THE NAVIGATOR
JULY 2026
TRUST AND TURBULENCE: THE DOMESTIC COST OF GEOPOLITICS
Written by Dr. Manali Kumar, Executive Director
The US-Iran conflict dragged on into its fifth month despite renewed diplomatic mediation by Pakistan and China, while global trade faced fresh turbulence as the Trump administration moved to impose tariffs on key foreign partners. Against this volatile backdrop, the US commemorated the 250th anniversary of its independence amid profound anxieties over democratic erosion, corruption, and entrenched crony capitalism — systemic strains echoing strongly in both Washington and New Delhi. For ordinary citizens worldwide, these institutional fractures are deepening a pervasive sense that daily life is growing harder, battered by a relentless cost-of-living crisis, dimming job prospects, ongoing wars, and climate-driven disasters.
Our regional review this month highlights how these global pressures manifest across the Indo-Pacific, where intensifying US-China competition forces states to navigate escalating flashpoints while safeguarding vital trade ties. This rivalry intersects with acute domestic volatility, as stubborn inflation and policy missteps erode public trust, driving mass protests in India and sinking approval ratings in Japan and Indonesia. In response, governments are elevating critical technologies — such as semiconductors, AI governance, and energy independence — from purely economic assets into essential defences for national resilience.
Crucially, these geopolitical and economic strains are compounded by severe climate vulnerability, as devastating floods and extreme heatwaves destabilise fragile economies and overwhelm public infrastructure. Ultimately, regional security is no longer defined solely by military defence, but by how effectively states navigate this compounding feedback loop of climate shocks, economic hardship, and great-power competition.
Underpinning these converging crises is a profound decay of trust at every level of society. Internationally, erratic US policies are eroding faith in Washington’s reliability and fracturing confidence in the rules-based global order. Domestically, populations disillusioned by systemic corruption and economic hardship are losing faith in the institutions built to protect them. To prevent a slow erosion from within, both nations and citizens must actively fight to restore this trust — safeguarding the global cooperation necessary for shared survival while fiercely defending the democratic freedoms that uphold it.
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THE COST OF EUROPE’S TALIBAN DEAL
Written by Chris Fitzgerald, Freelance journalist
The European Union has drawn criticism after hosting Taliban officials in Brussels last month, the first visit by Afghanistan’s de facto rulers since the group returned to power in 2021.
The EU wants to negotiate a deal with the Taliban to forcibly return Afghan asylum seekers who have committed crimes or who are deemed dangerous back to Afghanistan, a hardline policy aimed at countering the rise of far-right anti-immigration politics throughout Europe.
The EU downplayed the meeting, calling it technical and limited. But the decision to meet with the Taliban raises significant questions about Europe’s intentions, and whether they are compatible with the bloc’s values and international law.
Human rights groups have pointed to the Taliban’s ‘horrific human rights record’, especially the group’s abysmal treatment of women and girls, as to why the meeting should not have gone ahead and why Afghan refugees should not be sent back to Afghanistan.
They have a point. Until now, the EU has steadfastly refused to recognise the Taliban because of its human rights record. EU members Germany and the Netherlands have also joined the case brought to the International Court of Justice accusing the Taliban of gender apartheid, and the European Parliament supported the International Criminal Court’s arrest warrants for Taliban leaders for crimes against humanity.
Under international law, the EU cannot return asylum seekers to a country where they face persecution or torture. Approximately 32 per cent of Afghan asylum seekers in Europe are women, and many others fled the Taliban after working for the US. There is no doubt that these people would face harm from the Taliban if they were returned to Afghanistan.
The EU also claims its policy on non-recognition remains. But hosting the group gives the Taliban legitimacy and a rare opportunity to meet with Western leaders. Europe’s willingness to negotiate on refugee returns also normalises the Taliban’s poor human rights record and undermines any attempt to hold it accountable for persecuting women and girls, political opponents, and ethnic minorities.
The Taliban understands this all too well, calling the trip a ‘historic visit’ and claiming it is a step towards consular relations with Europe. The Taliban craves legitimacy, and the EU has given it just in return for a punitive deal on refugees.
The EU is selling its soul to deal with the Taliban. It should seriously reconsider.
ACROSS THE INDO-PACIFIC
South Asia
Heavy rains triggered widespread flooding across northeastern India, Bangladesh, Pakistan and Afghanistan, displacing people, damaging farmland and infrastructure, and highlighting the growing climate vulnerability of South Asia despite the region contributing relatively little to global emissions.
The UN has secured less than 20 per cent of the USD 1.71 billion it is seeking for its 2026 humanitarian response in Afghanistan, raising concerns over a widening funding gap. Meanwhile, the UNDP estimates that 29 million people — around 74 per cent of the population — are unable to meet their basic needs as conflict, economic fragility, climate shocks and mass returns continue to strain livelihoods and public services.
Hoping to capitalise on its peace-brokering between the US and Iran, Pakistan has reportedly requested a USD 10 billion Bilateral Exchange Stabilisation Support Facility from the US. If granted, it would bolster foreign exchange reserves, ease pressure on the rupee, and reduce reliance on multilateral financing as it implements IMF-backed fiscal and monetary reforms.
A suicide attack claimed by the Pakistan Taliban (TTP) on a security checkpoint in northwestern Pakistan near the Afghan border killed 27 people, including soldiers, police officers and militants, marking the latest in a series of escalating attacks. Pakistan said it was strengthening security around a Chinese-operated copper and gold mine in Balochistan after insurgent attacks disrupted supply routes. The province, which borders Iran and Afghanistan, hosts several major Chinese-backed projects, including the port of Gwadar.
Meanwhile, multiple Pakistani law enforcement agencies have been targeted in separate cyber campaigns linked to groups associated with China and India. Cybersecurity firm SentinelOne said the attacks, detected between February 2024 and April 2026, primarily targeted Balochistan Police and other security institutions.
What began as the satirical Cockroach Janta Party (CJP) evolved into India‘s largest youth protest movement in decades, forcing the government into a rare concession: the resignation of Education Minister Dharmendra Pradhan and a commitment to overhaul the country’s examination system following widespread outrage over leaked medical entrance exams. The reversal is highly unusual for Prime Minister Narendra Modi, whose government has rarely yielded to sustained public pressure. The protests were overshadowed by allegations of police brutality, with officers accused of using tear gas, batons and excessive force against demonstrators, while internet disruptions further fuelled criticism of the authorities’ response. Activists have also challenged the government’s use of AI-powered surveillance, including facial recognition technology and monitoring of protesters’ social media accounts, raising broader concerns about privacy, accountability and the policing of dissent.
Bangladesh and the US launched the annual Tiger Lightning military exercise to strengthen their strategic partnership and Indo-Pacific cooperation. The 13-day drills focus on jungle warfare, counter-terrorism, and tactical combat casualty care.
Sri Lanka deployed military drones to identify mosquito breeding sites as it battles its worst dengue outbreak in nearly a decade, with more than 77,000 infections and 56 deaths reported this year, over a quarter of them in July alone.
Southeast Asia
More than two dozen counterparts from across the Indo-Pacific and beyond gathered in Manila from 21-23 July for the ASEAN Regional Forum. ASEAN’s joint statement following the forum emphasised the need for cooperation on maritime security and called for an end to fighting in the Middle East and a full re-opening of the Strait of Hormuz. US Secretary of State Marco Rubio attended the forum and assured ASEAN members that while the US is pursuing positive relations with China, it will not abandon its partners in Southeast Asia.
An altercation between the Philippines military and the Chinese coast guard on 21 July at the Second Thomas Shoal led to the Philippines accusing China of injuring one of its sailors. Beijing accused the Philippines of inciting the incident, alleging that “Philippine personnel first used paddles, wooden poles and other implements to aggressively attack Chinese law enforcement officers”. July 2026 marks the tenth anniversary of the landmark UNCLOS decision declaring China’s vast territorial claims in the South China Sea invalid. In his State of the Nation Address, President Marcos denounced China, vowed to uphold the UNCLOS decision, and criticised a video recently posted on Chinese state media that depicted the Philippines as a monkey blindly following the US and Japan. Meanwhile, the ongoing impeachment trial of Vice President Sara Duterte continues to dominate headlines.
The Malaysian state of Johor held regional elections, resulting in a significant loss for Prime Minister Anwar Ibrahim’s Pakatan Harapan Coalition. The Barisan Nasional Party secured a decisive victory, aided by growing disillusionment with Anwar’s leadership and recent discord between Malay and Muslim parties. These results could signal trouble for the ruling PH coalition in the general election that must be held by 2028.
Cambodian Prime Minister Hun Manet announced that compulsory military service will take effect beginning next year. This development is linked to rising tensions with Thailand. Hun Manet also met with Chinese President Xi Jinping in Shanghai, where both parties pledged to deepen economic ties.
In Indonesia, President Prabowo announced that the country has virtually halted diesel imports by mandating a 50 per cent palm oil-biodiesel blend, aimed at strengthening national energy independence. At the same time, his approval rating fell sharply to 51 per cent, down from over 80 per cent in November 2025. This is mainly a result of public perceptions of economic mismanagement.
East Asia
In Japan, Prime Minister Takaichi’s Cabinet approved her economic and fiscal policy blueprint setting out a long-term industrial strategy centred on AI, semiconductors, defence industries, clean energy, and supply-chain resilience. However, doubts remain over whether her USD 2.3 trillion spending programme through 2040 is fiscally sustainable, prompting comparisons with Liz Truss’s 2022 ‘mini-budget’. Meanwhile, Takaichi’s approval ratings plummeted as inflation, rising living costs and the weak yen weighed on public confidence. Separately, Japan experienced its first officially recognised ‘kokushobi’ (‘cruelly hot day’), with temperatures exceeding 40°C, underscoring the challenges posed by climate change and the need for greater resilience.
In China, the People’s Liberation Army conducted a first submarine-launched ballistic missile test into the Pacific, drawing criticism from the US and Pacific Island governments. The launch publicly demonstrated China’s sea-based nuclear strike capability and willingness to project power into the Pacific. Meanwhile, Premier Li Qiang used the World AI Conference in Shanghai to present Beijing as a champion of international AI cooperation, launching the World AI Cooperation Organisation. The initiative reflects China’s broader effort to shape global AI standards and institutions while strengthening ties with developing countries.
In South Korea, the economy expanded by 0.6 per cent in the second quarter, outperforming expectations as booming semiconductor exports offset weakness in construction, reinforcing the sector’s role as the country’s principal growth engine. Meanwhile, President Lee Jae-myung’s government continued its policy of ‘pragmatic diplomacy’, describing its approach to North Korea as a shift from ‘denuclearisation first’ to ‘peace first’, with an emphasis on restarting dialogue. Lee also embarked on an 11-day tour of the US, Latin America and Germany, positioning South Korea as a global AI and semiconductor hub while seeking to strengthen economic security through partnerships with resource-rich Global South countries. In Brasilia on 27 July, Lee and President Lula agreed to resume negotiations on a South Korea–Mercosur trade agreement.
In Taiwan, food safety emerged as a dominant political issue after it was revealed that a widely used cooking oil contained carcinogenic substances. Trailing the ruling DPP in public favourability (41 per cent to 30 per cent), the KMT has sought to capitalise on the controversy ahead of local elections later this year, accusing the DPP government of attempting a cover-up. Meanwhile, Taiwan’s armed forces are preparing for the annual Han Kuang exercises, beginning on 5 August, which will coincide with civil defence and reserve mobilisation drills. The drills are part of ongoing efforts to enhance civil-military integration.
In Hong Kong, national security police arrested five people linked to two independent bookstores on suspicion of selling “seditious” publications. The raids highlighted the widening application of national security laws to the territory’s publishing sector. Meanwhile, 2026 is on track to become a record year for IPOs, driven largely by mainland Chinese technology firms. The rebound reinforces Beijing’s efforts to position Hong Kong as China’s principal international financial gateway, albeit one increasingly integrated with the mainland economy.
The Pacific
Micronesia has seen a significant increase in digital connectivity following the rollout of World Bank-backed undersea cable infrastructure, with internet access expanding rapidly across the region. With access increasing approximately twenty-fold, the government is seeking to translate greater connectivity into economic development and improved public services.
The US confirmed the deployment of the Dark Eagle hypersonic missile system to Guam, significantly enhancing long-range strike capabilities in the Western Pacific as part of wider deterrence efforts against China. Kiribati secured an USD 11 million Asian Development Bank (ADB) grant to strengthen health services while also taking delivery of a second Embraer aircraft financed through China.
Nauru’s announcement that it plans to establish an embassy in Jerusalem is prompting leading Pacific voices to question its financing. With a population of just 12,000 and no resident high commission in New Zealand, it is unclear how one of the world’s smallest states can afford such a diplomatically significant undertaking.
Papua New Guinea continues to emerge as a focal point of strategic competition, with New Zealand concluding a new defence agreement with Port Moresby following Australia’s own security initiatives. Taiwan announced it would cease spot purchasing PNG liquefied natural gas following an order from Port Moresby that Taipei close its trade office, marking a further contraction of Taipei’s economic footprint as Beijing deepens its influence.
The Solomon Islands continue to balance relations between China and the United States. PM Jeremiah Manele welcomed renewed US engagement after Washington agreed to finance a key port project that had previously attracted Chinese interest, underscoring Honiara’s preference to diversify external partnerships rather than rely exclusively on Beijing.
In Vanuatu, the government rejected calls by traditional chiefs to replace the first female Secretary General of the Melanesian Spearhead Group with a male candidate, exposing tensions between customary authority, regional diplomacy, and governance norms. Tokelau has rejected New Zealand’s assertions that Wellington is expanding its authority over the territory’s fisheries, highlighting ongoing sensitivities around resource management and constitutional autonomy.
In Tonga, an investigation into allegations that Chinese nationals were operating an organised forced-marriage syndicate has placed renewed scrutiny on migration and law enforcement. The Chinese embassy in Tonga has dismissed this issue as a “transnational marriage dispute”. Tuvalu condemned China’s recent missile launch into the Pacific as inconsistent with regional security and environmental interests. It later highlighted its increasingly firm approach toward maritime enforcement by using a conservation NGO vessel as part of an operation to detain a Chinese fishing vessel accused of illegal activity within its waters.
Fiji further consolidated its position as a key partner for external powers following the signing of a landmark defence agreement with Australia aimed at expanding security cooperation amid growing Chinese influence. Suva also secured an USD 80 million Asian Infrastructure Investment Bank (AIIB) package to strengthen fiscal resilience and climate adaptation.
New Zealand announced plans to acquire armed strike drones, reflecting Wellington’s broader effort to modernise its defensive capabilities in response to a deteriorating regional security environment. In a separate development, a man has been arrested in Russia on accusations of spying for New Zealand.
Meanwhile, India and New Zealand upgraded bilateral ties through expanded cooperation spanning trade, defence, education, and critical technologies. More broadly, Pacific reactions to China’s recent intercontinental missile test are exposing divisions among island governments. While some publicly criticised Beijing, others remained notably restrained, highlighting the absence of a unified regional strategic position despite shared security concerns.
Tensions over maritime governance continue to shape the region, with France and Vanuatu’s ongoing differences over maritime boundaries highlighting the growing importance of jurisdiction, exclusive economic zones, and seabed resources as Pacific states navigate competing sovereignty claims and wider geopolitical pressures.
THE BEST OF 9DASHLINE
This month’s top reads explore how shifting patterns of power, resilience, and political leadership are reshaping the Indo-Pacific. A forum marking the United States’ 250th anniversary examines how uncertainty around US leadership is transforming both the liberal international order and the future of democracy in the region. Meanwhile, Dr Anisa Heritage argues that Washington’s expanding military presence requires a more coherent political and economic strategy to sustain long-term credibility with Indo-Pacific partners.
Elsewhere, domestic resilience and stability take centre stage. You-Hao Lai and Ren-Wei Chang argue that Taiwan should prioritise the resilience of its domestic communications infrastructure, drawing lessons from Ukraine that extend beyond satellites and undersea cables. In New Caledonia, Dr Paco Milhiet contends that the territory’s latest election has entrenched political deadlock, leaving unresolved divisions over independence as the primary obstacle to stability despite growing geopolitical interest.
Together, these articles highlight a region adapting to a more uncertain strategic environment, where resilience depends on effective institutions, credible partnerships, and domestic political capacity.
IN FORUM 250: THE FUTURE OF THE LIBERAL INTERNATIONAL ORDER IN THE INDO-PACIFIC
As the US marks its 250th anniversary, this two-part forum examines how growing uncertainty around US leadership is reshaping both the liberal international order and the future of democracy in the Indo-Pacific. While Washington has long underpinned the region’s security architecture and democratic agenda, its changing foreign policy is accelerating a shift toward a more fragmented, plural, and locally driven regional order.
Dr Jagannath Panda argues that the liberal international order is evolving into a more nationalist and transactional system, while Dr Kei Koga contends that declining confidence in US reliability is driving Indo-Pacific states to hedge and diversify their partnerships. Dr Kristi Govella highlights an increasingly fragmented institutional landscape in which regional actors have greater agency to shape the future. Dr Alfred Gerstl argues the EU’s greatest contribution will be as a provider of economic opportunities, while Dr Lai-Ha Chan suggests Indo-Pacific middle powers are building more pragmatic partnerships.
IN FORUM USA250: THE FUTURE OF LIBERAL DEMOCRACY IN THE INDO-PACIFIC
Turning to democracy, Dr Indrajit Roy argues that democratic development in the region does not depend on US leadership, as Dr Nicole Curato highlights locally rooted democratic models. Dr Khoo Ying Hooi emphasises that civil society remains the primary source of democratic resilience, Dr Yoichiro Sato argues that democracy will ultimately depend on sustained grassroots efforts, and Céline Pajon contends that democratic cooperation must be pragmatic and deliver tangible benefits to remain credible.
NEW CALEDONIA’S ELECTION SETTLES LITTLE
New Caledonia’s June 2026 provincial election has done little to resolve the political deadlock that has shaped the French Pacific territory for decades. Dr Paco Milhiet argues that the vote largely reinforced an existing divide between pro- and anti-independence camps, leaving neither side with a governing majority. Rather than marking a turning point, the election highlights the persistence of an institutional impasse that continues to weigh on New Caledonia’s stability and economic recovery.
While New Caledonia has attracted growing international attention because of its strategic location, vast maritime zone, and significant nickel reserves, external powers have so far played only a limited role in shaping events. Despite concerns about Chinese influence and US interest, the territory’s greatest challenge remains domestic: the unresolved political divide on independence continues to drive instability more than geopolitical competition.
Continued uncertainty risks undermining the territory’s economy, delaying investment in its critical nickel industry, and weakening France’s credibility as an Indo-Pacific power. The central question is whether France and the people of New Caledonia can break a decades-long cycle of division before the strategic and economic consequences become even more severe.
UKRAINE’S REAL LESSON FOR TAIWAN’S COMMUNICATION RESILIENCE
Ukraine’s wartime experience is often cited as a model for strengthening Taiwan’s communications resilience, but You-Hao Lai and Ren-Wei Chang argue that policymakers have drawn only part of the lesson. While protecting undersea cables and expanding satellite capabilities remain essential, these measures focus on maintaining Taiwan’s connection to the outside world. The more pressing question is whether Taiwan’s domestic communications network could continue to support everyday life if those external links were severed.
Ukraine’s resilience has depended not only on international connectivity, but also on a decentralised domestic internet infrastructure allowing critical services to keep operating despite sustained attacks. Taiwan, by contrast, relies on a far more concentrated network and remains heavily dependent on overseas infrastructure, cloud services, and foreign servers for many of its most widely used digital platforms. This creates vulnerabilities that satellites alone cannot solve.
Taiwan should shift its focus from connectivity alone to the operability of its digital ecosystem. This includes testing whether critical services can function during a communications crisis, strengthening domestic internet exchange infrastructure, and requiring regular resilience exercises for essential platforms.
THE CASE FOR AN OVERARCHING US INDO-PACIFIC STRATEGY
The US has strengthened its military posture and regional partnerships across the Indo-Pacific, but Dr Anisa Heritage argues that these efforts remain fragmented without an overarching strategy. While recent initiatives have improved deterrence, the absence of a clear political and economic framework risks creating uncertainty among allies and partners about Washington’s long-term commitment to the region.
An effective Indo-Pacific strategy must extend beyond military planning to integrate diplomacy, trade, development, and regional institutions. A more coherent approach would reassure partners, strengthen burden-sharing, and better align US engagement with the diverse priorities of Southeast Asian and Pacific states, rather than focusing narrowly on great-power competition with China.
A more integrated strategy would allow the US to use its resources more effectively while maintaining the credibility that underpins regional deterrence. The central challenge is not simply sustaining military strength, but demonstrating the long-term political commitment needed to convince Indo-Pacific partners that the US remains a reliable strategic presence.
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Luana Correia, Daniel McIntyre, Liz Cherchia, Dr Manali Kumar, and David MacSweeney.
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