Southeast Asia: Navigating a New Geopolitical Environment

Contrasting Investment Dynamics in ASEAN

Hans Vriens began by highlighting the inconsistency of investment flows within ASEAN. Some countries clearly stand out. Malaysia, for example, attracts diverse and fast-growing foreign direct investments (FDI), while Singapore remains the top destination for capital in the region. However, both countries are in direct competition, especially due to significant cost differentials, with Malaysia offering much more competitive conditions.

Meanwhile, Vietnam continues to record particularly high levels of FDI, especially in the industry and construction sectors. In contrast, Thailand is going through a more difficult period, marked by persistent political instability and significant energetic vulnerability, which has already led to a notable increase in energy prices.

A Geopolitical Shock with lasting repercussions

The outbreak of the war in Iran has deeply disrupted global energy balances. The Arabian Peninsula, a key oil supplier for Southeast Asia, is now facing supply difficulties. According to Hans Vriens, the conflict could be prolonged, with no guarantee of stabilization, even in the event of a favorable outcome for the United States.

In this context, ASEAN countries are forced to rethink their energy strategies. Vietnam is among the economies most exposed to these disruptions.

Vietnam: Between Energetic Vulnerability and Swift Adjustments

Samuel Pursch highlighted Vietnam’s main weakness: its strong dependence on oil imports, mainly from the Middle East. This dependence contrasts with a political stability considered superior to that of some neighbors, such as Thailand.

Given the crisis, fuel prices have fluctuated significantly, with an initial 52% increase, before stabilizing around 30%. Initially, authorities mobilized the oil price stabilization fund, without lasting success. Ultimately, reducing environmental taxes on gasoline helped contain inflation.

While the government appears relatively confident in the short term, especially until the end of April, the outlook for May and June remains uncertain. In this context, China is gradually emerging as a key energy partner, with multiple diplomatic initiatives to strengthen its position in the region.

The aviation sector appears among the most vulnerable, with some companies already having to reduce their number of flights.

Furthermore, the increase in diesel costs poses a direct risk to the construction sector, a pillar of Vietnamese economic growth alongside the industry. Prolonged price pressure could lead to the suspension of numerous infrastructure projects.

A New Government Facing Economic Challenges

In addition to energy issues, speakers also discussed recent political developments in Vietnam. The new National Assembly stands out for a generational renewal: a majority of its members were born after 1970, with less exposure to Soviet influence and a more pronounced international openness.

The profile of decision-makers is also evolving. Technocrats (lawyers, doctors, senior officials, and private sector actors) now hold a more prominent place, at the expense of historical party figures. This transformation could favor a more pragmatic approach to economic challenges.

The new political landscape revolves around key figures for the 2026-2031 mandate. Trong, the Party’s general secretary, was recently elected president, consolidating his influence. While the role remains largely ceremonial, it retains strong symbolic and diplomatic value.

The Prime Minister, Hưng, also embodies this new generation. Educated in Japan and influenced by a more liberal economic approach, he previously led the Central Bank from 2016 to 2020.

However, Samuel Pursch warned against possible economic overzealousness. According to him, prioritizing a 10% growth target could accentuate inflationary pressures in a context already weakened by global energy tensions.