Liberalism vs Strategic Realism in Asia

For the past decade, there has been a global debate among international relations scholars on the reasons for the breakdown of the current liberal-based international order. First, let’s discuss the overall function of the current global order. The order essentially emphasizes the following major factors: open-market predictability, transparency, economic openness, and protection of intellectual property. Overall, the rules-based liberal international order has evolved from the General Trade Agreement of Tariffs and Trade into the World Trade Organization.  Overall, scholars often explain these changes through competing theoretical perspectives in international relations, but the two main ones are liberalism and realism. Some scholars often explain the situation as a loss of relevance of the global order, driven by major power shifts from the West to non-Western powers, such as China. On the other hand, other scholars argue that the breakdown of the liberal order is due to the weakening of international institutions, which has increased uncertainty and diminished confidence and commitment to multilateral cooperation. While these perspectives offer competing explanations for the erosion of the liberal order, their implications are most visible in the shifting behavior of major powers. As uncertainty grows, states increasingly revert to realist patterns of behavior, where competition, security concerns, and power balancing begin to override institutional commitments.

Realists ultimately believe that the global order is inherently one of self-interested states, in which states are always concerned with their own security and survival. There have been many subversions to how realism essentially looks, but for this blog, I will be touching on Meirsheimer’s version of realism. He argues that states, in a sense, are “anarchic,” but in a way where there is no higher power, meaning that it’s every state for itself and there’s no real authority to save them when things go wrong.  This “anarchic” logic creates self-interested behavior, leading states to adapt and plan how they engage with the global order. Each state’s government is not to move blindly, assuming others have bad intentions, but they also still have in mind that other nations are not to be fully trusted. State alliances are seen as “temporary weddings,” as one state could cheat on the other the next day if it felt it was necessary. A core belief is that every state has the option to harm those surrounding it if it wanted to, even without any military capability. Unironically, they believe that as long as its citizens have their feet and arms, they have the ability to do harm to others. From this perspective, institutions like the United Nations don’t carry as much weight as they seem to. Realists argue they reflect power more than they shape it. Major states use them when it suits their interests, not because they feel bound by them. What matters more is a state's power and how it uses it. In theory, applying this realist logic creates a “self-help” world, where survival and the security of the state depend solely on the state itself and on constantly acting cautiously. States, in this “self-help” world, would rather feel insecure and fight for the upper hand when they see another state has a greater resource advantage. A real-world example of this could be seen with the United States and Iran. Essentially, the United States is initiating war with Iran due to Iran’s upper hand in oil, reflecting how states look at power in terms of material power. 

However, in a liberal institutionalist view, in theory, there are rules to prevent states from overtaking each other's power, and this Iran-U.S. war is the quintessential example of this predicament. In contrast to realism, liberalism takes on a rather optimistic view of why cooperation occurs among states. Rather than viewing institutions as mere reflections of material power, liberal institutionalist scholars argue that political beliefs, through institutions and shared political norms, shape state behavior and help determine whether international politics lead toward conflict or cooperation. According to a popular liberal institutionalist scholar, John G. Ikenberry, he argues that liberal institutionalism was essentially built around commitments to ethical ideals, such as economic openness, multilateral cooperation, and institutionalized governance among major democratic states. Even after the collapse of the Soviet Union in 1991, he argues that this institutional framework continued to shape international politics because it had already become deeply embedded in global governance and the global order. Within this liberal foundation, states face what scholars describe as a “prisoner’s dilemma,” in which each state must decide whether to cooperate or cheat in pursuit of its own self-interests. Liberal institutionalists argue that rules would make states realize that “short-term sacrifices” would infringe upon “long-term gains” in the bigger picture, thus resolving the prisoners’ dilemma. Liberal scholars explain that each side benefits from cooperation and define this as “goal-directed behavior that entails mutual policy adjustments so that all sides end up better off than they would otherwise be” (Meirsheimer). 

While most states in the global order adopt on single international relations theory, Singapore has established itself by adapting to the ever-changing global political environment through a hybrid approach: both realism and liberal institutionalism. As Singapore’s growth to prosperity had evidently shown, the state had prioritized trade and foreign firms, while at the same time maintaining tight control over land, finance, the military, and domestic companies to ensure survival as a vulnerable, small-sized middle power state. And for the longest time, this approach yielded success; however, that was when the rules-based liberal international order was stable and predictable. Now, the global environment has made it harder for the long-standing global order to sustain, as the economic and security interests of surrounding states are starting to pull in different directions. In the short term, Singapore can continue to re-emphasize the state’s support for a rules-based order, but in the long term, its choices will inevitably be influenced by the larger power. This change won’t appear sudden, but rather gradually and not obviously. In the future, we have yet to see these unfold, including how the state will maneuver in trade, how Singapore will respond to China-led projects, and how the state will position itself within the region. It is unlikely that Singapore will allow the public to see that they are taking a side; however, over time, Singapore will move closer to China’s political position. This will be done more for practical considerations than ideological ones, which is what most Asian states are currently doing - they reside and support states not out of belief in their system, but for what’s best for their independent nations. 

Indonesia follows the same approach, combining realism and liberal institutionalism; however, it leans towards realism in its foreign policy and security, prioritizing sovereignty. This is most visible in how it responds to external pressure. In areas like the Natuna waters, Indonesia has taken a firm stance on territorial control, increasing patrols and reinforcing its presence rather than relying on external guarantees. Its approach reflects a broader reluctance to depend on other states for security, consistent with a self-help logic. At the same time, this realist posture does not mean Indonesia rejects cooperation. It remains deeply engaged in regional institutions such as ASEAN, where it plays a leading role in shaping dialogue and maintaining stability in Southeast Asia. Rather than viewing institutions as constraints, Indonesia uses them as tools to manage tensions and reduce the risk of escalation, especially in a region influenced by larger powers. This dual approach also appears in its broader foreign policy strategy. Indonesia avoids formal alliances and instead maintains flexibility, engaging with multiple partners without committing too closely to any single power. This allows it to preserve strategic autonomy while still benefiting from economic and diplomatic cooperation. In this sense, Indonesia’s foreign policy reflects a balance: realist in its emphasis on sovereignty and security, but supported by liberal mechanisms that help stabilize its external environment.

In order to succeed in the global rules-based international order, it’s inevitable for an individual state to take on a liberal approach to handling things. North Korea is the perfect case study for this, as the state is notoriously known for inherently rejecting all of the ideals and principles that liberal institutionalism stands for. Its economic trajectory reflects this clearly. By closing off its borders and limiting engagement with global markets, North Korea has cut itself off from the flows of trade, investment, and technology that drive growth elsewhere. Economic openness, which is central to the liberal order, is largely absent. Instead of integrating into global supply chains or attracting foreign capital, the state relies on tight internal control and selective, often informal channels of exchange. This isolation has contributed to long-term economic stagnation and decline. Industrial output remains weak, infrastructure is underdeveloped, and shortages of basic goods have been recurring issues. While sanctions imposed through institutions such as the United Nations play a role, the deeper constraint lies in the state’s own rejection of openness. Restricting trade and limiting cross-border movement, it reduces opportunities for productivity growth and economic diversification. In this sense, North Korea illustrates the costs of stepping outside the liberal economic system. Without openness, the economy struggles to sustain growth, reinforcing a cycle where security concerns dominate while economic development remains constrained.

The hybrid approach many Asian states take, blending liberal openness with realist caution, shows up clearly in how businesses decide where to invest. On one hand, governments promote open markets, stable regulations, and participation in global trade networks to attract foreign capital. This creates the predictability firms look for when committing long-term investments. On the other hand, these same states remain careful about security risks, strategic industries, and overdependence on any single external partner. For investors, this creates a layered environment. Countries such as Indonesia and Singapore remain attractive because they offer access to regional markets and relatively stable institutions, but firms also have to account for geopolitical risk. Supply chains are no longer built on efficiency alone. Companies now consider exposure to major power tensions, potential sanctions, and regulatory shifts tied to national security concerns. This is why there has been a gradual diversification of supply chains across Southeast Asia, rather than heavy concentration in a single country. 

This dynamic directly links international relations to economic development. States that manage this balance well tend to sustain growth more effectively. By staying open enough to attract investment while maintaining strategic autonomy, they create an environment where businesses feel both opportunity and security. In contrast, states that lean too far in either direction face trade-offs. Excessive openness without security considerations can expose them to external shocks, while excessive isolation limits access to capital, technology, and markets. In this way, foreign policy is not separate from economic outcomes. Decisions about alliances, trade agreements, and institutional participation shape investor confidence, capital flows, and ultimately long-term development. The hybrid model seen across much of Asia reflects an attempt to navigate this tension, using liberal tools to drive growth while relying on realist strategies to manage risk in an uncertain international environment.