Stronger Ringgit, Stronger ASEAN
Issue 16 — Key Developments Across Brunei, Indonesia, and Malaysia
Editor’s Note
by Haniva Sekar Deanty, Lead Editor - Maritime Crescent Desk
Southeast Asia continues to wrestle with change on multiple fronts: economic, digital, and environmental. This week of Maritime Crescent explores how resilience is being challenged across Malaysia, Indonesia, Brunei.
Across the border, Malaysia’s currency rebound offers a different type of resilience—economic rather than environmental. After years of pressure, the ringgit’s recovery against the US dollar signals renewed confidence and the strength of domestic fundamentals. As Malaysia chairs ASEAN this year, the ringgit’s rebound is more than a financial story, it is also a political; one that reinforces the country’s leadership role in shaping regional economic initiatives.
Indonesia, meanwhile, faces a paradox of ambition and limitation. On one hand, it dominates ASEAN’s digital economy and champions the regional push for a unified digital framework. On the other hand, weaknesses at home risk undermining Jakarta’s credibility. Indonesia’s challenge is stark: can it lead ASEAN’s digital future while still struggling to fix its own digital foundations
Brunei’s recent experience with heavier-than-usual monsoon rains underscores the growing urgency of climate preparedness, prompting closer cooperation with ASEAN’s disaster-management networks. The lesson here is clear: resilience is no longer optional, even for smaller states. It must be collective, coordinated and continuous.
Together, these stories show how resilience in Southeast Asia is being tested in many forms. Whether through climate adaptation, financial stability, or digital transformation, the region’s ability to endure and adapt will define its role in the world for years to come.
Malaysia 🇲🇾
The Ringgit’s Rise Could Be a Sign of Hope, Signaling ASEAN Resilience
by Edrina Lisa Ozaidi, in WP Kuala Lumpur
The Malaysian ringgit recently demonstrated an apparent appreciation against the US dollar, signaling growth for the nation and, perhaps, for the region as well. Combining the currency strength and domestic fundamentals, as well as shifting global economic expectation, this serves as a perfect opportunity to test the resilience of the southeast Asia region.
For the past two years, the ringgit has been constantly under pressure. The recent rebound finally signals that Malaysia's economic foundation is still sound. Contributing factor? It could suggest that Malaysia’s domestic manufacturing base remains robust, that the recent expansion of its semiconductor industry is contributing to growth, or that the country has been benefiting from a steady inflow of foreign direct investment. Analysts attribute the ringgit's recent performance is due to the market growth and improvements, and the reduction in the nation’s risk premium. This has thus improved investors’ confidence and attracted more foreign portfolios to support the currency’s growth.
The ringgit’s rebound does not come without challenges. A stronger currency does turn the outlook of exported goods more expensive and less competitive in international markets. For a country with a diverse economy like Malaysia, for example, it could be a double-edged sword. It will definitely affect export-oriented industries; however, a stronger ringgit does lower the cost of imported goods, dampening inflation while benefiting consumers.
The message that the currency growth sends beyond the borders sets a good message for ASEAN members and neighbouring countries. While Malaysia holds the ASEAN chairmanship for the year, the growth underscores Malaysia’s leadership within the regional grouping. This also sends a message that Malaysia is a stable, adaptive and strategic player in the market, and not a passive one that is easily rattled by geopolitical tensions.
With Malaysia leading the charge on a few economic initiatives, including the finalisation of the ASEAN Digital Economic Framework Agreement (DEFA) and promoting a Green Investment Strategy, the ringgit performance could potentially project confidence and gravitas to a forward-looking and resilient economic agenda for the entire region. These initiatives are designed to accelerate trade growth, strengthen interoperability, and ensure that the benefits of regional integration are shared equitably across all member states, with particular inclusion of women, youth, and micro, small, and medium enterprises (MSMEs).
The role of Malaysia is vital in ASEAN. As a key driver in Southeast Asia—alongside Indonesia and Singapore—Malaysia’s leadership can influence regional policies, particularly regarding the ASEAN Economic Community. A stable and stronger ringgit reinforces the idea that pragmatic and resilient economies in ASEAN can withstand external shocks, from trade wars to global policy shifts. Ultimately, the ringgit’s recent appreciation is a quiet yet significant marker, signaling that Malaysia—and by extension, ASEAN—has the capacity to not only endure but emerge stronger from global headwinds.
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.
Indonesia 🇮🇩
Can You Lead a Revolution You Can't Join? Indonesia's Digital Paradox
by Hree Putri Samudra, in Jakarta
Indonesia's digital leadership within ASEAN is at risk from a core conflict: the country's ambitions for the region go beyond what is happening at home. Whereas Jakarta is going on as if it is driving the ASEAN digital economy—worth one trillion US dollars—the inconsistency of its internal structure revealed the failure of its aspiration.
The initial numbers are compelling. This country leads 40% of ASEAN's digital economy despite contributing only 36% of the regional GDP. Its projected US$366 billion contribution to ASEAN's 2030 digital economy goal puts all regional rivals far behind. Indonesia’s re-election as the shepherd for the ASEAN Digital Senior Officials' Meeting for 2026-2028, combined with its role in advancing the Digital Economy Framework Agreement (DEFA), reflects unambiguous hegemonic ambition.
Indonesia's digital infrastructure issues are not only about the availability of the internet. The country's digital literacy index is 3.54 out of 5.0, putting it third regionally behind Singapore and Thailand. However, this 71% score masks significant rural-urban disparities. Over 61% of youth between 10 to 24 years old do not gain digital skills at school. The country's average internet speed is ten times slower than Singapore and only slightly faster than Cambodia's. Officials acknowledge the infrastructure weaknesses, saying it provides "capacity-building programs", not state-of-the-art technology in DEFA implementation.
The strategic challenge is deep. Indonesia’s digital hegemony strategy relies on being the regional center for cross-border data, AI regulation, and digital infrastructure coordination. Nevertheless, Jakarta depends on foreign partners. While some ASEAN members cited "lack of readiness" in enforcing DEFA, Indonesia rejected this, offering capacity-building programs instead of technical leadership, thus acting as a facilitator rather than technological leader.
These weaknesses create geopolitical risks. Indonesia's leadership is founded on soft power through multilateral institutions, but internal flaws undermine sovereign power. The recent cyber-attack that paralyzed 210 offices of the national data center revealed vulnerabilities. Jakarta's digital aspirations appear wishful once it has gone digital due to the quantum leap of Singapore’s 211 Mbps against Indonesia’s 22 Mbps. Its gap in filing patent applications compared to countries like Singapore also exposes Jakarta’s flaw: pushing DEFA while lagging in homegrown technology builds a digital economy reliant on foreign innovation, institutionalizing dependency.
It raises a critical question: Is this top-heavy boom sustainable? Indonesia’s digital economy expanded 414% between 2017-2021, far outstripping the physical economy’s growth of 17%. The result is a fragile, two-tiered economy. A small elite integrates into regional value chains, while the majority remains on the margins.
Jakarta faces a dilemma: pursue digital dominance through institution-building over developing domestic capacity, or improve infrastructure before regional expansion. It seems to favor the former, with short-term diplomatic gains but long-term strategic costs.
Indonesia’s sovereignty approach assumes technological gaps can be addressed through administration. While ASEAN consensus tradition may coat these contradictions in wool for a while, as DEFA deepens, Indonesia's infrastructure gaps will be harder to hide. Jakarta risks leading a digital revolution it could not fully partake in—a shallow hegemony built on institutionality, and not technological prowess.
Real leadership is more than just diplomacy; it means showing ASEAN the digital future.
Haniva is a policy analyst and researcher specializing in international security and regional affairs. She holds a Master’s in International Relations from King’s College London and works with the Centre for International Security and Economic Strategy (CISES) as well as the King’s Policy Research Centre. Her work focuses on maritime security, ASEAN’s strategic role, and the Indo-Pacific’s evolving dynamics.
Brunei Darussalam 🇧🇳
Brunei’s Monsoon Test Highlights ASEAN Climate Resilience
by Syimah Johari, in Bandar Seri Begawan
Brunei has recently faced heavy rainfall warnings during the Southwest Monsoon season, with monthly levels reaching 290mm to over 340mm – figures higher than average and raising concerns on flooding risks, especially in the riverbanks and low-lying areas. While Brunei has invested in improved early warning systems and flood-mitigation infrastructure, these challenges mirror those faced in Southeast Asia, particularly Indonesia and Malaysia. With the ASEAN Specialised Meteorological Centre (ASMC) flagging Brunei among the states experiencing high rainfall, the country’s response underscores how national preparedness must be aligned with ASEAN’s broader frameworks for disaster management and climate resilience.
Brunei’s heavy rainfall is not unusual during this particular season but there has been a change to the volume and the intensity of the rain. As a result, the country faced potential risks of landslides, fallen trees and roofs due to the extreme weather – prompting greater awareness and preparedness. This monsoon is affecting not only Brunei but also the wider Southeast Asian region, as shown by the recent flooding in Bali and Sabah. With climate change intensifying, the growing unpredictability of monsoon seasons poses new challenges for disaster preparedness and the protection of citizens across the region.
Brunei’s efforts in combating such situations have been effective so far, with the Brunei Meteorological Department (BDMD) investing in modern technology to strengthen its early weather warning system by using a color-coded system to indicate risk levels. This is also made accessible to citizens through Brunei WX, an application developed by BDMD to ensure that citizens are to be provided with fast and accurate information. At the recent Legislative Council meeting, the Minister of Development, Yang Berhormat Dato Seri Setia Awang Haji Muhammad Juanda bin Haji Abdul Rashid, highlighted ongoing drainage and detention-pond projects that have been effective in reducing flooding in vulnerable areas. This showcases that even smaller ASEAN states, like Brunei must prepare for climate resilience.
The ASMC has flagged up areas that are experiencing extreme weather conditions, allowing members to share information, forecasts and best practices with one another for the past few weeks. Similarly, the ASEAN Coordinating Centre for Humanitarian Assistance on Disaster Management (AHA Centre) focuses on coordinating emergency responses and preparedness across member states, actively issuing public notifications on flood-affected areas in Indonesia and Malaysia.
Brunei’s experience reminds us that resilience is built collectively. Even as a smaller state, Brunei demonstrates that size does not limit contribution; rather, every member’s investment in planning, forecasting, and mitigation plays a vital role in strengthening the region’s collective resilience in the face of a changing climate.
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.
Editorial Deadline 21/09/2025 11:59 PM (UTC +8)
