Regional Summary
The Price of Protection Across the Indo-Pacific, democracies are trading institutional integrity for security, and the bill is coming due. Taiwan has signed away tariffs to buy American protection. Japan’s ruling party has won a supermajority and plans to rewrite the constitution. Australia has committed $30 billion to submarines while its opposition collapses. Indonesia’s president has fired regulators and offered troops to Washington. In each case, governments are concentrating power and accepting dependency in ways that weaken the domestic checks meant to keep them honest. The bargain may look rational today. It stores up fragility for tomorrow. Taiwan shows the dynamic most starkly. Lai Ching-te, the president, has signed away tariffs on almost all American goods and committed $250 billion in purchases—energy, aircraft, power equipment—over five years. This is not trade liberalisation; it is tribute, paid to keep American carriers between Taiwan and the mainland. Mr Lai can afford the concession only because Taiwan Semiconductor Manufacturing Company’s (TSMC) dominance in advanced chips gives the island leverage no tariff schedule could match. Yet even that “silicon shield” is eroding: the company’s new 3nm facility in Japan shifts production closer to the ally and further from the protectorate. Taiwan’s parliament descends into fistfights so routine that prosecutors have indicted ten legislators, and the defence budget remains stalled by the very institution meant to approve it. Security bought abroad cannot compensate for legitimacy squandered at home. Japan’s trajectory looks like a mirror image—strength abroad matched by democratic hollowing within. The Liberal Democratic Party, led by Sanae Takaichi, has won 316 lower-house seats, the largest single-party haul since 1945, and 93% of the winners back revising the pacifist constitution. Markets cheered: the Nikkei crossed 57,000 for the first time. But a supermajority is not the same as a mandate for any particular amendment, and the opposition has splintered—the Constitutional Democratic Party and Komeito cannot even form a joint upper-house caucus. Parliamentary scrutiny is now token. Ms Takaichi plans an intelligence strategy, anti-espionage laws and a two-year suspension of food consumption tax, all at once. When a leader faces no credible check on her power, the risk is not tyranny but hubris: policies enacted too fast, with too little debate, tend to be policies reversed too late. Australia offers the clearest case of a country whose strategic commitments have outrun its political capacity to sustain them. Anthony Albanese, the prime minister, has committed $30 billion to a nuclear-submarine yard in Adelaide—17 Eiffel towers’ worth of steel, 10,000 construction jobs—locking the country into decades of dependence on American and British technology. Bipartisan support for such a project ought to be a given. Instead, the Liberal Party has just deposed its first female leader after nine months, its primary vote has sunk to 18%—below One Nation’s 28%—and Angus Taylor, the new leader, calls it a “change or die” moment. Social cohesion is fraying: 41% of Australians now call society “extremely” or “very” divided. A foreign minister who refuses to condemn calls to “globalise the intifada” and a prime minister dismissed as a “manager, not a leader” suggest a government that has wagered everything on hardware while neglecting the software of domestic consent. Indonesia completes the pattern with a twist: rather than paying for American protection, Prabowo Subianto, the president, is leveraging it. He fired financial regulators after a market plunge, defended economic nationalism at an investor forum, and then volunteered up to 8,000 troops for Trump’s proposed Gaza force—the first country to do so. His approval rating sits near 80%, coalition parties are already lining up behind a second term in 2029, and the sovereign wealth fund Danantara is chasing credit ratings even as governance doubts triggered the selloff that made those ratings necessary. Mr Prabowo’s confidence is rational only if markets and allies remain patient. Both have short memories and shorter fuses. Security anxieties are not just rising; the pursuit of external safety is corroding the internal institutions—parliaments, oppositions, regulators, social trust—on which durable security depends. Democracies that hollow themselves out to buy protection may find they have purchased the one thing arms cannot defend against: their own fragility.Country Summaries
Taiwan
Taiwan signed a trade agreement that subjects its economy to American demands in exchange for continued security guarantees. The island will eliminate 99% of tariffs on US goods and spend more than $250 billion on American energy, aircraft and power equipment over five years.
The deal cuts Taiwan’s maximum tariff rate from 20% to 15% and requires the island to buy $44.4 billion in US liquefied natural gas and crude oil, $25.2 billion in power equipment, and $14.2 billion in civil aircraft through 2029. Taiwan also agreed to remove all tariffs on American passenger vehicles. The unprecedented concessions show that Taiwan pays growing premiums for American protection.
Even as Lai Ching-te, Taiwan’s president, offered these concessions, he escalated his rhetoric toward China. In an interview with Agence France-Presse, Mr Lai warned that if China took Taiwan, “the next countries under threat would be Japan, the Philippines, and others in the Indo-Pacific region, with repercussions eventually reaching the Americas and Europe.” Beijing condemned Mr Lai as a “destroyer of peace” and “instigator of war.” Mr Lai also demanded the immediate release of Hong Kong media tycoon Jimmy Lai after his 20-year sentence, saying the ruling proved Beijing’s “one country, two systems scheme exists in name only.”
Taiwan Semiconductor Manufacturing Company (TSMC) reported record January revenue of $12.7 billion, up 37% from a year earlier, driven by surging demand for AI chips. The company approved a $45 billion investment budget and confirmed plans to upgrade its Kumamoto facility in Japan to produce advanced 3nm chips. The strong results show Taiwan’s technological leadership, but the Japan expansion hastens the shift of advanced chip production away from Taiwan, weakening the island’s “silicon shield” deterrent.
Domestic institutions remain broken. Prosecutors indicted 10 legislators—seven from the Kuomintang (KMT) and three from the Democratic Progressive Party—for fights in parliament throughout 2024 and 2025. The charges show how far institutions have deteriorated as the opposition-controlled legislature remains at odds with Mr Lai over his $40 billion defence budget. US lawmakers have pressed Taiwan’s parliament to approve the spending, with Mr Lai warning that delays could push Taiwan down the American arms supply priority list. The Taiwan People’s Party has shown some willingness to review the budget after the Lunar New Year recess.
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Other Stories
- KMT chair reportedly planning mid-March meeting with Xi Jinping — Reports emerged that KMT Chairwoman Cheng Li-wun is planning to meet President Xi Jinping in mid-March. The KMT denied the reports while opposition legislators criticised the party for potentially prioritising China ties over defence budget approval. (taiwannews.com.tw)
- Former TPP legislator indicted for insulting President Lai — Former Taiwan People’s Party legislator Lin Kuo-chen was indicted for allegedly insulting President Lai Ching-te through demeaning remarks delivered in person and via livestream. (focustaiwan.tw)
- Lai congratulates Japan’s Takaichi on election victory — President Lai Ching-te congratulated Japanese Prime Minister Sanae Takaichi and the Liberal Democratic Party on their landslide victory in Japan’s general election. (focustaiwan.tw)
- Taiwan Premier reaffirms support for nuclear power technology — Premier Cho Jung-tai reiterated Taiwan’s support for nuclear power including small modular reactor technology as the island seeks stable electricity supply for its semiconductor industry. (news.ltn.com.tw)
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Notes
Lai warns regional countries could be China's 'next' targets if Taiwan is taken
February 11-15, 2026
Other
Japan
Sanae Takaichi, Japan’s prime minister, now wields more power than any postwar leader. Her Liberal Democratic Party’s 316-seat victory gives her the tools to rewrite Japan’s constitution — something no leader has managed since the 1950s.
The LDP won the biggest single-party victory in postwar history and the first two-thirds majority since the Second World War. This gives Ms Takaichi the legal authority to propose constitutional amendments from the lower house. Of the newly elected lawmakers, 93% back constitutional change — the first time over 90% of winning candidates have supported revision since surveys began in 2003. The government plans to draft Japan’s first national intelligence strategy and set up anti-espionage laws alongside the constitutional push.
The opposition’s defeat has splintered what little resistance remained. The Constitutional Democratic Party and Komeito will work as separate groups in the Upper House rather than joining forces, despite their Lower House merger into the Centrist Reform Alliance. With only 49 seats between them, this split shows how weak the opposition coalition really is and removes even modest limits on Ms Takaichi’s rule.
Markets have backed the political shift. The Nikkei 225 crossed 57,000 for the first time and closed up 3.9% at 56,363, while the Topix hit a record high. Business groups including the Japan Business Federation welcomed the stability. Aberdeen Investments called Ms Takaichi’s win the “best outcome” for markets as tax reform and investment should lift shares. The prime minister has moved fast, calling senior LDP members together to push through the fiscal 2026 budget, including tax cuts and a proposed two-year suspension of consumption tax on food.
Emperor Naruhito and Empress Masako met with Ramchandra Paudel, Nepal’s president, and First Lady Sabita Paudel at the Imperial Residence on February 3, discussing disaster relief cooperation and friendly bilateral relations.
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Other
South Korea
A trade fight over Coupang is testing whether South Korea’s alliance with America can handle disputes over regulation without damaging the broader relationship.
Five American investment firms are seeking arbitration under the Korea-US free-trade agreement over South Korea’s response to Coupang’s data breach last year. The House Judiciary Committee has issued subpoenas for a congressional investigation looking at whether Korean enforcement actions unfairly target American companies. The dispute has strained what had been a workable relationship since Lee Jae-myung, the president, took office after the December 2024 martial law crisis.
Mr Lee is continuing his efforts to juggle multiple relationships. He met NATO Secretary General Mark Rutte to discuss Euro-Atlantic and Indo-Pacific security links and defence industry cooperation. He also congratulated Japanese Prime Minister Sanae Takaichi on her election victory, expressing hope for continued shuttle diplomacy. Both meetings followed the patterns that have defined Mr Lee’s approach to managing alliances.
South Korea established its first joint foreign and trade ministers’ dialogue with the Netherlands, adopting a joint statement on cooperation in AI, semiconductors and critical materials. The partnership matters because the Netherlands controls ASML semiconductor equipment exports to South Korea. Foreign Minister Cho Hyun chaired the first preparatory meeting for a Korea-Central Asia summit scheduled for September 16-17, involving 35 government agencies—part of South Korea’s effort to build new diplomatic ties.
Accountability from the martial law crisis continues. Former Interior Minister Lee Sang-min was sentenced to seven years in prison for his role in the attempted power grab, the second cabinet-level conviction after former Prime Minister Han Duck-soo’s 23-year sentence. The court again called the martial law attempt insurrection. Political polarisation persists, with opposition leader Jang Dong-hyuk declining a presidential luncheon invitation, but it has not undermined the president’s control.
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Other Stories
- Kim Jong Un’s daughter Kim Ju-ae being designated as successor, intelligence service reports — South Korea’s National Intelligence Service reported that Kim Jong Un’s daughter Kim Ju-ae has entered the stage of being formally designated as the regime’s successor, marking a shift from previous assessments that described her as being ‘trained’ for succession. (bbc.com)
- Bithumb crypto exchange accidentally distributes $40 billion in Bitcoin to customers — South Korea’s Bithumb cryptocurrency exchange mistakenly credited customers with 620,000 bitcoins worth over $40 billion during a promotional event. The exchange recovered 99.7% of the erroneous credits but faces regulatory scrutiny and questions about system security. (reuters.com)
- Lee Jae-myung addresses real estate policy criticism and ownership questions — President Lee Jae-myung defended his administration’s real estate policies amid criticism, stating he owns only one home and that policies aim to reclaim ‘unfair privileges’ from speculation. He faced questions about forcing multiple homeowners to sell properties. (chosun.com)
- People Power Party leadership crisis and internal conflicts — The conservative People Power Party faces internal leadership challenges with leader Jang Dong-hyuk under pressure and party members calling for unity amid factional conflicts. The party’s fate may hinge on upcoming Seoul and Busan mayoral races. (upi.com)
- Samsung Galaxy S26 series launch preparations and marketing campaign — Samsung is preparing for the Galaxy S26 series launch with global marketing campaigns, including giant screens in 17 cities worldwide. The phones are expected to launch in India on February 25 with pre-reservations already started. (hindustantimes.com)
- North Korea opens housing district for families of soldiers killed in Ukraine war — North Korea completed a housing district in Pyongyang called Saeppyol Street specifically for families of soldiers killed while fighting alongside Russian forces in Ukraine. The development was attended by Kim Jong Un. (apnews.com)
- North Korea threatens ‘dire consequences’ over alleged drone incursions — North Korea, through Kim Yo-jong’s warning, threatened dire consequences if Seoul doesn’t stop alleged drone incursions. The threats could derail President Lee Jae-myung’s efforts to improve inter-Korean relations. (scmp.com)
Notes
Notes
Kim Jong Un's daughter Kim Ju-ae being designated as successor, intelligence service reports
February 12, 2026
Former Interior Minister Lee Sang-min sentenced to 7 years for martial law role
February 10-14, 2026
Bithumb crypto exchange accidentally distributes \$40 billion in Bitcoin to customers
February 08-11, 2026
Other
Australia
Australia is spending $30 billion on nuclear submarines just as its opposition falls apart, putting at risk the bipartisan consensus that has anchored the country’s strategy since 1951.
Anthony Albanese, the prime minister, announced a $3.9 billion payment for an Australia-UK-US submarine construction yard in Adelaide, with total costs of $30 billion — Australia’s biggest-ever defence commitment. The facility will hire 10,000 workers during construction and create 1,000 apprenticeships annually. The 420-metre fabrication hall will require steel equivalent to 17 Eiffel towers and 710,000 cubic metres of concrete, transforming Australia’s industrial base and locking the country into unprecedented dependence on America.
But the opposition that would normally back such moves has fallen apart. Angus Taylor beat Sussan Ley, the Liberal Party leader, in a party room vote 34 to 17, ousting Ms Ley after just nine months as the party’s first female leader. Ms Ley said she would quit parliament entirely and “completely and comprehensively” exit public life, triggering a by-election in her rural seat of Farrer. The Coalition’s polling shows 18% primary support — below the populist One Nation Party’s 28%. Mr Taylor called it a “change or die” moment for the Liberal Party, but with the centre-right breaking up, the bipartisan consensus faces fresh risks.
The government faces pressure over social tensions. New research shows 41% of Australians now view society as “extremely” or “very” divided, up from 27% eighteen months ago. Mr Albanese was criticised as a “manager, not a leader” over his handling of tensions around Isaac Herzog, Israel’s president, during his visit. The Coalition attacked his response to antisemitic incidents while the Greens attacked him for hosting Mr Herzog at all. Grace Tame, a former Australian of the Year, led “globalise the intifada” chants at a pro-Palestinian protest during the visit. Penny Wong, the foreign minister, refused to condemn Ms Tame’s remarks, saying she would not be “drawn into another cycle of outrage” despite Australia’s antisemitism envoy viewing the phrase as inciting hatred against Jews.
A former undercover agent claimed he warned the Australian Security Intelligence Organisation (ASIO) in 2019 about Bondi shooter Naveed Akram’s terrorist links and Islamic State support. Mike Burgess, ASIO’s director-general, defended the agency’s 2019 assessment that Mr Akram posed no threat, calling the claims “baseless” and saying an internal review backed the original assessment. The agency says Mr Akram “went dark” to avoid detection before the attack.
Notes
Notes
ASIO faces scrutiny over Bondi terror attack warnings as ABC airs Four Corners investigation
February 09-10, 2026
Other
Indonesia
Indonesia is putting its own economic interests first despite market turmoil that has spooked investors and drawn warnings from global rating agencies.
Prabowo Subianto fired financial regulators after January’s market plunge and threats from Morgan Stanley Capital International (MSCI) to relegate Indonesia to frontier status. Hashim Djojohadikusumo, his brother, said the president was “very angry” about threats to Indonesia’s reputation. Instead of backing down, Mr Prabowo used an investor forum to defend his approach while announcing 308 trillion rupiah in budget savings to fund his priorities. The sovereign wealth fund Danantara also announced $13.1 billion in new investments across waste-to-energy, data centres, chemicals, and agriculture projects. Rosan Roeslani, the fund’s chief executive, said it was seeking credit ratings from Moody’s and S&P—a bold move given the governance concerns that triggered the market selloff.
The administration is also expanding military commitments abroad and at home. Indonesia will deploy 5,000-8,000 Indonesian National Armed Forces (TNI) troops to Gaza as the first country to join President Donald Trump’s International Stabilisation Force, with advance teams arriving this weekend to coordinate with US and Israeli commands. Mr Prabowo will attend the inaugural Board of Peace meeting on February 19 and sign a US trade deal. Meanwhile, the navy is acquiring the Giuseppe Garibaldi aircraft carrier from Italy, targeted for delivery before the TNI’s October anniversary, alongside new warships. The military is also familiarising itself with Thailand’s carrier operations.
Mr Prabowo retains strong domestic support, though how long that support will last after the market turmoil remains unclear. A January 15-21 survey found 79.9% satisfaction with his performance—higher than early ratings for previous presidents. But the poll came before the late-January market crisis and regulatory firings. Coalition parties are declaring support for a second Prabowo term in 2029, with the Great Indonesia Movement Party (Gerindra), National Mandate Party (PAN), and National Awakening Party (PKB) already backing him while the Party of Functional Groups (Golkar) and others wait. Mr Prabowo’s mix of economic nationalism, military expansion, and political confidence suggests he believes his model can weather both market pressure and investor alarm.
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Other Stories
- Prabowo doubles down on growth policies despite market concerns and announces massive budget savings — Mr Prabowo’s administration continues pursuing contentious growth and spending policies despite market turmoil and investor concerns. The president announced 308 trillion rupiah in budget savings through efficiency measures while defending his economic approach at an investor forum. (reuters.com)
- Prabowo meets with Indonesia’s richest businessmen at Hambalang — Mr Prabowo held a meeting with five of Indonesia’s wealthiest businessmen at his Hambalang residence, emphasising collaboration to strengthen the economy and create jobs. The meeting included major conglomerates and lasted over 4.5 hours, affecting stock market movements. (finance.detik.com)
- Vice President Gibran promotes anti-corruption measures and economic development — Vice President Gibran Rakabuming Raka has been active promoting anti-corruption measures including asset forfeiture laws, while also supporting digital payments in traditional markets, sharia economic development, and strengthening small business access to modern retail. His electability for 2029 also emerged in polls. (en.antaranews.com)
- Indonesia’s corruption perception index drops to 34 under Prabowo-Gibran administration — Indonesia’s Corruption Perception Index fell three points from 37 to 34 in 2025, with Indonesia Corruption Watch attributing the decline to policies of the Prabowo-Gibran government that allegedly weakened anti-corruption agendas. (suara.com)
- Indonesia plans to send 8,000 TNI troops to Gaza peacekeeping mission — Indonesia will send approximately 8,000 soldiers to Gaza as part of the International Stabilisation Force supporting Mr Trump’s Board of Peace initiative. The deployment has raised questions about mandate clarity and risks, with Hamas responding that peacekeeping forces must remain neutral. (news.detik.com)
- Bank Indonesia launches currency exchange programme for Ramadan 2026 — Bank Indonesia opened its annual SERAMBI programme for currency exchange ahead of Ramadan and Eid al-Fitr 2026, preparing 8.6 trillion rupiah for the service. The programme allows online reservations through the PINTAR application with multiple exchange periods scheduled. (artikel.pajakku.com)
- Pertamina undergoes major business restructuring and launches green energy projects — State energy company Pertamina is streamlining operations by reducing subsidiaries from 257 to 242 companies and launching $7 billion in natural resources processing initiatives. The company will also spin off non-oil businesses including airlines, hospitals, and hotels as part of broader state enterprise restructuring. (hydrocarbonprocessing.com)
- Golkar party strengthens support for government while preparing for 2029 elections — The Party of Functional Groups has been consolidating support for the Prabowo-Gibran administration while preparing for the 2029 elections with leadership activities across regions. The party emphasised loyalty to the government and targeted a 20% increase in vote share, while warning members against attacking government policies. (makassar.tribunnews.com)
- Roy Suryo case developments in Jokowi diploma controversy — The case involving Roy Suryo and others accused of spreading false information about former President Jokowi’s diploma has seen new developments with former police officials and supporters serving as expert witnesses. Former deputy police chief Oegroseno criticised the police report as unclear and violating legal procedures. (tribunnews.com)
- Smart Air pilots shot in Papua incident linked to security threats — Police are investigating the shooting of Smart Air pilots in Papua’s Boven Digoel regency, with the incident potentially linked to armed groups that previously threatened to disrupt Mr Gibran’s planned visit to Yahukimo. The national police chief ordered immediate arrest of the perpetrators. (cnnindonesia.com)
- Prabowo defends free meals programme budget amid criticism — Mr Prabowo defended his flagship free meals programme against criticism over its large budget allocation, claiming the funding comes from efficiency savings rather than wasteful spending. The programme aims to address malnutrition and stunting issues. (nu.or.id)
Notes
Notes
Prabowo doubles down on growth policies despite market concerns and announces massive budget savings
February 10-15, 2026
Vice President Gibran promotes anti-corruption measures and economic development
February 10-14, 2026
Indonesia's corruption perception index drops to 34 under Prabowo-Gibran administration
February 10-11, 2026
TNI acquires new military capabilities including Giuseppe Garibaldi aircraft carrier
February 12-15, 2026
Pertamina undergoes major business restructuring and launches green energy projects
February 10-15, 2026
Golkar party strengthens support for government while preparing for 2029 elections
February 09-15, 2026
Other