Intra-regional aid in Southeast Asia could become a viable alternative for states seeking to assert their independence and engage with sources outside the Global North.
Southeast Asia receives more than US$30 billion annually on average in aid and development finance from the international community, as recorded in the Lowy Institute’s Southeast Asia Aid Map. But there are also transfers of development support internally within the region, with developing Southeast Asian states occupying dual recipient-provider roles.
Intra-regional development cooperation includes assistance like grants and loans offered by Southeast Asian states to their neighbours. Given that the majority of the region is developing, almost all of the aid and development finance given to Southeast Asian countries comes from the international community. But China’s development spending in Southeast Asia is down by two-thirds over eight years, and contributions from major Western partners, as well as Japan, Korea and India, are back below pre-pandemic levels. Developing Southeast Asia will need to find alternate sources of funding and navigate an increasingly fraught and fractured aid landscape.
Decisions by Southeast Asian countries to accept or solicit aid from different partners are loaded with political consequences, often framed in Sino-American great power competition. Intra-regional assistance, therefore, emerges as a politically palatable alternative for Southeast Asian states seeking to assert their independence and consciously engage with sources of support outside the Global North and the multilateral development banks. Intra-regional aid cannot realistically match the volume provided by the top international partners, nor is it by any means free of geopolitical ramifications, but it is an important tool through which countries express solidarity, exercise influence and demonstrate conceptions of themselves as they evolve from aid recipient to aid provider.
Intra-regional aid is a form of south-south cooperation, a concept established at the 1955 Bandung Conference in Indonesia. Southeast Asia’s deployment of intra-regional aid must be understood as part of each country’s foreign policy, incorporating non-alignment and post-colonial solidarity as well as demonstrating growing wealth, technical expertise and national heft. It is also useful to place it in the context of an increasing push for localisation in aid.
With all this in mind, the emerging contours of the intra-regional cooperation landscape in Southeast Asia are worth watching closely. The Initiative for ASEAN Integration (IAI) is the primary multilateral mechanism for this but publishes no data on its funding or operations. As such, this cooperation is difficult to track, but it appears to be a very small component of aid to the region, representing just US$633 million or 0.25 per cent of total official development finance flows received by Southeast Asia from 2015-2022. But as Southeast Asia develops rapidly, with some economic powerhouses pulling ahead, viable development solutions and resources from closer to home become increasingly possible.
As it stands, Thailand is the dominant provider of intra-regional aid, with $540 million (constant 2022 USD) or 85 per cent of south-south aid. It has a heavy sub-regional specialisation, strongly focused on its lower-income Mekong neighbours with limited contributions further afield. Thailand’s development policy, led by the Thailand International Cooperation Agency, promotes its “sufficiency economy philosophy”. It exports this philosophy to Cambodia and Laos through workshops and training courses, but its main contribution is basic infrastructure like bridges and roads.
Vietnam is a more recent provider, but ramped up its spending considerably during the pandemic, building a school and a dam in Laos as well as providing Covid-19 financial relief worth US$1.25 million to Cambodia, Laos and Myanmar. Vietnam’s emergence in this role is particularly symbolic as it looks set to break out of the less-developed CLMV grouping, with its GDP per capita (at US$4,316 current prices in 2023) now closer to Indonesia and the Philippines than to Cambodia, Laos and Myanmar.
Clearly, this form of intra-regional cooperation is still relatively minor. But its political potency — and its potential — as an assertion of independence and solidarity should not be underestimated.
Despite its high-income status, Brunei is virtually absent in this space, offering only a scholarship programme for ASEAN participants.
The region’s wealthiest economy by far, Singapore also plays a surprisingly limited role in intra-regional support. The Singapore Cooperation Programme runs training courses for public servants mostly from other ASEAN countries and increasingly for Timor-Leste as it approaches ASEAN membership. This kind of technical knowledge transfer is typical of south-south cooperation among developing countries. But Singapore is a high-income country with one of the highest GDP per capita (PPP) in the world and an economy similar in size to Thailand and Vietnam. Singapore’s much poorer neighbours might reasonably wonder why its financial firepower is not being brought to bear.
Malaysia offers the same technical cooperation model, established in 1980 with an explicit south-south cooperation focus and a very broad geographical remit, offered to 144 countries globally. Similarly, the Philippines administers technical cooperation through its Technical Cooperation Council, albeit on a smaller scale.
Despite its history as host of the Bandung Conference, Indonesia set up its Agency for International Development only in 2019. Its focus to date has been on the Pacific and African states, as well as strong humanitarian support to Palestine, while its activities within Southeast Asia are more modest. More recently, it has offered financial support for Laos’ ASEAN chairmanship. After a history of bitter conflict between Jakarta and Dili, Indonesia is providing technical support on reform and standards to assist Timor-Leste’s ASEAN accession bid.
Clearly, this form of intra-regional cooperation is still relatively minor. But its political potency — and its potential — as an assertion of independence and solidarity should not be underestimated. The provision of aid in the near region is also a projection of influence and prestige, acting as one arm of statecraft for ambitious emerging middle powers.
