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Strategic Volatility and the Hub-and-Spoke Realignment: Measuring Geoeconomic Drift in Indonesia and Vietnam

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  • Cheng-Wen Lee
  • Shu-Feng Chiang
  • Avi Sunani

Abstract

This paper measures the structural realignment of Indonesia and Vietnam economies away from neutral multilateralism toward bilateral U.S.-centric dependency through the 2025 Trade Gambit and subsequent Middle East conflict. Using a novel Geopolitical Distance Metric (GDM) based on Jensen-Shannon Divergence, Poisson Pseudo Maximum Likelihood (PPML) gravity modeling, and Conditional Comparative Advantage (CCA) analysis, we demonstrate that Indonesia and Vietnam experienced measurable "geoeconomic drift" from January 2024 to March 2026. Unlike catastrophic trade war predictions, both countries maintained nominal export volumes but surrendered regulatory and resource sovereignty through "asymmetric reciprocity" arrangements. The March 2026 Strait of Hormuz blockade amplified these dependencies, revealing critical vulnerabilities in resource-based bargaining. Contemporary geoeconomic coercion creates "The Double Squeeze" - simultaneous compression of profit margins and supply chain logistics - establishing a qualitatively new form of economic interdependence. JEL classification numbers: F52, F53, F14.

Suggested Citation

  • Cheng-Wen Lee & Shu-Feng Chiang & Avi Sunani, 2026. "Strategic Volatility and the Hub-and-Spoke Realignment: Measuring Geoeconomic Drift in Indonesia and Vietnam," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 16(5), pages 1-7.
    • Handle: RePEc:spt:admaec:v:16:y:2026:i:5:f:16_5_7
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    JEL classification:

    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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