The APEC and East Asia Summits of November 2011 signaled the return of Southeast Asia to a position of importance in international politics that it had not occupied since the time of the Cold War. But the economies and domestic politics of the region have changed enormously since that time. The consequences of these changes, many of which would have been impossible to foretell even half a decade ago, will shape developments in the region during 2012.

The case of Indonesia exemplifies this reality. It has defied critics sceptical of its prospects for a transition to enduring democratic and civilian rule and emerged as a society of remarkable dynamism. This success has in its turn given rise to a series of difficult near-term challenges for the country. Its stature on the global stage, demonstrated not least by its success in the chair of ASEAN during 2011, demands that its defence establishment commit itself to thinking strategically and transcending its historically inward focus. Indonesians' and foreigners' hopes for the country demand that Jakarta promptly address its deficient police and courts, the weak capacity of much of its state bureaucracy, and the spectre of religious intolerance expressed through violence.

The presidency of Benigno Aquino in the Philippines will face similar tests during the same period if Aquino is to achieve his goal of hastening the emergence of his country from its long-time status as the sick man of the region. Observers will be keen to see how the Philippine Government's case against former President Gloria Macapagal Arroyo proceeds and how Manila fares in its effort to advance the cause of peace in Mindanao. Progress, or its lack, in these areas may well serve as a litmus test for the Aquino administration's campaign to improve governance in the country.

In the case of Vietnam, the reform of governance in the economic realm will largely determine the country's path through the year ahead.