Nusantara

The Socialist Union of Nusantara is a (cough) socialist country in southeast Asia, bordered by Australasia in the south and east, and Malaya in the west and north.

Formed during the height of the Cold War in the concluding decades of the 20th century in the Indonesian Revolution, Nusantara is the youngest member of the Third Communist International. Thus, the country continues to be rather militarized and repressive, owing to ongoing border flareups and insurgencies as well as the threat of Australasia.

Etymology
Nusantara is an Old Javanese word derived from nūsa, meaning 'island' and antara, 'between'. It originally meant "outer islands" or "other islands" (in the sense of "islands beyond Java in between the Indian and Pacific Oceans"), referring to the islands outside of Java under hegemony of the Majapahit Empire.

In its modern usage, however, refers to the union of the Malayan peoples, eschewing the term "Indonesia" due to the foreign origin and ambiguity with India. The name reflects the continued claim by the Nusantaran leadership for the union of the Indonesian Archipelago under the red banner.

The interwar period
With the victory of the Reds in the Second American Revolution, the underground Partai Komunis Indonesia started to usurp non-cooperative nationalists, with many nationalists believing that a Communist world revolution would be conducive for national liberation. This culminated in the July Insurrection (Pemberontakan Juli) in 1935, which threatened the Dutch colonial govenrment until its suppression by the Japanese Empire in January 1936. The PKI leadership fled abroad, driven back underground or arrested and interned in Boven Digoel.

Japanese occupation and puppet government
Sukarno is a Marxist ITTL so M.H Thamrin and Soepomo as Japanese collaborators

Annexation of British Malaya in WW2 into Indonesian puppet government