Three key political features of 2003 will continue to mark the regional climate in 2004. They are the U.S. war in Iraq, the spectre of terrorism and leadership changes in a few ASEAN countries.

When the United States asked for support for its war against the Saddam Hussein regime in Iraq, it was evident that ASEAN could not work out a common position on this as there were members who were willing to join the U.S. “coalition of the willing” and others who opposed the U.S. action in no uncertain terms. These differences will continue to be tested as the U.S. action drags on in Iraq.

The fortunate thing is it has not disrupted the common will to fight Islamic terrorist groups operating in the region. Terrorism remains the region's foremost security threat and while it is not acute enough to immobilize any daily routine in the ASEAN countries, it does have serious implications for foreign investors' confidence in the region. Some progress has been made in the bid to arrest key personnel in terrorist groups and disrupt their operations. However, when a bomb went off in Jakarta in August 2003, less than a year after the October 2002 bombing in Bali, everybody is reminded that the spectre of terrorism is very real and can strike anywhere any time. In May 2003, Cambodia with a minority Islamic community of 700,000 joined the list of ASEAN countries that have to take security action against people with connections to Islamic terrorist organizations.

In the midst of these bracing times, three major ASEAN countries — Indonesia, Malaysia and the Philippines — face national elections. In all cases, the incumbents are the favoured candidates to win, thus guaranteeing a measure of continuity. But in two of these three cases — Indonesia and the Philippines — the electoral outcomes are not likely to produce any reliable solution to ineffective governance. The 2003 national election in Cambodia has produced another hung legislature which can only prolong the political disorder of that country.