Asia Country Risk Ratings

Bangladesh (BGD)

Bangladesh remains in a fragile political transition following the collapse of the Awami League (AL) government in August 2024. Student-led anti-discrimination protests forced Sheikh Hasina Wajed from power, prompting the formation of an interim administration under Nobel laureate Muhammad Yunus, backed by senior technocrats, academics, and the military. While Yunus’s government has succeeded in restoring a measure of order, uncertainty remains high. The interim government completed one year in August but the parliament remains dissolved, mainstream parties excluded, and the military’s repeated extension of magistracy powers has entrenched its influence over civilian governance.

On August 5th, Yunus announced that the next general election will be held in February 2026, coinciding with the release of the July Proclamation, which provides constitutional recognition of the 2024 uprising and legal protection for its participants. Although the proclamation is a symbolic step toward normalisation, it has been criticised for its lack of transparency. Several smaller parties and student leaders were excluded from the drafting process, and the document controversially downplayed the AL’s role in Bangladesh’s independence. The move risks deepening polarisation rather than building inclusive consensus, raising doubts about the credibility of future reforms.

The question of Sheikh Hasina’s fate remains a combustible issue. In July, Bangladesh’s International Crimes Tribunal sentenced her in absentia to six months’ jail for contempt of court, intensifying calls for her extradition from India. The interim government faces growing domestic pressure—particularly from the National Citizen Party (NCP), which spearheaded the 2024 protests, and from the Bangladesh Nationalist Party (BNP)—to pursue Hasina’s return. Yet India, despite an extradition treaty, is unlikely to comply, citing political motivations and the risk of an unfair trial. This impasse will likely fuel partisanship at home, potentially prompting the interim government to harden its stance against AL members and supporters, at the cost of renewed sectarian tensions, particularly with the Hindu minority historically linked to the AL.

Institutionally, efforts to rebuild credibility continue, with reforms proposed by the Consensus Commission and changes at the central bank and judiciary. But entrenched corruption and slow bureaucracy blunt progress, and political reprisals remain likely. Investor sentiment remains weak, not only due to security risks from radical Islamist groups and sporadic violence but also because of persistent uncertainty around the transition timeline. In sum, Bangladesh is entering a prolonged phase of contested politics, characterised by a military-backed interim authority, partisan historical revisionism, and an uncertain electoral process. While Yunus’s cabinet has stabilised the near term, the underlying risks of polarisation, reprisals, and delayed elections remain high. We assess political risk as elevated through 2026 and beyond, with volatility likely to persist even under a future BNP-led government.

Cambodia (KHM)

Overall risk remains medium high for Cambodia. Political interference and legal & regulatory, however, have both remained at their retrospective scores of high and very high. Under the head of government, Hun Manet (PM), tension with its bordering neighbours Thailand had boiled over in July and escalated into armed clashes. The disputes between the two South Asian countries have existed for over a century, since the French occupation of Cambodia. However, soon after the initial disagreement, a ceasefire was declared between Cambodia and Thailand following peace talks. Talks had been influenced by U.S. President Donald Trump, as the ceasefire was seen as a pre-condition to both countries trade talks with Washington, highlighting tariff negotiations would not continue if peace was not seen between the bordering countries. Recently in August, ASEAN observers have reinforced the ceasefire between Cambodia and Thailand by inspecting the borders that saw conflict and ensure this dispute will not reincur. Political Violence remains volatile at medium high. The bordering conflict that led to exchanges of artillery and bombing runs, had led to the displacement of more than 300,000 people, with reports of at least43 deaths.

In terms of the economy, Cambodia continues to hold a strong GDP growth rate in south east Asia, the IMF for 2025 forecast a 4% rate of growth and expect a slight dip in 2026 to 3.4% before resuming higher rates after 2026. In Q2, Cambodia’s growth had become quite sensitive due to uncertainties with U.S.’s tariff rate, with a 36% rate that was planned for the 1st August. However, in early August a 19% tariff on Cambodian exports was agreed with the U.S., averting the possible disruption of the Cambodian garment market. This market is part of the large trade surplus that the South Eastern country has with the U.S., where exports to the U.S. , calculated by the Trade Map, has made up 37.4% of total exports in 2024. The risk of doing business remains at very high, with the inability of government to provide stimulus remaining at medium. Inflation is seen to seen as quite stable, sitting at a rate of 1% in 2025 according to the IMF, however a rise to 3.2% predicted for 2026. Cambodia imports a majority of its food and fuel, with possible high prices in the future effecting inflation fluctuations. The exchange transfer risk continues at medium low, as the Riel is still pegged to the USD. While banking sector vulnerability remains medium.

China (CHN)

China’s overall country risk score remains at medium, with the legal and regulatory risk remaining at medium high, and political interference at medium. Internationally, the key issue remains U.S./China relations, with a further 90-day extension of the trade truce until mid-November. The U.S. is trying to pressure China by reaching deals with other countries and isolating China, while also keeping the current 30% tariffs on imports from China. Nevertheless, a trade deal may not be seen before 2026, as China’s aim is to revamp the Phase 1 trade deal from 2020 and the U.S. wants major import commitments from China.  The other main focus in H2 2025 is the economy, particularly whether any additional fiscal stimulus is announced on top of the Yuan2.5trn fiscal spending seen in March.  Meanwhile, a significant escalation with Taiwan remains unlikely in the next 1-2 years, as China waits to see if they can benefit from U.S. President Trump’s impatience for a trade deal by asking Trump not to intervene in any future China military reunification of Taiwan. China military forces are also not strong enough yet for such a high-risk military operation, though China will keep up its gray-zone warfare with Taiwan, including large scale military exercises. Elsewhere, the exchange transfer risk remains at medium-high. A current account surplus, plus substantial FX reserves, helps to support this rating (China is also engaged in an ongoing multi-year diversification from U.S. Treasuries, including into gold). The inability to provide fiscal stimulus remains at medium. China has room for extra fiscal stimulation should lower growth raise the risk of a hard landing in 2025 or 2026, while the dominance of domestic investors means that China’s authorities can persuade investors to rollover and buy new debt. Banking sector vulnerability has moved from medium-high to a medium rating, despite worries about the long-term downturn in the residential property sector. Non-performing loans, primarily held by small and city banks, can be managed through potential takeovers by larger banks and local governments.

Hong Kong (HKG)

The overall risk in Hong Kong remains at a medium low level. Legal & regulatory risk and political interference both remain at a medium low level. The last active pro-democracy group, Hong Kong’s League of Social Democrats, disbanded due to political pressure from the national security crackdown, with prior expectation of disbandment being as late as next year. The introduction of the NSL (National Security Law) in 2020 and 2024 Article 23, has had legal boundaries tightened to where there is no opposition against the government and Beijing’s influence. For example, in June, three members were fined by the magistrates’ court for breaching the NSL, with other cases leading to pro-democracy campaigners being sentenced. China believes the implementation of such laws has brought security to Hong Kong and have rejected claims made by the U.S. regarding the security laws being used as a method of repression.

 In the matter of the economy, supply chain disruption in Hong Kong continues to have a low level of risk, with a current account balance of 11.4% of GDP in 2025 and forecasted to be 11% for 2026 by the IMF. Hong Kong therefore also has a strong connection for international business with a strong infrastructure, global connectivity and with a low-level risk of doing business. Hong Kong is also business friendly, with no foreign exchange controls, a free port status and beneficial tax policies. Further to this, the Hong Kong dollar remains pegged to the USD, thus creating a stable currency, beneficial for the economic drivers of trade and logistics. However, with the Hong Kong dollar continuing to be pegged to the USD, provides little to no scope for The Hong Kong Monetary Authority (HKMA) when it comes to easing the policy rate of 4.75%. The most likely alternatives would be to peg the Hong Kong dollar to a basket of currencies to minimize risk or the Chinese Yuan for political reasons, but this remains unlikely. The banking sector vulnerability remaining medium high, while exchange transfer remains at a medium low. Sovereign non-payment risk is at a medium risk level, despite government gross debt being 11.8% of GDP in 2025 and projected to be 14.3% in 2026. Although the property sector is getting less worse due to a recovering demand in China and Hong Kong, property prices continue on a downward trend. With the Property sector being a major source of revenue for the economy, this downturn in trend will slow the reduction in the  budget deficits.

 Indonesia (IDN)

Indonesia’s political stability outlook remains broadly steady, but the politics of austerity and military reach will keep tensions elevated through 2025. President Prabowo Subianto has pushed through sharp cuts to ministerial budgets—education among the highest‑profile—to free fiscal space for signature programmes. These retrenchments, alongside the March revision of the Armed Forces Law allowing active‑duty officers to take civilian posts, triggered campus‑led protests and criticism of democratic backsliding. At the same time, funding trims to predecessor Joko Widodo’s flagship projects—including the Nusantara new capital—signal a clear re‑prioritisation of the state’s agenda.

Power dynamics are fluid. Jokowi’s influence endures via his son and vice‑president, Gibran Rakabuming Raka, yet calls for Gibran’s impeachment and Prabowo’s warmer ties with the Indonesian Democratic Party of Struggle (PDI‑P) matriarch Megawati constrain the former president’s leverage. Gibran’s July assignment to oversee development in Papua could either sideline him politically or, if successful, deliver a significant dividend by stabilising a restive periphery—where security operations have already intensified and drawn human‑rights scrutiny.

Coalition arithmetic still favours the president but is less commanding than in the past. Prabowo’s bloc controls 348 of 575 House of Representatives (DPR) seats; the exclusion of PDI‑P (now the largest party with 110 seats) and NasDem creates a more credible opposition capable of slowing legislation. The cabinet spans all major Islamic parties and organisations, shoring up conservative support, and we expect Prabowo to complete his term to 2029. Even so, a smaller, looser coalition raises the risk of policy gridlock, and periodic street mobilisation.

Externally, Jakarta is hedging more assertively. Q2 2025 brought high‑ticket defence procurement and deeper ties with multiple suppliers (including Turkiye and South Korea), exploratory engagement with Russia, and continued outreach to Western partners. Foreign investment momentum wobbled—FDI fell and offshore borrowing was front‑loaded to buffer a choppier global backdrop—while proposed textbook revisions stirred debate over historical memory and accountability. Overall, we see political risk as moderate: baseline stability holds, but protest risk and institutional strain will persist as fiscal choices bite and military influence grows.

India (IND)

India’s political stability outlook for 2025 remains favourable, though the environment has become more contested since the 2024 election. Prime Minister Narendra Modi secured a third consecutive term at the head of a Bharatiya Janata Party-led (BJP) coalition, but with a reduced mandate that leaves the government more reliant on allies. The stronger showing of the opposition INDIA alliance has rebalanced parliament, providing meaningful checks on the government, and limiting its scope for sweeping constitutional or socially divisive reforms.

The administration continues to advance targeted welfare and fiscal measures. April 2025 brought changes to tax slabs, GST rules, wage levels, and regulated prices, aimed at easing household pressures while sustaining growth. Yet, we envisage fiscal strains will persist, especially as coalition management slows reform momentum in land, labour, and privatisation. The September vice-presidential election (following the former vice president Jagdeep Dhankhar’s resignation in July) is being closely watched, as it could influence the balance of power in the upper house and reveal shifting leadership dynamics within both government and opposition.

Social and religious polarisation has sharpened. The Waqf Amendment Act 2025, giving the state greater control over Muslim religious endowments, has sparked protests and legal challenges, deepening mistrust between communities. While the ruling party frames it as reform, opponents see it as an erosion of minority rights.

Externally, regional and global frictions are mounting. The June suspension of the Indus Waters Treaty marked a sharp deterioration in relations with Pakistan and heightened concerns over water security. U.S.–India relations have also soured after Washington imposed an additional 25% tariff on Indian goods in response to India’s continued Russian oil purchases, delaying trade talks and straining the broader strategic partnership. India, however, has indicated that it will prioritise domestic energy security and maintain strong trade ties with Russia. Security pressures remain elevated, particularly in Kashmir and border regions. The government’s launch of Operation Sindoor in mid-2025, a large-scale counterterror campaign in Jammu & Kashmir, underscored its resolve to suppress militancy after the April attack.

Institutions remain broadly robust, but governance will be more complex than in Modi’s previous terms. The government’s narrower mandate constrains its ability to deliver ambitious reforms, though labour changes are progressing with state support. India will continue to emphasise welfare for key groups, infrastructure investment, and a more assertive foreign and security policy. While polarisation, counterterror operations, and trade disputes add volatility, India’s institutional resilience, democratic checks, and economic prospects underpin a moderate-to-low political risk outlook through 2025, according to our risk ratings.

Myanmar (MMR)

Myanmar continues with a high overall country risk. Little change in Myanmar’s country risk is due to the ongoing civil war that had stemmed from the military coup in 2021, expelling the elected government. After four years of civil unrest, involving the conflict between the military and resistance groups, the military (Tatmadaw) has retained their control over a majority of Myanmar’s largest urban areas. However, at the cost of casualties, with reports from April 2025 that 6,486 civilians have been killed. In recent times Myanmar’s junta chief, Min Aung Hlaing, has ended the country’s state of emergency and is preparing an election for December. Although, the election is seen by Western governments to further establish the military’s power, opposing groups are either refusing to be involved or have been completely removed from the election. Political violence and political interference both remain high risk. ASEAN, the Southeast Asian bloc, have also urged that the projected election is not in the country’s best interest in the current climate, with the beliefs that peace commitments should be the Junta’s priority. Thus legal & regulatory risk continuing to be very high.

Ongoing conflict has also halted Myanmar’s GDP growth, with only a projected IMF rate of 1.9% in 2025 and 2.1% in 2026. Recent earthquakes have added to the economic pressure, directly damaging infrastructure and property from the 7.7 magnitude earthquake. Thus, supply chain disruption remains very high throughout the country. Inflation is an issue to Myanmar, with 30% rates being estimated by the IMF in 2025, although follow by a forecasted reduction to 20% in 2026. In terms of the relation between Myanmar and the U.S., Trump recently removed sanctions on allies of Myanmar’s military related firms and generals. Following this removal of sanctions, the Trump’s administration has been exploring the opportunity of accessing Myanmar’s rare earth minerals. However, in the past, two rare earth mining towns were seized by an ethnic group (Kachin Independence Organization) that oppose the Junta. As a result, the opposing organization demanded a greater role in taxing exports, leading to an overall deal with China. The risk of doing business remains high. Public debt according to the IMF is 62.6% of GDP during 2025, projected to steady in coming years with 62.5% in 2026. Myanmar’s currency, the Kyat, is down by 80% against the U.S. dollar ever since the coup had taken place in 2021. Therefore, both sovereign non-payment and exchange transfer risk stick at medium high.

Pakistan (PAK)

Political stability in Pakistan remains tenuous, shaped by the fragile coalition government led by the Pakistan Muslim League (Nawaz) (PML-N) and the Pakistan People’s Party (PPP), which took office in February 2024. The coalition, headed by Prime Minister Shehbaz Sharif and President Asif Ali Zardari, faces persistent legitimacy challenges as it implements unpopular IMF-mandated reforms. Pakistan’s history of governments failing to serve full terms underscores the fragility of the current administration and we feel a collapse of this government ahead of completing its term or as early as 2026 cannot be ruled out. Increased defence outlay further limits the ability of the government to provide stimulus, increasing social security risk.

The political landscape remains polarised. The opposition Pakistan Tehreek-e-Insaf (PTI), led by former prime minister Imran Khan, retains mass support despite being largely excluded from formal politics. Khan has been imprisoned since 2023 and, in January 2025, received a 14-year sentence on corruption charges. PTI supporters continue to stage frequent demonstrations, which risk turning violent but remain insufficient to unseat the government. The government has responded with legal crackdowns and additional cases against PTI figures, further entrenching authoritarian tendencies. Parliament’s passage of the 26th amendment, which gave itself the power to appoint the Chief Justice, has further weakened judicial independence and reinforced the drift toward military-backed authoritarian rule.

Despite ongoing protests, the civilian-military coalition has consolidated control of institutions, with little substantive progress in opposition–government dialogue. The military’s dominance, already formalised through the Special Investment Facilitation Council (SIFC), has deepened following clashes with India in May 2025, and remains central to keeping Khan out of power. While this provides a measure of regime stability, it heightens coup risk should rifts emerge between the civilian leadership and the armed forces.

Security remains volatile. In early 2025, Baloch separatists staged a train hijacking, while Islamist militancy, especially from Tehreek-e-Taliban Pakistan (TTP), continues to threaten stability. Renewed military operations against the Balochistan Liberation Army (BLA) and stepped-up counterterrorism efforts in Balochistan and against the TTP have highlighted the state’s heavy-handed approach. While these measures may suppress insurgent activity, they risk exacerbating grievances and raising concerns over civilian rights abuses. More recently, the U.S. has declared BLA as a terrorist outfit, following Asim Munir’s visit to the U.S. in August. We think growing ties between Munir and the U.S. also underscore a potential plot for a regime change in the future. 

Although IMF monitoring injects some external accountability into governance and fiscal reforms, substantive institutional reform is unlikely. With security challenges escalating, political repression increasing, and opposition forces sidelined, Pakistan faces a prolonged period of weak civilian governance under strong military tutelage. We assess political risk as high, with persistent instability, authoritarian drift, and social unrest shaping the outlook through 2029.

Philippines (PHL)

The Philippines enters the second half of 2025 navigating heightened political tensions, though overall stability remains intact. President Ferdinand Bongbong Marcos Jr is expected to complete his term through 2028, but the mixed outcome of the midterm elections in May has deepened rivalries between the Marcos camp and supporters of his predecessor, Rodrigo Duterte. The administration retains a working majority, yet discord within the ruling coalition is a more serious threat to stability than opposition forces. In particular, Rodrigo Duterte’s arrest by the International Criminal Court (ICC) in March over his war on drugs has exacerbated friction, as has the Marcos administration’s cooperation with ICC investigators.

Vice-president Sara Duterte, daughter of the former president, remains at the centre of political contention. Ongoing impeachment proceedings against her, have generated uncertainty, though she is likely to survive by securing sufficient support in the Senate. The poor performance of Marcos-backed candidates in the midterms has weakened his leverage in Congress, limiting reform prospects and reinforcing the risk that legislators will prioritise pork-barrel projects over infrastructure or social spending.

In the south, security conditions in the Bangsamoro Autonomous Region have improved but remain fragile. Terrorist attacks in Marawi, and Rodrigo Duterte’s inflammatory rhetoric on Mindanao secession underscore the fragility of the peace process. The postponement of Bangsamoro elections to October 2025 risks fuelling frustration, while we think delays in disarmament and socioeconomic packages for ex-combatants could derail stabilisation efforts. Still, the military and political establishment retain capacity to contain violence, and risks of large-scale insurgency remain contained.

Marcos’s government is unlikely to pursue systemic political reform, such as federalism or curbs on dynastic power, given entrenched patronage networks and vested interests. Corruption and red tape continue to distort policymaking. Meanwhile, the recently concluded tariff deal with the U.S.—finalised at a higher-than-expected 19% rate—has drawn criticism domestically, raising questions over Marcos’s ability to secure favourable terms despite direct talks with U.S. president Trump.

Overall, while the Philippines will avoid severe instability, political effectiveness will likely remain hampered by dynastic rivalries, coalition fissures, and entrenched governance weaknesses. We assess political risk as moderate-high, with periodic flare-ups likely through 2025.

Singapore (SGP)

Singapore’s political landscape remains one of the most stable in Asia, anchored by the People’s Action Party (PAP), which secured a commanding near-90% supermajority in the May 2025 general election. On May 21st, Prime Minister Lawrence Wong unveiled his first cabinet, with six of the 15 ministries changing leadership. Deputy Prime Minister Gan Kim Yong, alongside co-ordinating ministers Chan Chun Sing, Ong Ye Kung, and K. Shanmugam now oversee the economy, public services, social policy, and national security portfolios, respectively. First-time MPs Jeffrey Siow and David Neo were appointed as acting ministers for transport and for culture, community and youth, while the defence ministry shifted to Mr Chan—an appointment that reflects Mr Wong’s confidence in his prior military and ministerial experience. Notably, unlike past administrations, there is no second deputy prime minister.

The new cabinet as one of continuity, prioritising stability over structural reform. The retention of experienced ministers across finance, trade and industry, manpower, foreign affairs, and domestic security portfolios sends a strong signal to foreign investors and global partners that Singapore remains committed to steady, predictable policymaking. The reshuffle also demonstrates Mr Wong’s intent to prepare a transition from the current 4G leadership team to a younger 5G generation. Nine newcomers, including Mr Siow and Mr Neo, have been introduced in junior or acting roles, offering them a runway to build political and administrative experience under senior guidance. While this approach ensures succession planning and policy depth, it highlights the PAP’s continued reliance on technocratic recruits from the civil service, raising questions about the diversity of experience within government.

Domestically, political risks stem less from opposition forces—the Workers’ Party, though gradually expanding its reach, remains resource-constrained—and more from economic and social pressures. Rising housing costs, wage stagnation, and inequality are sources of frustration, especially for younger and middle-income groups. We think these tensions, combined with increasing demands for openness and accountability, are unlikely to destabilise the PAP’s dominance but will test its ability to adapt. Mr Wong, cautious by temperament, is not expected to deliver sweeping reforms, but rather to manage continuity while gradually differentiating his leadership from that of Senior Minister Lee Hsien Loong.

Overall, Singapore’s political outlook remains highly favourable. The PAP’s dominance, coupled with Wong’s carefully calibrated cabinet renewal, ensures continuity at a time of rising global and domestic headwinds. The test ahead will be how effectively the government addresses cost-of-living pressures and intergenerational demands for greater inclusiveness without compromising stability. We assess political risk as low.

Taiwan (TWN)

Taiwan’s overall country risk score of medium-low reflects economic strength and only ongoing, rather than acute, tensions with China over reunification. One key near-term uncertainty is Taiwan’s relationship with the new Trump administration. While Taiwan promises more U.S. imports, plus increasing advanced semiconductor production in the U.S., a trade deal is yet to be secured.  President Trump’s aversion to war could see less commitment to helping defend Taiwan. One key question is whether China hawks within the administration will persuade Trump to keep the strategic ambiguity policy. On balance the strategic ambiguity policy will likely be maintained by the U.S. Tensions in the Taiwan parliament are also not helping, with recall votes on KMT MP’s have seen them maintain their seats and KMT majority in parliament. Prolonged troubles for the DPP passing legislation are the likely prospect for the coming quarters. China is also annoyed by Lai attempts to stop China infiltration and in response has intensified military exercises as part of China’s gray-zone warfare. However, we feel that President Xi is unlikely to agree an invasion in the coming years, both as the military build up to 2027 continues and the high risk of failure if the U.S. gets involved – the U.S. enjoy clear superiority in submarine capabilities (aircraft carrier superiority could be counted by China large ballistic missile stocks). Thus, China will likely continue to pressure Taiwan but stop short of major escalation. Elsewhere, structural economic indicators remain strong, helped by a well-balanced economy, controlled inflation and a huge current account surplus. This leaves exchange transfer at a low rating, while the risk of doing business also remains at a low rating. Risk of sovereign non-payment is medium-low, which reflects the low government debt/GDP trajectory. 

Thailand (THA)

Thailand’s political climate entered another turbulent phase in Q2, with risks set to remain elevated through 2025. The overall risk assessment for Thailand remains moderately high. In June, the Constitutional Court suspended Prime Minister Paetongtarn Shinawatra over an ethics charge linked to a leaked call with Cambodia’s former leader, Hun Sen. The fallout has been severe: her remarks, seen as disparaging the Thai army, stoked public anger and raised doubts about her competence and integrity. Although reshuffled into the cabinet as culture minister, day-to-day executive authority now rests with Deputy Prime Minister Phumtham Wechayachai, who has been installed as acting premier.

The government’s parliamentary majority has been weakened by the withdrawal of the Bhumjai Thai Party, leaving Pheu Thai and its partners with only 250–260 seats in the 495-seat lower house. With verdicts looming against both Paetongtarn and her father, former prime minister Thaksin Shinawatra, the family’s political influence looks set to diminish. We expect the court to find Paetongtarn guilty, precipitating another change of government. Any Pheu Thai attempt to retain power by nominating Chaikasem Nitisiri—an elderly figure viewed as a Shinawatra proxy—would likely exacerbate perceptions of weakness and spark renewed protests. The main opposition People’s Party is pushing for an early dissolution of parliament, the possibility of which cannot be ruled out in 2025.

Beyond the leadership struggle, political reform is likely to stall. We foresee planned constitutional amendments will be diluted, excluding sensitive areas such as monarchy reform and the lese-majesty law. The conservative, military-aligned establishment will continue to wield decisive influence, limiting prospects for more democratic representation. On the economic front, the momentum is likely to remain subdued given global headwinds. However, the government will likely follow an expansionary fiscal policy to support growth, despite ranking low on the ability to provide economic stimulus.

Regional security risks have also risen in Q2. Late July saw a flare-up of border clashes with Cambodia, prompting a ceasefire agreement and the deployment of an ASEAN observation team. The accord has calmed tensions but has not addressed the root causes of the dispute. At the domestic level, a low-level insurgency in the Muslim-majority south persists but remains a marginal threat to national stability.

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