security threat. The risks are particularly severe for highly trade-dependent countries in the region, with trade-to-GDP ratios in 2024 ranging from over 100 per cent for Malaysia, Vietnam, Thailand and Cambodia to 322 per cent for Singapore.
The labour-intensive nature of manufacturing industries in the region means that economic isolationism incurs the risk of job losses and economic grievances, which might contribute to political unrest. Previously, inward-looking policies have partly contributed to the sluggish economic performance that sparked nationwide protests in Indonesia in August 2025, followed by similar protests in the Philippines. The protests demonstrated the destabilising economic impacts of protectionism.
Beyond domestically oriented objectives, open economic ties also provide security benefits, helping to improve Southeast Asian countries’ relations with external partners. In the era of geoeconomics, countries are increasingly associating economic ties with geopolitical alignment. Economic openness can help secure economic benefits and send the message that Southeast Asian countries remain committed to ‘not picking sides’ amid geoeconomic competition.
Only by maintaining openness can Southeast Asia secure these gains while avoiding formal alignment with any one bloc. Indonesia was able to demonstrate its commitment to multi-alignment by becoming a full member of the BRICS grouping, while simultaneously seeking membership in the OECD and securing a free trade agreement with the European Union.
Southeast Asian countries’ persistence in their non-retaliatory stance towards US tariffs has led to the incremental reduction of tariff measures, as evident in Washington’s recent agreements with Cambodia, Malaysia, Thailand and Vietnam. At the same time, countries in the region were also successful in securing a third upgrade of the ASEAN–China Free Trade Agreement, substantially increasing the economic benefits while balancing competing great powers.
The recent trend towards geoeconomics may give the illusion that a more isolated economy is a more secure economy. Southeast Asia’s circumstances suggest the opposite. Far from enhancing security, economic isolation would leave the region more vulnerable.
Instead, as Malaysian Prime Minister Anwar Ibrahim emphasised at the 2025 ASEAN Summit, economic openness in Southeast Asia brings ‘prosperity, stabilises our politics and strengthens regional cohesion’. Economic security in Southeast Asia should be defined not by isolation, but by how openness translates into domestic prosperity, stability and amicable relations.
First published on East Asia Forum. https://doi.org/10.59425/eabc.1767045600
AUTHOR: Arrizal Jaknanihan is a Master of International Relations graduate from the Coral Bell School of Asia Pacific Affairs, The Australian National University.
Asia Pacific Newslog 