Southeast Asia Defence Trends
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Southeast Asia’s Rising Defense Spending and Shifting Alliances
Table of Contents
Analysis of the Lowy Institute’s Asia power Index reveals a notable increase in defence investment and evolving military partnerships across Southeast Asia, driven by regional tensions and great power competition.
The Scale of Investment and Regional Trends
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 wiht NATO’s two percent benchmark,but significant for developing economies facing competing social demands.
Drivers of Increased Spending
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 customary platforms alone cannot meet future threats.
The US-China Dynamic
Southeast Asia sits at the crossroads of US-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.
Multilateral and Bilateral Cooperation
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.
Cambodia and China’s Growing Influence