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About Documents
The concept of “political stability” fundamentally refers to a condition characterized by a lack of change in the political fundamentals or the absence of uncertainty within the political system. In other words, political stability suggests a low probability of significant political violence or unconstitutional transfers of power, which are inevitably projected to have consequential impacts on the economic activities.
To be precise, political stability is an indispensable prerequisite for long-term economic development. It fosters a stable environment conducive to business operations, investment, and even savings, all of which are critical determinants of a nation’s economic growth. Conversely, subpar economic performance can also serve as a catalyst for political instability. This is clearly exemplified by the past economic crises and hyperinflation in Venezuela, which directly incited massive political protests against the incumbent government.
For the purpose of analyzing political stability, the World Bank initiate the Worldwide Governance Indicators (WGI). This index is designed to encapsulate the perceptions of governance effectiveness across more than 200 countries globally, evaluated at various intervals since 1996, and assessed across six key dimensions.
The specific dimension employed to measure political stability is the “Political Stability and Absence of Violence/Terrorism (PV)” index. This indicator is specifically formulated to quantify the perceived likelihood of political instability, politically motivated violence, or terrorism. The index values range from -2.5 (least stable) to 2.5 (most stable).
These index figures do not solely reflect political factors alone, but also serve as a direct indicator of the perceived risks to business operations, asset security, and supply chain continuity. These elements are the fundamental bedrock for sustained long-term economic growth.
The countries within the Southeast Asia region exhibit significant disparities in the Political Stability index, ranging from nations with high political stability comparable to the world’s leading economies to developing countries facing considerable political volatility. Based on the data from 2023, the group of countries with high political stability includes Singapore (1.42) and Brunei (1.37). This high level of stability creates a distinct competitive advantage in attracting consistent and long-term Foreign Direct Investment (FDI).
Meanwhile, countries demonstrating moderate stability include Laos (0.81), Malaysia (0.17), Cambodia (0.04) and Vietnam (-0.04). Those experiencing volatility comprise Thailand (-0.28), Indonesia (-0.40) and the Philippines (-0.57). While Myanmar (-2.13) notably, registers a critically low index value, reflecting the profound political crisis it was confronting during that period.
The substantial divergence in the political stability indices across the Southeast Asia nations underscores the inherent limitations in fostering robust economic cooperation and establishing a unified regional trade policy.
Author:
Mr. Atit Saerepaiboonsub
Senior Researcher
International Institute for Trade and Development (ITD)
www.itd.or.th
Publication: Bangkok BIZ Newspaper
Section: First Section/World Beat
Volume: 39 Issue: 13016
Date: Wednesday, Oct. 22, 2025
Page: 8 (bottom-left)
Column: “Asean Insight”
