Modernisation Gives Islamic Revival New Momentum Across Southeast Asia

Faith Moves Through Markets, Phones and Public Life

Eighty four percent of Muslims in Malaysia and Indonesia pray five times daily, 53 percent regularly use prayer and Qur'an applications on their smartphones, and 85 percent of respondents in a regional survey expressed interest in a metaverse designed for Muslims. These figures capture a transformation across Southeast Asia: economic development and digital technology are providing new ways to practise and express Islam.

Malaysia and Indonesia, Southeast Asia's two largest nations with Muslim majorities, are at the centre of this shift. Religion is increasingly visible in political campaigns, legal codes, shopping decisions and social expectations. Malaysia's Prime Minister Anwar Ibrahim has even called for Islamic values to guide artificial intelligence, bringing religious ethics into discussions about one of the newest areas of economic competition.

For decades, governments approached the rise of Islam largely as a security issue. Terrorist networks and violent extremism dominated policy discussions, and forceful measures against terrorism successfully suppressed militant groups. The transformation now taking place operates mainly through peaceful institutions and everyday choices, rather than violence.

Southeast Asia is home to approximately 242 million Muslims, representing roughly 42 percent of its population. Indonesia alone has about 230 million Muslims, the world's largest Muslim population. Across this religious landscape, greater prosperity and connectivity are helping Islamic values reach deeper into public and private life.

Classical sociological theories often expected modernisation to make societies more secular, meaning that religion would have a smaller role in their institutions and daily routines. Malaysia and Indonesia illustrate a different process. Economic growth, digital networks and institutional reform can expand the channels through which people express faith, while also creating disagreements over whose interpretation should guide public life.

Trade and Pilgrimage Built Lasting Connections

Islam's presence in Southeast Asia stretches back more than a millennium. Arab, Persian and Indian traders carried the religion across the Indian Ocean, establishing footholds in port cities from Sumatra to Malacca long before European colonial powers arrived.

Commerce and Sufi missionaries were central to its spread through the archipelago. Unlike expansion driven by conquest in other regions, this process relied primarily on exchange and teachings adapted to local conditions. Sufi orders placed importance on mysticism and tolerance, helping create a tradition that accommodated local customs alongside orthodox religious practice.

Eric Tagliacozzo, Professor of Modern Southeast Asian History at Cornell University, describes the region's connections with the Middle East as varied. Religion was part of those relationships, alongside trade, pilgrimage and cultural exchange. His research on the Hajj, the Muslim pilgrimage to Mecca, documents journeys by Indonesian pilgrims since the 17th century.

Steamships transformed those journeys during the 19th century. A pilgrimage once largely accessible to an elite became a mass phenomenon as transport changed. Indonesia today sends more than 200,000 pilgrims annually to Saudi Arabia, more than any other country, sustaining spiritual connections that continue to influence religious orientation.

The contrast with Southeast Asia's more recent experience of bombings and insurgency is important to the current revival. The region's history contains both militant threats to stability and a much longer pattern of religious integration through travel, commerce and local culture.

• More than a millennium ago: Islam began establishing a presence through traders and religious teachers.
• 17th century: Indonesian pilgrims were travelling to Mecca.
• 19th century: Steamship travel helped turn the Hajj into a mass phenomenon.
• 2013: Brunei's Syariah Penal Code Order provided the framework for an expansion of Islamic criminal law.
• Late 2022: Anwar Ibrahim took office in Malaysia and made AI development part of his economic agenda.

Religious Priorities Shape Consumer Choices

Research by Wunderman Thompson Intelligence and the Muslim Intel Lab shows how closely religious observance and consumer behaviour have become connected. Ninety one percent of Muslim respondents in the region described a strong relationship with Allah as very important, while 34 percent prioritised wealth.

Thirty three percent described themselves as more observant than their parents. Together with the finding that 84 percent of Muslims in Malaysia and Indonesia pray five times daily, that result points to a revival that reaches into family life as well as the marketplace.

Halal refers to what is permissible under Islamic rules. Its commercial reach extends beyond food to Islamic finance, travel suited to Muslim needs and religious media. Malaysia and Indonesia rank among the top four global halal markets, alongside Saudi Arabia and the United Arab Emirates, according to the Global Islamic Economy Indicator.

Malaysia has maintained its leading position through a 20 percent increase in investment in funds compliant with Shariah, or Islamic law, and the success of Islamic educational content for children. Those developments connect financial decisions and family entertainment with religious priorities.

Sixty one percent of Southeast Asian Muslims factor halal certification into their preferences for banking and investment. Seventy seven percent consider the availability of halal facilities when choosing travel destinations. Companies serving these consumers face demand for religious compatibility across a journey or financial service, as well as in individual products.

The figures also show the relative strength of the priorities respondents expressed. The 91 percent who considered a strong relationship with Allah very important exceeded the 34 percent prioritising wealth by 57 percentage points. Religious devotion and economic activity nevertheless operate together: consumers bring their beliefs into decisions about where to spend, save and travel.

Digital Tools Become Part of Religious Practice

Smartphones offer another route through which modern life supports faith. Fifty three percent of Muslims in the research regularly used prayer and Qur'an applications. Religious practice can therefore travel with users through the same devices they rely on for other daily activities.

The 85 percent expressing interest in a metaverse specifically designed for Muslims suggests demand for religious identity in emerging digital spaces too. A metaverse is a shared virtual environment in which people can interact through digital representations of themselves.

Prayer applications and interest in virtual environments describe different stages of engagement: one measures regular use, while the other measures interest. Together, they show that technological change is entering religious life through both established tools and imagined new services.

Malaysia's success with Islamic educational content for children places media within the same pattern. Religious expression is reaching consumers through screens and commercial services, alongside mosques, family traditions and other familiar settings.

Anwar Brings Islamic Ethics Into the AI Debate

Anwar Ibrahim has urged software developers to infuse artificial intelligence systems with Islamic values, arguing that this would help ensure technology serves humanity ethically. Since taking office in late 2022, the Malaysian prime minister has prioritised AI development as part of his economic agenda.

Artificial intelligence systems use computational methods to recognise patterns and produce outputs. Anwar's proposal connects the design of those systems with moral choices: religious principles would help guide how technology makes or supports decisions.

Islamic law contains different interpretations across schools of thought and cultural settings. Critics of the proposal note that putting one theological framework into a machine learning system could give a particular doctrinal perspective authority that other Muslims do not share. Non Muslim minorities could also find that approach exclusionary.

The practical debate concerns which values would be selected and how they would become rules for a digital system. Anwar's proposal presents a direction for technology policy; no implementation date was given.

Malaysia's debate reflects a wider tension in the region. Governments want technological development that helps them compete globally, while conservative religious constituencies want that development to remain compatible with Islamic principles. The resulting pressure reaches across finance, education and digital infrastructure, making religious identity part of institutional modernisation.

Aceh Exposes a Dispute Over Local Traditions

Aceh, Indonesia's only province governed by Sharia law, offers a concrete example of conflict between religious orthodoxy and local custom. Authorities expelled a rain shaman hired by state construction firms to prevent rainfall during the National Sport Games.

Religious figures condemned the shaman's Javanese folk rituals as shirk, meaning polytheism or associating other powers with God. They remained silent about similar mystical practices such as ruqyah, an Islamic exorcism practice using Arabic terminology.

The incident illustrates a continuing contest between abangan Muslims, who incorporate local mysticism into their faith, and santri puritans, who seek to remove influences they regard as outside orthodox Islam, including those that are not Arabic.

Aceh's dispute centres on the boundary between accepted religious practice and rejected local ritual. The rain shaman had been brought into a modern public event by state construction firms, placing an older cultural practice directly inside an institutional setting.

The disagreement also connects with the region's history of adaptation. Customs that some Muslims see as part of a locally rooted religious tradition can be treated by others as incompatible with proper belief. Modern institutions become places where those competing views are enforced or contested.

Brunei Uses State Power to Define Religious Boundaries

Brunei's absolute monarchy provides a different model of Islamisation led by the state. Its Syariah Penal Code Order 2013 expanded Islamic criminal law to include non Muslims and introduced corporal punishments for offences ranging from robbery to adultery.

Brunei's Melayu Islam Beraja ideology, meaning Malay Muslim Monarchy, connects religion with royal authority and national identity. Criticism of religious authorities or the Sultan's religious decrees is criminalised, restricting public challenges to the state's religious policies.

The code provides for imprisonment of up to five years for contradicting official Islamic interpretations. Religious authority is therefore backed by penalties directed at dissent as well as by rules governing other conduct.

Malaysia's Islamic legal assertions generate public debate. Brunei's system instead suppresses that debate, creating a religious environment in which internal discussion cannot openly challenge state policy. The difference matters because the growth of religion in public life can take distinct institutional forms, even among neighbouring Muslim societies.

Nahdlatul Ulama Promotes a Locally Rooted Alternative

Nahdlatul Ulama, Indonesia's largest Islamic organisation, promotes Nusantara Islam as an alternative to increasingly strict religious interpretations. With approximately 60 million members, NU presents a framework centred on moderation, pluralism and compatibility with democratic values.

Nusantara refers to the archipelago. NU argues that Indonesian Islam developed through peaceful dialogue with local cultures rather than conquest, producing a tradition that values tolerance and rejects extremism. Its approach accepts the importance of local identity while maintaining religious practice.

NU sets out six pillars for that approach:

• Promoting peace over violence.
• Adapting to local traditions without syncretism, or blending different religions into a single belief system.
• Relying on civil society rather than state power.
• Reconciling Islam with nationalism.
• Affirming equal citizenship regardless of religion.
• Rejecting radicalism.

NU leaders describe this as an alternative to both Middle Eastern fundamentalism and Western secularism. Love for the homeland, in their view, forms part of faith itself. National belonging and religious commitment can exist together.

Joko Widodo endorsed this philosophy as president, expressing a vision that distinguished Indonesian religious practice from more rigid interpretations:

Our Islam is Nusantara Islam.

NU has taken the message beyond Indonesia by hosting summits of moderate Islamic leaders. It has proposed that Southeast Asia, rather than the Middle East, could become a cradle of religious reform in the Muslim world.

The Islamic Defender Front and Hizbut Tahrir Indonesia oppose Nusantara Islam because it accepts national identity and local customs as compatible with religious practice. Their opposition makes the debate a contest within Muslim society over how faith should relate to culture, citizenship and political authority.

Palestinian Solidarity Connects Faith and Foreign Policy

Indonesia, Malaysia and Brunei maintain no formal diplomatic relations with Israel and prohibit Israeli citizens and companies from entering under normal circumstances. Their stance combines religious solidarity with Palestinians and sentiment against colonialism rooted in Southeast Asia's own experience of Western domination.

The three countries support Palestinian statehood and host Palestinian diplomatic missions. They also provide educational and work opportunities for Palestinians, giving the political commitment a practical dimension beyond diplomatic statements.

Mahathir Mohamad, during his recent tenure as Malaysia's leader, consistently denounced Israeli policies and described Israel as the root cause of world instability. Such positions show how Islamic identity can translate into foreign policy choices that diverge from those of Western allies.

Popular solidarity extends beyond government policy. The Palestinian cause serves as a unifying issue across ethnic and national boundaries. Religious organisations frame it as the defence of Islamic holy sites, while political leaders stress shared experiences of colonial subjugation.

The position has continued across different administrations and domestic political settings. That continuity makes support for Palestine a durable feature of Southeast Asian Islamic political identity, constraining efforts to normalise relations with Israel even where normalisation might offer economic or strategic benefits.

Malaysia, Indonesia and Brunei demonstrate how the religious revival reaches far beyond personal observance. Consumer markets and digital tools create new outlets for faith; legal systems determine how religious authority is exercised; and foreign policy carries religious solidarity into international affairs. NU's defence of pluralism and local culture shows that Muslims within the region continue to contest the direction of that change.

What to Know

• Islam's growing public role in Southeast Asia is increasingly expressed through peaceful political, legal, commercial and digital channels.
• The region has approximately 242 million Muslims, about 42 percent of its population; Indonesia has about 230 million.
• Research found that 84 percent of Muslims in Malaysia and Indonesia pray five times daily and 33 percent described themselves as more observant than their parents.
• Malaysia and Indonesia rank among the top four global halal markets, alongside Saudi Arabia and the United Arab Emirates.
• Fifty three percent regularly use prayer and Qur'an apps, while 85 percent of respondents expressed interest in a metaverse designed for Muslims.
• Anwar Ibrahim has urged developers to incorporate Islamic values into AI, bringing differing religious interpretations into the technology debate.
• Aceh's rejection of a Javanese rain shaman and Brunei's religious criminal laws illustrate different ways authorities police religious boundaries.
• Nahdlatul Ulama promotes Nusantara Islam through peace, local cultural adaptation, civil society, nationalism, equal citizenship and rejection of radicalism.
• Indonesia, Malaysia and Brunei support Palestinian statehood and maintain no formal diplomatic relations with Israel.