Global Risk Indexes (28-01-2025)

Global 96 (0 —)
MENA 95 (+1 ▲)
APAC 96 ( —)
Europe 98 (+1 ▲)
Africa 97 (+1 ▲)
AMERs 95 (-1 ▼)
Markets 96 (-1 ▼)
Mei Ling, Asia Pacific region analyst at Worldwise Analytica

Mei Ling

Empowering minds, shaping decisions: Insights from the heart of geopolitics

Asia-Pacific Grapples with Economic Turmoil, Governance Shifts, and Strategic Tensions Amid Global Uncertainty

The Asia-Pacific continues to navigate an intricate web of economic, governance, and strategic pressures, as regional players confront challenges exacerbated by global volatility and domestic complexities.

South Korea's Political Paralysis and Economic Vulnerabilities: South Korea's deepening governance crisis, marked by President Yoon Suk Yeol's impeachment and indictment, is eroding institutional credibility and economic stability. This political upheaval, coupled with sluggish GDP growth, undermines Seoul's ability to lead in regional security frameworks. As the crisis persists, the risk of prolonged economic stagnation and diminished geopolitical influence grows, demanding urgent domestic reforms.

China's Economic Adjustments and AI Disruption: The reshuffle in Vanke's leadership underscores Beijing's increasing reliance on state intervention to stabilize its struggling property sector. The crisis reveals systemic vulnerabilities, with potential ripple effects across China's economy and the broader region. Simultaneously, the rise of DeepSeek's cost-effective AI model highlights China's disruptive potential in the global tech landscape, challenging entrenched players and signaling Beijing's ambitions in the strategic AI race.

Philippines-China South China Sea Tensions Escalate: The harassment of Philippine vessels by Chinese coast guard forces in disputed waters exemplifies Beijing's assertive stance on territorial claims. Manila's suspension of maritime surveys underscores the persistent risks of escalation in the South China Sea. The Philippines' alignment with U.S. security policies adds another layer of complexity, as regional players grapple with the implications of heightened militarization.

Indonesia's Governance Under Prabowo Faces Scrutiny: President Prabowo Subianto's reliance on the military for civilian roles raises concerns about democratic backsliding and the erosion of institutional checks and balances. His flagship projects, including the free school meals initiative, showcase his ambition but also underline the risks of militarization in governance. This trend could centralize power further, threatening Indonesia's democratic progress.

India's Strategic Maneuvering in U.S. Relations: The call between President Trump and Prime Minister Modi reflects Washington's emphasis on fair trade and defense cooperation, particularly amidst India's growing trade surplus with the U.S. While Modi's warm rapport with Trump signals potential alignment, the pressure to reduce the surplus and address migration concerns underscores the challenges in navigating bilateral ties.

Regional Economic Adjustments and Social Challenges: Thailand's 20% drop in car production in 2024 highlights the impact of global competition, high household debt, and geopolitical shifts. Meanwhile, Australia's Labor government faces declining approval ratings as inflationary pressures and social discontent persist. These developments reveal the broader economic recalibrations and governance challenges affecting regional stability.

Bangladesh's Railway Strike Reflects Broader Governance Issues: The nationwide strike over pension and overtime benefits highlights systemic governance failures and labor unrest. This disruption underscores the challenges facing Bangladesh's interim government as it seeks to balance economic reforms with social stability.

As the Asia-Pacific grapples with these intersecting challenges, the region's ability to navigate geopolitical rivalries, foster economic resilience, and maintain governance integrity will determine its trajectory in the face of mounting uncertainty.

Geopolitical Risk Assessment for the Asia Pacific
(28-01-2025)

The Asia-Pacific faces growing challenges in governance, economic restructuring, and strategic competition, amplified by a volatile global environment. Multilateral coordination and strong domestic policies are imperative to mitigate the cascading risks threatening regional stability.

Geopolitical Risk Index

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