The ramifications of the global pandemic can be grouped into three categories — its economic impact, how it will affect governance in certain countries and its implications for US–China great power competition.

The economic damage from COVID-19 is already disastrous. Some economic analysts project an economic contraction at or beyond the scale of the 2008 global financial crisis or the 1997–1998 Asian financial crisis (AFC).

The Indonesian rupiah has already plunged to its lowest level since the AFC. The 1998 crisis led to widespread austerity measures and political upheaval — most famously triggering the downfall of long-time Indonesian strongman Suharto.

It is then conceivable that a dramatic economic slowdown as a result of the global pandemic could lead to unforeseen political change in authoritarian states, or even in democratic states, which have been hit particularly hard by the virus.

COVID-19 is also revealing the risks of over-reliance on and interdependence with China. Beyond the apparent ease with which viruses rapidly cross borders, Southeast Asia’s economic integration with China makes it extremely vulnerable to volatility in the Chinese economy.

Southeast Asian nations depend on Chinese tourism and trade, and regional supply chains are closely bound together. In 2018, tourism made up over 20 per cent of GDP for Thailand and the Philippines, and more than 30 per cent for Cambodia. Local industries are hurting without tourists.

COVID-19 tells us a great deal about governance trends across the region. The initial success of Singapore and Vietnam in preventing the virus from spreading shows the importance of good governance and implementing effective testing and treatment systems. While Singapore has seen a dramatic surge in the number of cases within migrant worker communities, its testing capabilities and health care system remain among the best in the world.

In contrast to the foot dragging of Indonesia’s enormous and decentralised government apparatus, Vietnam’s Communist Party proved highly responsive, introducing early lockdown measures to contain the spread of the virus. But weaker states like Laos, Myanmar and Thailand are still struggling to control internal travel and cross-border flows.

Strongmen have seized the opportunity granted by COVID-19 to take on emergency powers and further dismantle democratic checks and balances on their authority. The Philippine Congress recently granted President Rodrigo Duterte emergency powers, though it stopped short of granting him sought-after authority to take over private businesses and utilities. Duterte has also encouraged the military and police to shoot curfew violators, while police have put some offenders in dog cages.

COVID-19 exposes ASEAN’s inability to forge a unified response to global crises that jeopardise the shared security of its member states. ASEAN has held several important summits but lacks the broader institutional capacity to mobilise the much-needed resources to tackle the current crisis collectively.

The pandemic may enlarge existing differences between ASEAN states in their relations with China. Cambodian Prime Minister Hun Sen travelled to China in early February to show solidarity with Beijing in the early days of the crisis, while Singapore and Vietnam imposed bans on travel to and from China despite warnings from Beijing to consider the consequences.

It remains to be seen whether Southeast Asian countries will be left with the impression that China is not to be trusted for its initial cover-up of the virus.

The ongoing narrative battle has meant that rather than fostering global cooperation between great powers, the pandemic has deepened China–US distrust. Chinese officials in the Ministry of Foreign Affairs have even spread malicious disinformation that the US military initially brought COVID-19 to China.

US President Donald Trump and Secretary of State Mike Pompeo for their part have insisted on referring to COVID-19 as the ‘Chinese’ or ‘Wuhan virus’, further damaging goodwill between the two largest powers. The leaders of both countries are catering their messages to domestic audiences and stoking virulent nationalism in the process.

The Chinese Communist Party appears desperate to deflect attention from its initial failure to contain and cover up the virus. Meanwhile the Trump administration is trying to divert domestic criticism for its own mishandling of the crisis. The United States has recorded more deaths than any other country in the world, badly damaging its credibility abroad. Given the Trump administration’s shameful display of xenophobia and ‘America First’ nativism, Southeast Asians may fondly recall Beijing’s help in providing medical supplies.

Much like the 2008 global financial crisis, this moment could mark a turning point in the international system. There is a gradual shift in the balance of power away from US hegemony towards a new era in which China is a peer competitor. The pandemic is exacerbating rivalry between the United States and China, placing increased pressure on Southeast Asian states to choose sides. Zero-sum competition could even force ASEAN members to go it alone and reduce their reliance on the two major powers for security and trade.

While the intensity and nature of the economic, governance and geopolitical impacts of COVID-19 on Southeast Asia are still evolving, these changes will likely leave an enduring mark in the post-COVID-19 world.

Hunter Marston is a PhD candidate in International Relations at the Coral Bell School of Asia Pacific Affairs, The Australian National University.

This article is part of an EAF special feature series on the novel coronavirus crisis and its impact.