Southeast Asia Brief: Geopolitics in Kuala lumpur, Crypto Concerns in Laos, and Cambodia’s Scam Problem
Welcome to Foreign Policy’s Southeast Asia Brief.
The highlights this week: ASEAN’s summit makes Kuala Lumpur a geopolitical hub, Laos considers cutting power to crypto miners, a royal baby is announced in Brunei, and scam gangs’ state ties are exposed in Cambodia.
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This year’s summit of the Association of Southeast Asian Nations (ASEAN) runs this Sunday, Oct. 26, through Tuesday. The U.S.-China trade war will be the main item on the agenda, with an expected bilateral discussion of rare earths occuring on the sidelines.
ASEAN has its own priorities too, including the admission of a new member, Timor-Leste.
An unusually prominent lineup of expected guests includes U.S. President Donald Trump, Chinese Premier Li Qiang, Russian president Vladimir Putin, Brazilian President Luiz Inácio lula da silva, South African President Cyril Ramaphosa, Indian Prime Minister Narendra Modi, and Italian Prime Minister Giorgia Meloni.
World leaders seem to like that the bloc tends to be resolutely impartial in geopolitics, and they are also keen to cultivate friendships in a region central to the global economy.
Still,the most consequential meeting may not be between leaders but,rather,a planned discussion between U.S. Treasury secretary Scott Bessent and Chinese Vice Premier He Lifeng.
The pair will discuss China’s sweeping restrictions on exports of rare earths and products using them. Trump has responded by threatening new 100 percent tariffs on China as well as controls on exports of software to China.
Bessent and He will also set the tone for a potential meeting between Trump and Chinese President Xi Jinping. Trump has suggested that this will take place at the upcoming Asia-Pacific Economic Cooperation summit in South Korea, which will be held from Oct.31 to Nov. 1.(Xi,as usual,is not attending the ASEAN summit.)
For the ASEAN summit, Trump has said that he will only attend if he can preside over the signing of a peace deal between Cambodia and Thailand to cement a cease-fire that he says he played a role in brokering.
And, oh-China can’t be in the room when it happens, at the request of White house officials.
Whether the peace deal will go ahead seems uncertain. As I wrote last week, negotiations between the two nations seem to be breaking down. Thailand’s prime minister has also indicated that he’s not interested in further U.S. involvement.
ASEAN itself is focused on dealing with the repercussions of the recent storms and flooding in vietnam and the Philippines.
Pandemic Deus Ex Machina for the Lao Economy?
Laos’s gamble on cryptocurrency mining is looking increasingly shaky.
Vientiane – Laos, a small, landlocked nation in Southeast Asia, found itself in a precarious economic position as the COVID-19 pandemic took hold. Tourism, a key pillar of the Lao economy, evaporated almost overnight. Just as things looked bleak, a potential savior emerged: cryptocurrency.
The country’s entanglement with crypto kicked off in 2021, when the government announced that it would allow crypto companies to mine and sell in the country while paying a capped energy fee to do so. That same year,China banned crypto mining,prompting many players in what had been the world’s biggest crypto mining market to relocate their operations.
Another incentive seems to have been the perilous levels of debt that had accumulated during the country’s dam-building spree. The plan had been to export green energy and a lot has been sold abroad in recent years.
But the crypto boom has caused headaches. Energy-hungry crypto has caused blackouts during the dry season, when hydropower runs low. And in the wet season, the country generates more than it can export due to a lack of transmission infrastructure.
Plans for a regional grid that would let Laos sell to rich and power-hungry Singapore have stalled. Laos’s state electricity company is being sued by a state-owned Chinese construction company over unpaid debts.
Indonesian army clashes with insurgents. the Indonesian army and independence fighters clashed in the restive region of Papua on Oct. 15, leaving more than a dozen dead.
In a statement, the indonesian military claimed that it had killed 14 separatist fighters who had attacked troops while armed with conventional weapons as wells as bows and arrows. The insurgents said the Indonesian military had killed nine civilians.
The clash came as Indonesian troops prepared to assault a rebel post in the village of Soanggama in the Intan Jaya district of the Central Papua province. The Indonesian military claimed that the village has been a hotbed of insurgency.
Fighting in the region seems to have escalated this year. while information is hard to confirm, it truly seems that the Indonesian military has stepped up its operations. And more locals are responding by joining independence fighters in the jungle.
Papua has long been marked by conflict. The ongoing struggle can be traced back to 1962, when the region’s leaders demanded a referendum for independence but instead saw the territory incorporated into the Indonesian nation via the “act of Free Choice,” which saw 1,022 Papuan tribal representatives coerced into voting to join Indonesia.
Brunei’s royal baby. Brunei’s Prince Abdul Mateen, 34, and his wife, Princess An
Foreign Policy News Roundup – October 17, 2025
FP’s Most Read This Week
* why the Democrats Are So Lost by Michael Hirsh
* Timor-Leste Adds a New Wrinkle to U.S.-China Competition by Derek Grossman
* russia’s Next Opposition Will Not Be Liberal by Alexey Kovalev
Vietnamese public opinion is shifting more favorably towards China, possibly influenced by platforms like TikTok (Reuters).
China is increasingly filling the void left by reduced U.S. aid in Asia, stepping up support for organizations in need (Nikkei Asia).
Indonesia’s strategic thinking prioritizes internal threats – particularly perceived attempts by Western countries to destabilize the nation – over external challenges like China, according to Rahman Yaacob at the Lowy Institute (the Interpreter).
The Philippines is studying Ukraine’s military strategies, particularly in asymmetric warfare, to enhance its defence capabilities against China (Rappler).
Cambodia’s scam state. A joint U.S.-U.K. operation targeting Cambodian criminal groups involved in scam compounds has revealed close connections between these organizations and the Cambodian government. Journalist Jack Davies describes the situation as a shift from a “narcostate” to a “scam state.” On October 14, the united States, in collaboration with the United Kingdom, indicted individuals linked to these operations (Nikkei Asia, PDF report, RFA, Justice.gov, SCMP).
## Cambodia’s “Scam State” and the Prince Group’s Influence
Recent reports indicate that online scam operations in cambodia generate an estimated $12.5 to $19 billion annually, representing as much as 60% of the nation’s GDP. This has led to descriptions of Cambodia as a “scam state,” characterized by a deeply embedded network of criminal activity intertwined with the country’s political and economic institutions. A central figure in this landscape is the Prince Group, a conglomerate with extensive connections to Cambodia’s ruling elite.
The Prince Group, led by Chen Zhi, has become a focal point in examining the complex relationship between crime, government, and international finance in Cambodia. Experts suggest the group’s wealth and influence pose a challenge to the Cambodian government, which has historically maintained power through elite coercion and a lack of accountability. As noted by researcher Sims, this represents “a direct challenge to a regime that has built its political durability on elite coercion, criminal impunity, and predation.”
The scale of revenue generated by companies like prince allows them access to the highest levels of government.This influence was publicly demonstrated in 2022 when then-Prime Minister Hun Sen gifted watches produced by Prince Horology, a subsidiary of the Prince Group, to visiting leaders during the ASEAN summit – a collective gift reportedly worth millions of dollars.
Unlike traditional “narcostates” where territorial control is crucial, scam operations do not require it. This distinction has implications for who is affected by the criminal activity. While individuals trafficked into working within the scam compounds face abuse and even murder, locals are generally left unharmed. According to researcher Davies, “The general consensus is you find almost no Cambodians trafficked into there. if it happened to locals, I think it would become a serious liability for the ruling party.”
Davies argues that these groups are now integral to Cambodia’s political economy, functioning similarly to illegal logging in the past by fueling the country’s patronage system. He describes Cambodia as “feudalism plus capitalism plus gangsterism.”
The Prince Group’s reach extends beyond Cambodia’s borders, with allegations of involvement in international incidents. radio Free Asia has reported allegations of the Prince group’s involvement in a failed attempt to kidnap an overseas dissident. Further reporting by Radio Free Asia also suggests the group has attempted to influence operations in Palau.Some reports even speculate a connection between scam groups and the brief border conflict with Thailand in July.
Despite these concerns, sanctions imposed by the United States, as Cambodia experiences a limited improvement in relations with the US, have not targeted Cambodian politicians directly.