From One Strait to Another
Issue 38 — Key Developments Across Brunei, Indonesia, and Malaysia
Editor’s Note
by Haniva Sekar Deanty, Lead Editor - Maritime Crescent Desk
This week, Muhammad Aiman examines Malaysia’s response to the killing of Iran’s Supreme Leader, Ayatollah Ali Khamenei, and the broader US-Israel-Iran escalation. Situating Malaysia within the country’s hedging strategy, our correspondent argues that Malaysia’s diplomacy reflects the continuity of balancing moral positioning and pragmatic restraint.
Wira Gregory then takes us to Borneo’s diplomacy of energy interdependence within the Sarawak-Brunei electricity export. The consolidation of a Borneo-centric energy corridor reflects ASEAN’s resilience, infrastructure security and economic diversification.
This week, we also look at Indonesia’s increasing state control over productive assets. Through cases spanning palm oil, mining even down to minimarket licensing, Rayhan Prabu argues that these measures form a coherent governing ideology rather than an isolated intervention. If ASEAN’s largest economy is raising investor alarm, what does that signal for the region’s vision of “common growth”?
Malaysia 🇲🇾
A Call for Restraint and Peace
by Muhammad Aiman Bin Roszaimi, in Cyberjaya
Malaysia has taken a firm and principled stance in response to the recent escalation of conflict in the Middle East, particularly following the United States and Israel’s military strikes on Iran that resulted in the reported death of Iran’s Supreme Leader, Ayatollah Ali Khamenei. The situation has quickly heightened regional tensions and sparked global concern, prompting Malaysia’s government to issue strong condemnations and call urgently for an immediate ceasefire and diplomatic engagement.
Prime Minister Datuk Seri Anwar Ibrahim has been at the forefront of Malaysia’s response. In an unequivocal statement, he “unreservedly” condemned the killing of Supreme Leader Khamenei, warning that such a deliberate targeting of a head of state sets a dangerous precedent and undermines the norms of international order. Anwar cautioned that this act could push the Middle East into a period of sustained instability with unpredictable consequences for global peace.
Extending his condolences to the Iranian government and people, the Prime Minister also urged Iran to exercise restraint and called on all parties involved including the United States, Israel, and Iran itself to step back from further escalation. He highlighted that the crisis cannot be resolved through force but rather requires dialogue and diplomacy.
Malaysia’s strong condemnation of recent developments in the Middle East reflects not only an immediate diplomatic reaction, but also a patterned foreign policy behaviour consistent with its long-standing strategic posture. At the official level, Malaysia’s actions fall into several identifiable categories.
First, there is normative diplomatic condemnation. Prime Minister Anwar Ibrahim publicly denounced the killing and urged de-escalation, framing Malaysia’s position within the principles of sovereignty, non-intervention and humanitarian protection. Such statements reaffirm Malaysia’s consistent support for peaceful conflict resolution and multilateral diplomacy.
Second, Malaysia’s response constitutes symbolic diplomatic positioning. By condemning the act while simultaneously calling for restraint rather than explicitly aligning with any military bloc, Malaysia avoids direct entanglement in the strategic rivalry shaping the Middle East. This allows the country to signal solidarity with affected Muslim-majority states without committing to confrontational policies that could damage broader diplomatic or economic interests.
Third, Malaysia’s reaction can be categorised as multilateral advocacy. The emphasis on ceasefire and international law indicates a preference for resolution through institutions such as the United Nations. This reflects Malaysia’s historical reliance on international institutions to amplify the voice of middle powers and smaller states in global crises.
Malaysia’s response is neither passive nor confrontational.
It represents calibrated diplomacy, condemning what it perceives as violations of international norms while avoiding strategic overcommitment. Malaysia’s condemnation of the latest Middle Eastern escalation should not be read merely as an emotional or ideological reaction. Rather, it reflects a consistent hedging strategy designed to preserve autonomy, maintain diversified relationships and project moral legitimacy in international affairs while minimising strategic risk.
Aiman is a PhD candidate in Security and Strategic Analysis at the National University of Malaysia. His research focuses on Malaysia’s space policy, ASEAN regional security, and the strategic implications of emerging technologies. His work explores how Malaysia’s defense policy and strategic culture shape its approach to outer space.
Brunei Darussalam 🇧🇳
Powering Borneo
by Wira Gregory Ejau, in Bandar Seri Begawan
Sarawak’s plan to export electricity to Brunei by early next year represents the emergence of subnational diplomacy in ASEAN, where resource-rich states like Sarawak are shaping regional energy and security trajectories. Brunei’s engagement with Sarawak’s grid reflects a recalibration of intra-Borneo relations with implications for ASEAN’s collective resilience.
Sarawak has already begun exporting electricity to Sabah and Kalimantan. Extending this network to Brunei embeds the Sultanate within the Borneo-centric energy corridor, of which it is very much a part of. For Brunei, whose economy remains heavily reliant on hydrocarbons, electricity imports diversify its energy mix and reduce exposure to volatility in global oil and gas markets. For Sarawak, the exports consolidate its ambition to become ASEAN’s energy supplier, positioning the state as a pivotal actor in regional energy diplomacy.
Energy flows create dependencies that influence national security calculations. Hence, the strategic bilateral link of Brunei’s reliance on Sarawak’s grid will require new assessments of infrastructure protection and contingency planning along the lines of cross-border coordination. In Southeast Asia, where critical infrastructure is increasingly viewed through a security lens, the Brunei–Sarawak connection exemplifies how energy diplomacy intersects with defence considerations as the reliability of Sarawak’s exports may potentially become part of Brunei’s broader risk calculus.
The planned expansion of Sarawak’s exports to the Philippines and Singapore situates Brunei–Sarawak cooperation within a wider ASEAN framework. Brunei’s participation in this network elevates its role from a small hydrocarbon exporter to a connector state in regional energy transition. This shift matters for ASEAN’s security community, whereby interdependence in energy can reinforce stability by embedding states in shared infrastructure. However, this also raises questions about vulnerability to disruption.
Brunei’s engagement with hydrogen projects could catalyze domestic debates about technological innovation and economic diversification. As it stands, energy cooperation has the potential to shape future expectations of modernisation and employment. Brunei’s youth, in particular, may view participation in hydrogen and renewable projects as a pathway to future-oriented industries.
The Brunei–Sarawak electricity link is best read as a functional step in deepening intra-Borneo cooperation. It ties Brunei into Sarawak’s expanding energy corridor and introduces new considerations for infrastructure reliability and cross-border coordination. The significance lies less in sweeping geopolitical claims than in the operational adjustments that both sides will need to make–from regulatory harmonization to contingency planning.
Gregory is an MSc candidate in Strategic Studies at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University. He works as a freelance writer specializing in international history, conflict, and counterterrorism, with experience in academia, investigative journalism, and voluntary uniformed service. He currently provides research assistance with the International Institute for Strategic Studies (IISS) under their Southeast Asian Security and Defence Internship Programme and conducts investigations on regional security and transnational crime for a confidential company.
Indonesia 🇮🇩
Common Growth, Captured Growth
by Rayhan Prabu Kusumo, in Jakarta
Indonesia’s Minister of Villages wants to stop issuing new licenses for chain minimarkets. Existing stores can stay, but no new ones. In their place, the government is building Red and White Village Cooperatives, which are state-backed village cooperatives whose profits flow partly into government coffers. The minimarket chains are just the newest entry on a growing list of private enterprises the state has decided to crowd out.
Over the past year, the Prabowo administration has assembled a governing philosophy built on the premise that private enterprise is inherently extractive and that the state, by stepping in, serves the public interest. The Forest Area Enforcement Taskforce seized over four million hectares of plantations and transferred them to Agrinas Palma, a previously obscure state-owned enterprise which is now the world’s largest palm oil company by area.
The Martabe gold mine had its license revoked before being walked back to ‘under investigation’ after international investors raised alarms. Perminas, a newly created state-owned enterprise designed to do for mining what Agrinas did for palm oil, is still waiting at the other end of that investigation. In Morowali, the IMIP airport controversy gave the defense establishment a platform to assert dominance over a private industrial enclave. Together they describe a pattern.
This is not ad hoc policymaking. The pattern shows that it is a coherent, if unspoken, ideology taking shape across sectors. The ideology that private capital is inherently suspect, that the state is the rightful custodian of productive assets, and that concentrating economic control under politically managed entities constitutes justice.
This assumption deserves scrutiny. Each replacement institution shares the same structural feature: political dependence. None operates with independent governance, separate funding streams, or accountability to the people they claim to serve. “Reform” is doing heavy lifting to describe what is functionally a transfer of economic power from private actors to entities that political elites can staff and exploit.
The cost runs deeper than the headline numbers, though those are damning enough on their own. MSCI’s warning that Indonesia could be downgraded from emerging to frontier market status wiped $80 billion off the Jakarta Composite in two days. Moody’s followed by revising the sovereign outlook to negative, citing weakening policy predictability.
The less visible damage matters more. When profitable private sectors are treated as territory to reclaim, the signal to capital is unambiguous: contracts are conditional, and success invites displacement. The state is methodically destroying the incentive to build anything it might later want to take. No cooperative or state-owned enterprises has ever replicated what that incentive produces, because efficiency under competitive pressure, capital deployment disciplined by the risk of loss, and growth that compounds without a committee directing it are things only the market generates on its own.
Indonesia accounts for roughly 40 percent of ASEAN’s GDP. If this is what ‘common growth’ looks like, its largest economy is not growing the pie but shrinking it, and handing the knife to the people who decided it needed cutting.
Rayhan has a background in government affairs and public policy, with experience across government institutions and advisory firms. His work focuses on the intersection of geopolitics, policy, and risk, with expertise in advocacy, regulatory analysis, and stakeholder engagement. He holds a degree in Government from Universitas Padjadjaran, and has completed an exchange at Universitat Pompeu Fabra in Spain, focusing on global politics and sustainability.
Editorial Deadline 28/02/2026 11:59 PM (UTC +8)
