Lowy Institute's Asia Power Index reveals two superpowers of influence

The Foundation's James To delves into the Lowy Institute's Asia Power Index 2023 and examines what countries are dominating the Indo-Pacific and who the up-and-comers are. In late March, the Centre for Strategic Studies and the Asia New Zealand Foundation welcomed Lowy Institute's Susannah Patton – director of the Southeast Asia Program and project lead for the Asia Power Index – to talk about the latest findings. Patton also provided insights into the shifting balance of power across Asia and the Indo-Pacific and what it means for foreign policy thinkers in Wellington and Canberra.
A line-up of Asian flags

The 2023 Power Index showed almost every country had lower levels of exchange and fewer cross-border exchanges from previous years

Since 2018, the Lowy Institute’s Asia Power Index has been a useful resource for better understanding how different countries across the Indo-Pacific stack up for influence in the region. It does this by comparing and contrasting 26 countries on their comprehensive national power over time: a calculus of economic and military resources, resilience, relationships and networks, as well as diplomatic and cultural influence.

Consistent with results from previous years, the 2023 Index shows two ‘super powers’ toping the poll by quite a margin: the United States and China. These two powers are in a league of their own when it comes to flexing their foreign policy influence, networks and convening power in the region.

There are a couple of striking findings with regards to these two powers. The first, is that China has been maximising its soft power in the Indo-Pacific. Senior Chinese officials have met with two thirds of their counterparts across the region and boasted the greatest number of diplomatic dialogues and summits at the leader/foreign minister level.

The second is that the United States is by far and away the most active in terms of a focus on defence  – ranking top in terms of its ‘hard-power' credentials, military alliances and security arrangements.

A jet fighter being loaded onto an aircraft carrier

The US remains by far and away the most active country in the region militarily

But few countries were immune to the wholesale drop in influence caused by Covid. Geo-political events aside, the Covid pandemic was clearly a driving force for more insular approaches to international relations in some form or another.

The 2023 Power Index shows almost every country had lower levels of exchange and fewer cross-border exchanges from previous years. Economically, this inward-looking trend is reflected in sharp falls of foreign direct investment.

Despite everything we’ve been hearing about the need for resilience and diversification during these turbulent times, the data shows the opposite has been occurring.

Of particular note are former heavyweights India and Japan – both having dropped from ‘major power’ status (rating 40 or more on the Index) into the ‘middle power’ category (ranging between 10 and 40 points) over the past couple of years.

Despite remaining prominent actors in the region, the 2023 Index shows Japan and India projected barely half the power that China and the US do.

The explanations for these downward dynamics are interesting.

While there may be plenty of expectations that a partnership with India will ultimately deliver (with Australia being a prime example of how taking a long-term, broad sector, resource-intensive strategy might pay dividends) the data suggests a ‘wait and see’ approach might be warranted.

On one hand, Indian Prime Minister Narendra Modi has been working hard to assert India’s standing across the Indo-Pacific – riding upon the sharpening geo-political momentum created by China’s rise through groupings such as the Quadrilateral Dialogue or ‘Quad’ (together with the US, Japan and Australia). On the other hand, the Power Index has crunched the numbers to reveal India’s limited economic integration and weaker defence networks.

For Japan, declining investments across the region (it’s no longer the top investor in Thailand, for example) has taken some of the shine off its international image. Moreover, Japan has been slow to show it's stepping up in the multilateral space – another factor contributing to the biggest fall in power of any country in the Index over the past three years.

Interestingly, Japan ranked first in terms of how its influence exceeded available resources to hand – in other words, being the top over-achiever in the Index. This ‘power gap’ was interesting, with Australia, Singapore and South Korea also being classed as influential over-achievers despite limited resources.

Japanese prime minister Fumio Kishida shaking hands with Philippine president Bongbong Marcos in front of the two nation's flags

In February this year, Prime Minister of Japan Fumio Kishida and Philippine president Bongbong Marcos  met for talks to strengthen relations amid growing concerns over China’s regional assertiveness

In terms of stars to look out for, which countries are the most likely rising powers across the region?

In Southeast Asia, Indonesia, Vietnam and Singapore are the clear leaders in terms of their diplomatic influence. But the one to keep an eye on is Indonesia, which is also ranked amongst the top three in the Power Index in terms of regional convening power.

As ASEAN Chair for 2023, Indonesia sits closely behind China on this measure, and far ahead of the US, which is in third place. The key lesson here? Major powers are important, but don’t take your eyes off rising middle powers – they hold influence.  

For New Zealand, we find ourselves exactly in the middle of the field in terms of projecting comprehensive national power – 13th out of 26. Under this measure, New Zealand, too, is classified a ‘middle power’ - just behind Vietnam but ahead of Taiwan. It is a hackneyed phrase, but at least on this indicator, the Asia Power Index aptly shows us ‘punching above our weight’.

The Foundation's Track II programme supports informal diplomacy with thinktanks in Asia on issues and challenges facing the region.