In the Simmering Cauldron
Issue 53 — Key Developments Across Brunei, Indonesia, and Malaysia
Editor’s Note
by Siu Tzyy Wei, Lead Editor - Maritime Crescent Desk
This week, the cauldron of Southeast Asia simmers - the heat coming more from just the weather.
In Indonesia, the streets and markets reveal what happens when fiscal fuel runs low and public trust, once again, boils over. In Brunei, talks of an upcoming visit to Kazan shows how small states must balance carefully amidst larger flames of great power rivalry. In Malaysia, the return of El Niño reminds us that climate itself is a change that tests resilience across food, water and health.
Together, these stories capture a region living at the boil. Diplomacy, economics and climate each add their own heat to the cauldron, and survival depends on how long the pot can be kept from spilling over.
Indonesia 🇮🇩
Running the Country on Empty?
by Rayhan Prabu Kusumo, in Jakarta
On June 12, after Friday prayers, around 1,500 students marched toward Bundaran HI behind a line of six thousand police. Their demands read like a list: bring fuel prices down, stop wasting the budget, roll back the costly flagship programs, pull the military back out of civilian institutions, and have the President acknowledge that his government has been making mistakes. It is tempting to treat these as five complaints, but they are closer to five symptoms of one thing.
The protest landed at the end of a bruising few months for the economy. The rupiah had been weakening since early in the year. Global oil prices were part of it, but the heavier pressure was sustained capital flight. Foreign investors had pulled a cumulative $3.36 billion from the Jakarta stock exchange by mid-year, and the Jakarta Composite Index was down more than 30% from its historical peak, the worst-performing equity index in the world for 2026. In the government securities market, foreigners booked net sales of Rp 15.43 trillion between the end of 2025 and May 2026, against net purchases of Rp 49.62 trillion in the same months a year earlier. The money was leaving on a judgment about where the budget was headed.
Against that, Pertamina raised non-subsidised Pertamax by more than 32%, announced in the middle of the night with no prior public warning, and the cost fell on the middle class that relies on it. A government with little room left moves in large steps like this one, because the room had been spent before the shock arrived.
The pressure in the markets traces back to a way of spending. Free meals, the Red-and-White village cooperatives, and the other flagships were each launched fast and large, ahead of the institutions meant to run them. Whatever the programs deliver, the commitment is fixed and the bill returns every year. That is the line foreign investors have been reading. Pulling their money out of Jakarta was a judgment on a government that keeps adding permanent costs faster than it builds the capacity to carry them.
The same spending pattern is what brings people into the street. The demonstrations have recurred since Prabowo took office in late 2024, against VAT increases, education cuts, parliamentary housing allowances, and the military’s creep into civilian institutions. What connects them is a steady loss of trust as the people no longer believe the government is working in their interest.
The rupiah has recovered from its all time low and the street has quieted, which is a real if narrow opening. It is not worth much spent on patching a single program, because the problem is the habit of committing to large, permanent programs before the capacity to run them exists. Investors across the region are reading the fiscal line, and the public stopped believing the press releases some time ago.
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.
Brunei Darussalam 🇧🇳
The Road to Kazan
by Wira Gregory Ejau, in Bandar Seri Begawan
Between June 17-18, ASEAN leaders will travel to Kazan for the bloc’s first in-person summit with Russia since Sochi in 2016. Only a week ago, the Russian Embassy in Bandar Seri Begawan held its annual Russia Day reception on the 7th of June, a modest diplomatic occasion that, perhaps, precedes something considerably larger. Brunei will be among the ASEAN leaders invited by Vladimir Putin to attend the ASEAN-Russia Commemorative Summit in Kazan, marking 35 years of dialogue relations.
The visit to Kazan is an expression of ASEAN’s longstanding practice of maintaining dialogue with all major powers, independent of their conduct in other theatres. Brunei, as the current ASEAN-EU Dialogue Relations Coordinator for the 2024-2027 term, has spent the past several months at the institutional centre of Europe’s deepening engagement with Southeast Asia, such as hosting the 25th ASEAN-EU Ministerial Meeting in April, facilitating Germany’s bid for ASEAN Sectoral Dialogue Partnership, and stewarding a relationship that both sides are building toward its 50th anniversary in 2027.
During the outbreak of the Russo-Ukrainian war in 2024, Brunei maintained a steadfast adherence to the doctrine of constructive neutrality. Notwithstanding the complexities of the current international legal landscape, Brunei expressed concern over the escalation of tensions and military actions in Ukraine without naming Russia explicitly. Maintaining this position while sending a head of state to meet Putin in person, on Russian soil, three years into that war, exemplifies engagement without endorsement, access without alignment.
What makes Kazan substantively interesting is the agenda Russia has brought to it: a successor Comprehensive Plan of Action for 2026-2030, a 10-year Strategic Program on Trade and Investment, and frameworks for alternative financial infrastructure designed in part to route around Western sanctions. These reflect Russia’s active courtship of the Global South as a structural response to Western economic pressure, and ASEAN’s collective presence at Kazan, Brunei’s included, lends that courtship a degree of multilateral legitimacy that Moscow has few other means of securing.
Whether Brunei translates summit attendance into deeper bilateral economic engagement with Russia is a separate question, and the existing bilateral relationship offers little basis for projecting significant expansion. What the Kazan visit does confirm is that Brunei’s diplomatic posture remains as multi-faceted as ever, as a practised reality that holds even when the vectors point in conspicuously different directions.
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.
Malaysia 🇲🇾
The Return of El Niño
by Muhammad Aiman Bin Roszaimi, in Cyberjaya
For Malaysia, El Niño is often associated with hotter days and water shortages. Yet the return of El Niño in 2026 represents a far more significant challenge. It is not merely a weather phenomenon but a national stress test that could expose vulnerabilities across Malaysia’s food security, water management, public health and economic resilience.
According to forecasts by the Malaysian Meteorological Department (MetMalaysia), El Niño conditions are expected to develop from mid-2026 and could persist until early 2027. Government agencies have warned that several states may experience rainfall reductions of between 40 and 60 per cent, accompanied by prolonged periods of hot and dry weather.
The most immediate concern is water security. Malaysia has experienced water disruptions during previous El Niño episodes, particularly when reservoir levels declined due to prolonged dry spells. Reduced rainfall can place pressure on dams, rivers and groundwater supplies, especially in urban areas with high demand and regions already facing infrastructure constraints. Recognising these risks, the government has begun preparations, including cloud-seeding operations, monitoring reservoir levels and identifying alternative groundwater sources.
Agriculture is likely to face even greater challenges. The Economy Ministry has warned that crop yields could decline by between 8 and 10 per cent as higher temperatures and reduced rainfall affect farming activities. Rice cultivation, fruits, vegetables and commodity crops such as palm oil could all experience productivity losses. Such disruptions would not only affect farmers’ incomes but could also contribute to higher food prices, adding pressure to households already coping with rising living costs.
The economic implications extend beyond agriculture. Reduced water availability can affect industrial production, while higher temperatures increase electricity demand as households and businesses rely more heavily on cooling systems. The government has already noted that El Niño could exacerbate existing economic pressures linked to global energy market uncertainties. In a worst-case scenario, simultaneous disruptions to food, water, and energy systems could create inflationary pressures that ripple across the broader economy.
Public health is another area of concern. El Niño can contribute to heat-related illnesses, haze events, and school closures. From 2015 to 2016, temperatures exceeding 37°C led to the closure of hundreds of schools in Northern Peninsular Malaysia. As climate change amplifies the intensity of extreme weather events, future heatwaves may become even more disruptive.
Malaysia’s response should not be limited to emergency measures, as the larger challenge lies in building long-term climate resilience. This includes investing in water infrastructure, improving agricultural adaptation through drought-resistant crops, strengthening early warning systems, and integrating climate risks into national economic planning. The government’s current whole-of-government approach involving NADMA, MetMalaysia, the Health Ministry and state authorities is a positive step, but sustained coordination will be crucial.
Ultimately, El Niño is a jarring reminder that climate-related risks are becoming increasingly intertwined with national security, economic stability, and societal well-being. The question is no longer whether Malaysia will experience the effects of El Niño, but whether it can transform recurring climate shocks into an opportunity to strengthen its resilience for the future.
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.
Editorial Deadline 13/06/2026 11:59 PM (UTC +8)
