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Southeast Asia is entering a period of intensifying strategic competition. The region’s governments are increasing military spending and broadening defence partnerships in response to external pressures and internal vulnerabilities.
Findings from the Lowy Institute’s Asia Power Index and its recent report Southeast Asia’s Evolving Defence Partnerships highlight both the scale of investment in defence and the shifting web of military relationships shaping the region’s security future.
Lowy’s Asia Power Index ranks countries on their ability to generate and sustain military power. While Southeast Asian states remain far below major powers such as the United States, China, and Japan in raw spending, the trajectory in the region shows a clear upward trend.
Defence procurement and research in Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam rose by US $2.7 billion between 2022 and 2024. On average, defence expenditure hovers around 1.5 percent of GDP—modest compared with NATO’s 2 percent benchmark, but significant for developing economies facing competing social demands.
What stands out is not just the level of spending but the drivers behind it. Rising tensions in the South China Sea, uncertainty over Taiwan, and global conflicts with ripple effects in Asia have forced governments to modernise their militaries. Budgets increasingly prioritise high-end capabilities such as submarines, drones, and cyber-warfare systems, reflecting recognition that traditional platforms alone cannot meet future threats.
The Strategic Calculus: Balancing Great Powers
Southeast Asia sits at the crossroads of U.S.–China competition. For regional states, defence spending is only part of the response; the other is cultivating a wide range of security partners.
The Lowy Institute’s partnership index ranks the United States as the region’s most important defence partner, followed by Australia and Japan. China, despite its growing military might and active diplomacy, ranks only eighth in terms of formal defence ties. This imbalance underscores how most Southeast Asian states continue to view Washington and its allies as critical for balancing Beijing, even as they engage China economically.
One enduring multilateral mechanism is the Five Power Defence Arrangements (FPDA), linking Australia, Malaysia, New Zealand, Singapore, and the UK. Established in 1971, the FPDA continues to conduct regular joint exercises and has expanded into newer areas such as counter-terrorism, cyber-defence, and humanitarian assistance. Its longevity shows the value of long-term institutionalised defence cooperation.
At the bilateral level, Singapore’s defence relationship with the United States exemplifies how regional states hedge. Joint exercises, training access, and cooperation on new domains like unmanned systems highlight how smaller states leverage partnerships to build capacity without overcommitting politically.
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-Asia Media Centre
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