Looks Calm, Doesn't It?
Issue 34 — Key Developments Across Brunei, Indonesia, and Malaysia
Editor’s Note
by Haniva Sekar Deanty, Lead Editor - Maritime Crescent Desk
Indonesia’s recent market downturn highlights how quickly confidence can unravel when questions arise over governance, transparency and regulatory credibility. This week, Hree P. Samudra examines how long-standing structural issues turned a technical concern into a systemic shock.
Syimah Johari looks at how Brunei’s declining inflation rate presents an example of the gap between economic statistics and everyday experience. While headline figures suggest easing pressure, many households continue to feel the strain of rising living costs.
As Malaysia steered ASEAN in 2025, some of its most consequential work unfolded beyond traditional diplomacy as our Malaysian correspondent, Edrina Lisa, focuses on regional payment connectivity as a form of quiet but strategic statecraft, examining how initiatives like cross-border instant payments enhance resilience, reduce external dependence and reshape regional integration. In a fragmented global economy, technical infrastructure is emerging as a new frontier of sovereignty and influence.
Indonesia 🇮🇩
Indonesia's Capital Market and the Tragedy of Trust
by Hree Putri Samudra, in Jakarta
In a single trading day, Indonesia’s stock market recorded one of its steepest declines since the late 1990s Asian financial crisis. Roughly eighty billion dollars in market value evaporated as foreign investors moved rapidly to reduce their exposure. MSCI froze Indonesian index rebalancing, citing unreliable free float data and transparency concerns. Foreign brokers warn that if Indonesia is downgraded from emerging to frontier status, it risks a permanently smaller investor base and higher cost of equity, reducing its attractiveness to global institutional investors.
This situation did not emerge overnight. For years, a significant number of Indonesian listed companies have been controlled by family groups and conglomerates with tightly concentrated ownership and limited shares genuinely available to the market. Data provided by the Indonesia Stock Exchange and the central securities depository have increasingly been viewed as too coarse to allow investors to identify ultimate beneficial ownership with confidence. In an era where capital flows are guided by detailed and verifiable information, that lack of clarity has become a material risk rather than a technical shortcoming.
The consequences came in sequence. MSCI halted rebalancing and held back from increasing Indonesia’s weight. Foreign funds began to cut exposure. The Jakarta Composite Index plunged about 7 to 8 percent on 28 January, triggering a trading halt and marking the worst drop since 1998. Panic peaked when the OJK chair and the CEO of the Indonesia Stock Exchange resigned within days, deepening market fears.
According to analyst Hendra Wardana of Republik Investor, foreign investors rely on stability and continuity in regulatory leadership as a foundation for assessing risk. When an entire top tier of regulators resigns almost simultaneously in the middle of a crisis, investors read it not as moral responsibility but as institutional stress and a sign that the guardians themselves have lost confidence.
Focusing only on free float minimums risks missing the larger point. The episode is a governance wake up call. Indonesia’s regulatory framework has been adequate for a domestically oriented market but not for a global market that depends on high quality ownership data, consistent disclosure and credible oversight. For years, Indonesia’s market institutions have worn two hats, acting both as promoters of new listings and as referees for disclosure and enforcement. In a stress episode like this, it raises a deeper question for investors about whether the referee is willing to blow the whistle on the same companies it has been trying to attract to the exchange.
This shock also landed at a time when concerns were already rising over alarger fiscal deficit, rupiah weakness and questions about central bank independence, all of which feed into a higher risk premium for the country. For global investors comparing options across Asia, governance is increasingly the main differentiator, which is why markets such as India and Vietnam have been able to attract fresh mandates even as concerns around Indonesia’s data quality and regulatory independence have grown.
Hree serves as Project Associate for Asia and the Pacific at the Global Network of Women Peacebuilders (GNWP), where she leads multi-country initiatives integrating Women, Peace and Security (WPS), and Youth, Peace and Security (YPS) frameworks into security policies across ASEAN and South Asia. She is also a Non-Resident Fellow at the University of Glasgow’s Atomic Anxiety in the New Nuclear Age program. Previously, she served as Chair of the Humanitarian Disarmament and Inclusive Governance Working Group at the British American Security Information Council (BASIC), advocating for more accountable and inclusive nuclear policy frameworks.
Brunei Darussalam 🇧🇳
What the Numbers Really Mean for You
by Syimah Johari, in Bandar Seri Begawan
In 2025, Brunei recorded a 0.3 per cent decrease in its inflation rate – a figure that appears reassuring at first glance. However, a lower inflation doesn’t necessarily mean that prices have fallen; it simply indicates that prices are rising more slowly. For many households in Brunei, this distinction isn’t always clear, especially when economic updates are communicated using technical language. As a result, official figures may not fully reflect lived experiences, highlighting the importance of clearer and more accessible economic communication.
Inflation refers to how prices change over time. The recent decline in Brunei’s inflation rate was driven largely by lower transport costs and selected price adjustments in certain goods and services. This suggests that overall price levels have remained relatively stable, rather than indicating a broad reduction in price. Consequently, many households may continue to feel the pressure despite reports of easing inflation.
Inflation figures are calculated by averaging price changes across multiple categories such as food, housing, transport, and education. While this provides a useful overall measure, it doesn’t reflect individual spending patterns. Even as transport costs fall, households continue to spend heavily on food, utilities, daily necessities – many of which have not gotten any cheaper. Brunei’s reliance on imported food further exposes prices to global factors, including geopolitical tensions and supply chain disruptions. Although price increases in everyday items may appear small, they accumulate over time, particularly affecting households with tighter budgets and incomes that don’t rise at the same pace as expenses.
This disconnect between lived experiences and official statistics is not unique to Brunei. Across Southeast Asia, easing inflation rates have been reported alongside persistent cost-of-living pressures. Heavy reliance on imports, international prices change and supply delays have shaped similar experiences throughout the region.
Beyond economic data itself lies a communication challenge. Economic reporting often relies on technical terminology that assumes a level of financial literacy many citizens may not possess, leaving official statistics disconnected from everyday realities. Articles with heavy economic jargon are often difficult to interpret, even for academically trained readers, which limits accessibility for a broader audience.
In 2023, it was reported that only 30 per cent of Southeast Asian people are financially literate, underscoring the importance of clearer economic communication. Rather than relying solely on numbers and indexes, economic updates should help the public understand how prices and daily costs are changing. Doing so would enable households to plan their spending more effectively, anticipate rising costs, and engage meaningfully with national and regional economic trends.
Ultimately, inflation figures are more than just economic indicators, they shape how households experience daily life. While a decrease in the inflation rate may suggest economic stability, its meaning is easily lost when communicated through technical language alone. For economic updates to be truly effective, they must move beyond numbers and speak to everyday realities. Clearer and more accessible communication would allow the public to better understand not just what is changing, but why it matters – enabling individuals to make more informed decisions in the face of evolving economic conditions.
Syimah is a graduate of King’s College London with a BA in International Relations. With a strong focus on diplomacy, regional cooperation, and development policy, she is passionate about contributing to meaningful change through public service. Currently, she is involved in poverty alleviation work through a local NGO.
Malaysia 🇲🇾
Building ASEAN’s Shield Against Global Trade Shocks
by Edrina Lisa Ozaidi, in WP Kuala Lumpur
While Malaysia navigated its 2025 ASEAN Chairmanship, a good project unfolds helping the shift of the region. Surprising not in a diplomatic way, but through the digital pipes of financial infrastructure. With the aim to connect more countries in one regional payment connectivity, the project helps create functional sovereignty, establishing the technical independence needed to survive a volatile multipolar world.
Past decades have shown us time and time again that Southeast Asian trade was always tethered to the US Dollar. This causes countries in Southeast Asia to be vulnerable to the spillover effect from the US Federal Reserve policy.
For example, the recent trade war imposed by the US has pushed the need for financial resilience, prompting an initiative driven to provide a practical solution. Through initiatives like Project Nexus, Bank Negara Malaysia is connecting instant payment systems across borders. This project allows a local merchant in Malaysia to accept Thai Bath or Singaporean Dollars via QR code, effectively bypassing the traditional, US-intermediate SWIFT network.
The international relations concept of weaponised interdependence suggests that states controlling global financial hubs may use them as a form of political leverage. Building a “closed loop” regional payment system, Malaysia and the participating member countries are able to construct a defensive shield. This helps ensure that in times of uncertainties, especially in an era of increasing sanctions and trade wars, participating member countries can continue their economic activities uninterrupted, shielding them from geopolitical pressure.
Unlike the Eurozone, which demands deep commitments including a shared currency and central bank, Malaysia is taking a bottom-up approach to regionalism. It aims to create a virtual single-path and currency experience for consumers and SMEs, without requiring a politically unfeasible treaty. This strategy allows member countries to pursue deeper economic integration while preserving national fiscal autonomy.
For now, technical diplomacy may include setting standards for how regional QR codes communicate, though promising developments may emerge in the future. This can also be viewed from the lens of regional soft power, securing strategic autonomy in an increasingly fractured and possibly volatile global landscape. One might wonder, what will be laid out in this year’s ASEAN meetings for technical diplomacy?
Edrina is a communications professional with a background in international relations. She holds a degree from the University of Nottingham Malaysia and has worked across public relations and social media for organizations in the development, education, and corporate sectors. Her work focuses on crafting narratives around regional affairs and strengthening media engagement across Southeast Asia.
Editorial Deadline 31/01/2026 11:59 PM (UTC +8)
