What Matters in Asia: the Lowy Power Index
On Tuesday the 18th of April 2023, the Australian Institute of International Affairs NSW welcomed Susannah Patton, Director of the Southeast Asia program at the Lowy Institute and Project Lead for the Asia Power Index, to discuss the distribution of power in the Indo-Pacific, from Pakistan in the west to the United States in the east.
Patton mentioned that the Asia Power index was established 5 years ago to measure the comparative power of 26 countries in Asia. The index breaks power into 8 measures, namely economic capability, military capability, resilience, future resources, economic relationships, defence networks, diplomatic influence and cultural influence. These 8 measures can be split into 2 categories: Resources & Influence. Resources are WHAT a country has, whereas influence is what a country DOES with what it has. All 8 measures are underpinned by 133 indicators which can be found on the interactive map on the Asia Power Index site.
Patton said that the ranking of the power index has been fairly consistent over the past 5 years with the US ranking as greatest power in Asia, contrary to any assumption that China has eclipsed the US in Asia. The past 5 years of data have not shown China on an unstoppable path to overtake the US. The gap currently sits at 80.7 to 72.5 percentage points, and has even grown in the past few years. But the gap between the US and China compared to the next few in line, Russia, India and Japan, is dramatic.
Patton then compared China and the US across the range of power dimensions, noting they have different advantages in the way they exert their power in the region. China remains the strongest in economic relationships, almost hitting a perfect score. The gap with the US in this dimension has grown for the past 5 years. On the defence networks measure, the US scores highest and China has made little progress in closing this gap. There are 2 measures where the US and China are closely matched: economic capability and diplomacy influence. Economic capability refers to more than just size. It includes international leverage, connectivity, and the fact that the US has the reserve currency. It was largely because of China’s sharp decline in connectivity with other states during COVID that the US took the top spot in economic capability. On all indicators that measure economic capability, China went backwards: flights into and out of China, number of tourists, students, migrants, flow of capital etc. As for Diplomatic influence, China exceeds the US on this measure, which also comes as a surprise finding due to China’s confronting relation with other regional players.
Of other powers in the index, Japan is in 3rd place at 37.2 points and India in 4th place at 36.3 points. They don’t rank as influential as most people would expect, and this has consequences for the regional order. A reason for India’s poor score is its economic relationships, which are low and declining. Its focus is on South Asia. Both the US and China are increasing their relations, which proportionally decreases others. In relation to defence networks, India doesn’t score very highly due to its non-alliance status. Even though they’re doing more in absolute terms, the power index is relative – hence they’re going backwards. The broad picture of Japan’s foreign investment shows that Japan is becoming a less important foreign investor in the region. This is because of Japan’s long-term slow growth and ageing population. But Japan is establishing itself as a more important security power in the region, even though its overall score remains low.
Patton highlighted a consistency amongst all countries: overall scores seems to be going backwards. She attributes responsibility to the COVID pandemic, which damaged a wide range of interactions. This particularly impacted the measure of resilience. One notable exception is Australia which came out with a comprehensive power score similar to when it went in. Australia ranks 6th in the Asia Power Index. This might come as a surprise to many Australians (who are also often surprised that Australia’s economy is the 14th largest in the world and that our defence spending is 12th highest). Our advantages include wealth, favourable demographics, being a large country with geopolitical security due to geography, and the ability to invest across the range of influence measures. The area where we do the best, however, is defence networks. We have the US alliance in addition to other countries in our region. In this, we scored second only to the US.
Patton went on to speak about smaller South-East Asian counties. Brunei and Cambodia scored quite positively, partly due to chairing ASEAN better than expected. Indonesia was highlighted amongst the most diplomatically active in the region contrary, to popular narrative. Patton noted, however, that QUANTITY does not equal QUALITY. She pointed to a secondary analysis – the power gap – which analyses whether countries over or underperform based on their resources. Japan is the biggest over-performer in the region, meaning they get a lot of bang for their buck. This is because they’re active across the range of influence measures; culturally influential, important security partnerships etc. The US, however, ranks as an underachiever; its influence is not as high as one would expect based on its resources.
Report by Bakar Mohamad, AIIA NSW intern
Susannah Patton (fourth from left) with AIIA NSW interns (from left) Bakar Mohamad, Roisin Browne, Ryan Lung,
Nadia Maunsell and Isobel Logan