Lowy Institute Asia Power Index 2018 · EXECUTIVE SUMMARY Key findings from the inaugural 2018...
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Transcript of Lowy Institute Asia Power Index 2018 · EXECUTIVE SUMMARY Key findings from the inaugural 2018...
EXECUTIVE SUMMARY
Key findings from the inaugural 2018 Index include:
i The United States remains the pre-eminent power in Asia.
i China, the emerging superpower, is rapidly closing in on the United States.
i Japan and India share major power status: Tokyo is a smart power, while New Delhi is a giant of the future.
i �North�Korea,�Russia�and�Taiwan�are�misfit�middle�powers� in Asia.
i Singapore, Australia and South Korea are overperformers in the region.
POWER IN THE ASIAN CENTURY
Global wealth and power are shifting eastwards.
Three of the world’s four largest economies are in Asia, and the fourth, the�United�States,�is�a�Pacific�power.�By�2025,�two-thirds�of�the�world’s�population will live in Asia, compared with just over a tenth in the West.
Asia’s economic transformation is reshaping the global distribution of power, changing the way the region — and indeed the world — works politically�and�strategically.�Just�as�significantly,�tensions�between�Asian�powers�will�define�war�and�peace�in�the�twenty-first�century.�
The Lowy Institute Asia Power Index is an analytical tool to track changes in the distribution of power in the region. It aims to sharpen the debate on geopolitics in Asia.
The�Index�ranks�25�countries�and�territories�in�terms�of�their�capacity�to influence regional events — reaching as far west as Pakistan, as far north�as�Russia,�and�as�far�into�the�Pacific�as�Australia,�New�Zealand�and the United States.
The project evaluates state power through 114 indicators across eight thematic measures: military capability and defence networks, economic resources and relationships, diplomatic and cultural influence, as well as resilience and future trends.
A specially designed digital platform allows users to explore variations in power projection within and between countries. Annual editions of the Index will track how the distribution of power in the region shifts over time.
The Lowy Institute Asia Power Index is an analytical tool to sharpen debate on power
dynamics in Asia.
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HOW IS POWER MEASURED?
The Index consists of eight thematic measures of power which fall into two broad dimensions:
Influence measures
The other four measures of the Index – diplomatic influence, economic relationships, defence networks and cultural influence –
assess a country’s active levels of influence, principally in other Index countries, lending the Index its Asian focus.
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Resources measures
The�first�four�measures�of�the�Index�–�economic resources, military capability, resilience and future trends – provide
assessments of a country’s material capabilities and robustness, which are requisite factors in the exercise of power.
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HOW IS POWER MEASURED?
Core economic strength and the attributes of an economy with the most geopolitical relevance; measured in terms of GDP at purchasing power parity (PPP), international leverage, technological sophistication and global connectivity.
Size: This sub-measure looks exclusively at GDP, which is the total�value�of�all�final�goods�and�services�produced�annually� within an economy. PPP exchange rates are used to allow for a reliable comparison of real levels of production between countries.
International leverage: Resources that give the state or territory enhanced�financial,�legal,�and�sanctioning�powers�abroad.�These�include global corporations and internationalised currencies, as well as sovereign wealth funds, export credit agencies, and official�reserves.
Technology: Technological�and�scientific�sophistication�of�Index�economies. This is measured through indicators such as labour productivity, high-tech exports, supercomputers, and input variables including R&D spending.
Connectivity: Linkages to the global economy, including through international trade, global inward and outward investment flows, merchant fleets, and international aviation hubs.
For�the�purposes�of�this�Index,�power�is�defined�as�the�capacity�of�a�state or territory to direct or influence the behaviour of other states, non-state actors, and the course of international events. At its most rudimentary,�power�is�the�capacity�to�impose�costs�and�confer�benefits�that shape the choices of other states.
A country’s overall power is its weighted average across eight measures of power, each of which consist of a number of sub-measures:
ECONOMIC RESOURCES
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Autonomous military strength; measured in terms of defence spending, armed forces and organisation, weapons and platforms, signature capabilities and Asian military posture.
Defence spending: Annual spending on military forces and activities. This sub-measure looks at current resources devoted to maintaining, renewing, replacing, and expanding military capability, measured in terms of military expenditure at prevailing market exchange rates and at notionally estimated defence-sector PPP rates.
Armed forces: Total active military and paramilitary forces, readiness, and organisation. This sub-measure is principally focused on the size of armed forces, but also takes account of their combat experience, training, and preparedness, as well as command and control structures.
Weapons and platforms: Stock of land, maritime and air warfare assets and capabilities. This sub-measure consists of a number of proxy indicators for capability across the three domains and assesses the sophistication of weapons and platforms.
Signature capabilities:�Capabilities�that�can�confer�significant�strategic and tactical advantages. These include nuclear weapons capabilities and missile ranges, long-range maritime force projection, and area denial, as well as intelligence and cyber capabilities.
Asian military posture: This sub-measure consists of qualitative assessments of the ability of armed forces to deploy rapidly and for a sustained period in the event of either a maritime or continental�military�confrontation�in�the�Asia-Pacific�region.
HOW IS POWER MEASURED?
MILITARY CAPABILITY
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The capacity to deter real or potential threats to state stability; measured in terms of a country’s geoeconomic security, geopolitical security and internal institutional stability.
Geoeconomic security: The capacity to withstand external attempts to sanction or destabilise a state or territory’s economy. This sub-measure looks at an Index country’s diversity of export products and markets, dependency on its primary trade partner and�global�trade,�energy�self-sufficiency,�and�supply�of�rare� earth metals.
Geopolitical security: Geographic, demographic and political variables that enhance territorial security and homeland defence. This sub-measure includes indicators such as population size relative to neighbours, geographic deterrence based on landmass, as well as the number of active border disputes and past interstate conflicts with direct neighbours.
Institutional stability: Government effectiveness, political stability, and absence of internal conflict. This sub-measure includes indicators on governance, levels of civil unrest, history of internal conflict, and infant mortality rates.
The projected distribution of economic, military and demographic resources in 2030, which play into perceptions of power today; measured in terms of GDP, military expenditure and working-age population forecasts.
Economic size 2030: Forecast of GDP at purchasing power parity�in�2030.�
Military expenditure 2030: Projected military expenditure in 2030�at�a�notionally�estimated�defence-sector�PPP�rate,�based� on a constant share of GDP.
Working-age population 2030: Forecast of working-age population�(15–64)�in�2030.
HOW IS POWER MEASURED?
FUTURE TRENDS
RESILIENCE
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The extent and standing of a state’s diplomatic relations; measured in terms of a country’s diplomatic network, involvement in multilateral institutions and clubs, and overall foreign policy stewardship.
Diplomatic network: This sub-measure looks at embassies within the region and globally, the number of regional consulates and�other�representative�offices,�and�the�efficacy�of�diplomatic�services and wider foreign policy bureaucracies.
Multilateral power: Participation and clout in multilateral forums. This sub-measure examines voting shares in multilateral development banks, membership in regional intergovernmental organisations, and inclusion in diplomatic clubs and summits.
Political leadership: This sub-measure consists of qualitative assessments�of�the�efficacy�of�government�leaders�in�advancing�their state or territory’s diplomatic interests, both regionally and globally.
The capacity of states to exercise influence through economic interdependencies; measured in terms of trade relations, investment ties and economic diplomacy.
Regional trade relations: The ability to influence other Index economies through trade dependencies. This sub-measure focuses on trade flows within the region, the number of Index countries in which the state or territory is the primary trade partner, and an economy’s relative importance as an importer and exporter in regional supply chains.
Regional investment ties: An Index country’s foreign investor clout in other Index economies. This sub-measure focuses on stock foreign direct investment within the Index region, the number of Index countries in which the state or territory is the primary foreign direct investor, and average shares of foreign investment across Index countries.
Economic diplomacy: The willingness and ability of Index states and territories to seek greater economic and political alignment with other countries, in the region and globally. This sub-measure tracks economic diplomacy through free trade agreements and outward foreign assistance flows.
HOW IS POWER MEASURED?
ECONOMIC RELATIONSHIPS
DIPLOMATIC INFLUENCE
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Defence partnerships that act as force multipliers of military capability; measured through assessments of alliances, non-allied partnerships and arms transfers.
Regional alliance network: Number, depth, and combined strength of defence alliances in the Index region, measured in�terms�of�codified�security�guarantees,�military�personnel�deployed in Index countries, joint military training exercises, arms procurements from allied partners, and years fought together in conflicts.
Regional non-allied partners: Diversity and depth of non-allied defence partnerships in the Index region, measured in terms of defence consultation pacts, foreign deployments between non-allied defence partners, joint military training exercises, years fought together in conflicts, and arms procurements from non-allied Index countries.
Global arms transfers: Arms trade patterns indicative of global military influence and partners, measured in terms of annual arms trade flows and number of arms export recipients�over�a�five-year�period.�
The ability of countries to shape international public opinion through cultural appeal and interaction; measured in terms of cultural projection, information flows and people exchanges.
Cultural projection: International cultural ubiquity and regional reputation of Index countries. Indicators for this sub-measure include regional search trends on Google, exports of cultural goods and services, global brands, and proxies for international status, including visa-free travel for citizens, prestige skyscrapers in�financial�capitals,�and�UNESCO-listed�world�heritage�sites.�
Information flows: The regional appeal of an Index country’s media outlets and universities. Indicators for this sub-measure include regional online interest in selected national news agencies, newspapers, television, and radio broadcasters, as well as the number of inbound international students from the region enrolled in tertiary education.
People exchanges: This sub-measure examines people-to-people links through regional diasporas originating from Index countries, and the attractiveness of Index countries as travel and emigration destinations.
HOW IS POWER MEASURED?
CULTURAL INFLUENCE
DEFENCE NETWORKS
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RESULTS
OVERALL POWER RANKING
Rank Country / Territory Score
1 United States 85.0
2 China 75.5
3 Japan 42.1
4 India 41.5
5 Russia 33.3
6 Australia 32.5
7 South Korea 30.7
8 Singapore 27.9
9 Malaysia 20.6
10 Indonesia 20.0
11 Thailand 19.2
12 New Zealand 18.9
13 Vietnam 16.5
14 Pakistan 15.1
15 Taiwan* 14.9
16 Philippines 12.4
17 North Korea 11.4
18 Bangladesh 8.7
19 Brunei 8.2
= 20 Myanmar 7.6
= 20 Sri Lanka 7.6
22 Cambodia 6.1
23 Mongolia 5.0
24 Laos 4.8
25 Nepal 3.1
* Taiwan is included in the Index as a self-governing territory claimed by China
Super powers
≥ 70 points
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Minor powers
< 10 points
Middle powers
≥ 10 points
Major powers
≥ 40 points
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Rank Country / Territory Score
1 United States 91.7
2 China 91.3
3 Japan 32.9
4 India 26.8
=5 Russia 17.0
=5 South Korea 17.0
7 Singapore 14.8
8 Taiwan* 11.5
9 Australia 10.8
10 Indonesia 10.5
11 Thailand 8.5
12 Malaysia 8.2
13 New Zealand 6.1
14 Philippines 5.8
15 Vietnam 5.0
16 Bangladesh 4.2
17 Brunei 3.9
18 Pakistan 3.8
19 Sri Lanka 2.8
=20 Myanmar 1.8
=20 Nepal 1.8
22 North Korea 1.6
=23 Cambodia 0.7
=23 Mongolia 0.7
25 Laos 0.6
Rank Country / Territory Score
1 United States 94.6
2 China 69.9
3 Russia 61.4
4 India 48.9
5 North Korea 35.8
6 South Korea 29.2
7 Pakistan 27.5
8 Japan 26.9
9 Australia 24.9
10 Singapore 22.3
11 Taiwan* 19.4
12 Vietnam 16.3
13 Indonesia 14.9
14 New Zealand 11.2
15 Thailand 10.8
16 Malaysia 10.5
17 Myanmar 7.2
18 Sri Lanka 6.2
19 Philippines 4.1
20 Bangladesh 3.2
21 Mongolia 2.5
22 Brunei 2.2
23 Cambodia 1.7
24 Laos 0.5
25 Nepal 0.3
ECONOMIC RESOURCES MILITARY CAPABILITY
RESULTS
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Rank Country / Territory Score
1 United States 91.4
2 China 85.9
3 Australia 77.8
4 Russia 69.4
5 India 65.2
6 New Zealand 64.4
7 Indonesia 62.0
8 Malaysia 54.9
9 Japan 53.4
10 Thailand 49.1
11 South Korea 47.0
12 Vietnam 42.9
13 Taiwan* 39.2
14 Singapore 37.0
15 Bangladesh 36.4
16 Sri Lanka 35.4
17 Brunei 33.3
18 Philippines 32.2
19 Pakistan 28.5
20 Mongolia 24.6
21 Myanmar 23.1
22 Cambodia 20.9
23 Laos 20.5
24 North Korea 19.7
25 Nepal 13.3
Rank Country / Territory Score
1 China 83.0
2 United States 60.0
3 India 55.6
4 Indonesia 11.7
5 Russia 11.4
6 Japan 8.8
7 Pakistan 7.6
8 South Korea 5.6
9 Bangladesh 5.2
10 Philippines 4.0
11 Vietnam 3.7
12 Thailand 3.5
13 Australia 3.2
14 Taiwan* 2.7
15 Malaysia 2.6
16 Myanmar 2.4
17 Singapore 1.4
18 Sri Lanka 1.2
=19 Nepal 0.8
=19 North Korea 0.8
21 Cambodia 0.5
22 New Zealand 0.4
23 Laos 0.2
=24 Mongolia 0.1
=24 Brunei 0.1
RESILIENCE FUTURE TRENDS
RESULTS
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Rank Country / Territory Score
1 China 89.4
2 United States 83.8
3 Japan 82.0
4 India 72.5
5 Russia 65.7
6 Australia 62.6
7 South Korea 60.6
8 Singapore 51.1
9 Indonesia 46.2
10 New Zealand 41.0
11 Vietnam 40.5
12 Thailand 37.7
13 Malaysia 37.1
14 Pakistan 31.2
15 Philippines 30.3
16 Sri Lanka 23.7
17 Bangladesh 23.3
18 Brunei 20.2
19 Myanmar 19.4
20 Cambodia 18.1
21 Taiwan* 17.0
22 Laos 14.4
23 Mongolia 13.7
24 North Korea 13.0
25 Nepal 8.2
Rank Country / Territory Score
1 China 94.9
2 United States 64.5
3 Japan 57.1
4 Singapore 44.5
5 Australia 25.6
6 South Korea 25.5
7 India 22.9
8 Malaysia 20.5
9 Thailand 20.2
10 Vietnam 13.4
11 New Zealand 11.8
12 Taiwan* 10.5
13 Indonesia 10.2
14 Philippines 8.9
15 Brunei 8.8
16 Russia 7.3
17 Myanmar 6.9
=18 Cambodia 6.8
=18 Laos 6.8
20 Pakistan 4.7
21 Sri Lanka 2.9
22 Mongolia 1.1
23 Bangladesh 1.0
24 Nepal 0.4
25 North Korea 0.0
DIPLOMATIC INFLUENCE ECONOMIC RELATIONSHIPS
RESULTS
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Rank Country / Territory Score
1 United States 89.6
2 Australia 69.7
3 South Korea 51.1
4 Japan 46.1
5 Singapore 40.6
6 New Zealand 39.3
7 Malaysia 33.4
8 China 24.7
9 Thailand 24.2
=10 India 23.2
=10 Russia 23.2
12 Philippines 22.6
13 Indonesia 18.5
14 Pakistan 16.2
15 Taiwan* 13.8
16 Vietnam 13.0
17 Mongolia 9.9
=18 Brunei 9.1
=18 Bangladesh 9.1
20 Cambodia 8.5
21 North Korea 8.1
22 Nepal 5.5
23 Myanmar 3.1
24 Laos 2.9
25 Sri Lanka 0.6
Rank Country / Territory Score
1 United States 93.9
2 China 49.5
3 India 42.9
4 Japan 40.8
5 South Korea 25.0
6 Malaysia 24.5
7 Australia 22.4
8 Thailand 21.3
9 Singapore 17.7
10 Russia 15.8
11 Indonesia 13.8
12 Vietnam 13.6
13 Philippines 10.9
14 Taiwan* 9.7
15 New Zealand 7.8
16 Bangladesh 7.7
17 Pakistan 7.3
18 Myanmar 5.9
19 Laos 3.1
20 Cambodia 3.0
=21 North Korea 2.6
=21 Brunei 2.6
23 Nepal 2.3
24 Sri Lanka 1.7
25 Mongolia 0.2
DEFENCE NETWORKS CULTURAL INFLUENCE
RESULTS
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POWER GAP
The Power Gap measures the difference between a country’s overall power and what its power might be expected to be given its available resources. The difference between actual and predicted scores effectively reveals how well each country converts its resources into influence in Asia.
The extent to which each country’s regional influence affects their overall power, either positively or negatively, is their Power Gap score. Countries with outsized influence relative to their resources have a positive Power Gap score. Conversely, countries that exert undersized influence relative to their share of resources register a negative Power Gap score.
Index countries can be overperformers or underperformers in Asia relative to their size and resources, irrespective of where they place in the rankings.
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2.
The United States remains the pre-eminent power in Asia.
The�United�States�claims�the�top�spot�in�five�of�the�eight�Index�measures�and�a�10-point�lead�over�China�in�overall�power.�The�country�retains the most powerful military force in Asia and is at the centre of a�network�of�regional�alliances�that�Beijing�cannot�match,�reflected� by�a�65-point�lead�over�China�in�defence networks.
The United States leads in cultural influence as the foremost source of news and media in the region and the preferred university destination for Asian students. Despite having a smaller economy at purchasing power parity, the United States effectively draws even with China in economic resources, in part because of the role of the US dollar as the global reserve currency and America’s ongoing technological edge.
However, in terms of economic relationships the United States lags China�by�more�than�30�points,�the�glaring�weakness�in�US�influence�in Asia. US diplomatic influence in the region has also been damaged by nervousness about the Trump administration and its foreign policy decisions,�including�its�withdrawal�in�2017�from�the�Trans-Pacific�Partnership. US political leadership in Asia is in doubt.
Most�significantly,�even�if�the�United�States�continues�to�outspend�China in military expenditure, future trends point to a relative decline in�US�power,�with�a�second�place�finish�only�marginally�ahead�of�India.
China, the emerging superpower, is rapidly closing in on the United States.
Whereas US commitments are spread across the globe, China can concentrate its resources in Asia. The country holds a top-two position across�all�but�one�measure�and�ranks�first�in�economic relationships, diplomatic influence and future trends.�Projects�such�as�the�Belt�and�Road�Initiative�play�to�Beijing’s�strengths�as�the�primary�trade�partner�and�source�of�foreign�assistance�in�the�region.�By�2030,�China’s�GDP�is forecast to be almost twice the size as that of the United States at purchasing power parity. A large domestic market makes industrial-scale implementation of new technologies much easier to achieve.
Yet hurdles remain: China’s ageing working-age population — set to decline�by�42�million�people�in�2030�from�2015�levels�—�may�presage�
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KEY FINDINGS
The United States retains the most powerful military
force in Asia.
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KEY FINDINGS
economic and societal challenges to come. China’s resilience score is affected by active boundary disputes with its neighbours as well as a dependence on energy imports.
The state of China’s military technology still favours maritime area denial over dominance and long-range force projection. And an underdeveloped defence network, ranked eighth in the region, means China is vulnerable to a military and strategic counterweight led by other regional powers.
Nevertheless,�China�and�the�United�States�are�now�firmly�established�as peer competitors in Asia. The power differential between these two superpowers and every other country in the Index is substantial. There is�a�33-point�gap�in�overall�power�scores�between�China�and�the�next�highest-ranked group — the major powers Japan and India. This gap is�as�large�as�that�between�Japan�and�Bangladesh,�ranked�18th�in�the�Index as a minor power.
Japan and India share major power status but are moving in opposite directions.
Both�countries�are�cultural�powerhouses�in�Asia,�falling�within�one�point�of each other in overall power and occupying a distinct tier eight points ahead of the most sizeable middle powers.
Tokyo is the quintessential smart power, using the country’s limited resources to wield broad-based influence in the region. However, it underperforms in the resources measures, in particular for military capability, and its continued prospects as a major power fall markedly with demographic decline and a GDP growth forecast of just 12%�between�2016�and�2030.�
India is moving in the opposite direction. It ranks third for its aggregate resources score and is set to become the fastest-growing economy in�the�region,�predicted�to�grow�169%�between�2016�and�2030.�It�also�stands�to�gain�an�additional�169�million�people�to�its�working-age�population�by�2030.�However,�the�economic�giant�suffers�from�a�poor�track record of converting its sizeable resources base into strategic gain�in�Asia�—�despite�New�Delhi’s�‘Act�East�Policy’.�It�trails�behind� in the influence measures, most notably in defence networks and economic relationships.
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Japan is a smart power, while
India is a giant of the future.
By 2030, China’s GDP is forecast to
be almost twice the size as that of the
United States.
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4. North Korea, Russia and Taiwan are the misfit middle powers in Asia.
They deliver inconsistent performances, with stark strengths and weaknesses, resulting in negative Power Gap scores.
North�Korea�breaks�into�the�top�five�for�military capability. Pyongyang’s asymmetric power has proven an effective deterrence and disruption strategy�against�larger�powers.�Yet,�belying�its�new-found�confidence� as a nuclear-armed country, North Korea remains a brittle state, its power�concentrated�in�one�measure.�The�country�ranks�17th�in�the�Index with near-zero scores in future trends and economic relationships.
Russia’s Power Gap score, ranked second to last ahead only of North Korea, indicates its influence may be limited by its position on the geographic periphery of Asia. Moscow maintains defence consultation pacts with China, India, North Korea and Vietnam and�has�a�degree�of�appeal�in�Asia�through�its�English-language� media. However, its performance across the influence measures is comparatively low relative to its strong fourth place ranking for its aggregate resources score.
Taiwan, a top ten economy in Asia, is a political rather than geographic outsider, with virtually no diplomatic recognition or allies in the region. Its inability to convert resources into tangible influence presents a major and long-term strategic vulnerability.
KEY FINDINGS
North Korea remains a brittle state, belying its
new-found confidence as
a nuclear-armed country.
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5. Singapore, Australia and South Korea are overperformers in the region.
They are all in the top ten for overall power, and wield more influence than would be expected from their military and economic size, resulting in positive Power Gap scores.
Singapore is a standout performer across the influence measures. The�city-state,�with�a�population�of�just�5.6�million,�is�highly�networked�and externally focused — achieving a fourth place ranking in economic relationships. However, Singapore’s success and small size poses unique strategic challenges: its high dependence on global trade is a double-edged sword and, coupled with its geographic vulnerability surrounded by larger neighbours, explains Singapore’s 14th place ranking under resilience.
All three middle powers have invested in strong defence networks, each�placing�in�the�top�five�for�that�measure.�Singapore�excels�in� broad-based non-allied defence partnerships, while Australia and South�Korea�benefit�from�their�treaty�alliances�with�the�United�States�which act as a force multiplier for their autonomous military capability.
Australia and South Korea also deliver strong and consistent performances in economic relationships and cultural influence. South Korea has well-developed trade and investment ties in Southeast�Asia,�and�Australia�serves�as�an�English-language� education hub for the region.
KEY FINDINGS
Singapore is highly networked
but its success and small size pose
unique strategic challenges.
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METHODOLOGY
The Lowy Institute Asia Power Index consists of eight measures of power, 27 thematic sub-measures and 114 indicators. Data was drawn from hundreds of publicly available sources and original Lowy Institute research.
Quantifying state power presents several key challenges. First, the relative importance of factors determining state power is subject to debate.�Second,�it�is�difficult�to�obtain�reliable�and�cross-comparable�data�across�25�countries.
The selection of indicators was driven by an extensive literature review and expert consultations designed to address these methodological hurdles. As such, each indicator represents a carefully selected proxy for a broader category of variables often�more�difficult,�if�not�impossible,�to�measure�comparatively.
The methodological framework of the Index is informed by the OECD’s�Handbook on Constructing Composite Indicators. A distance-to-frontier approach is used to compare a country’s results with the best performing and worst performing countries in each dataset. The distance-to-frontier method allows for different indicators to be made comparable across a diverse set of metrics, while preserving the relative distance among the original data values. The method also reflects the notion that power in international relations is relative, measured as a comparative advantage in a given frame of reference.
Overall Power
Measures (8)
Sub-measures (27)
Indicators (114)
Data was drawn from hundreds of publicly available sources and original Lowy Institute research.
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METHODOLOGY
Weightings
The Lowy Institute has assigned a set of weightings to the component parts of the Asia Power Index that reflect their relative importance for exercising state power.
These authoritative weightings reflect the collective judgement of Lowy Institute experts on the basis of relevant academic literature and consultations with policymakers from the region. They take into account the dimensions of power considered most advantageous to countries given the current geopolitical landscape of the region.
While our weightings are consistent with broadly held views in the policy and scholarly communities, it is of course possible to reach other value judgements about the relative importance of the measures.
An innovative calculator on the digital platform enables users to adjust the principal weightings according to their own assumptions and reorder the rankings on that basis.
Sensitivity analysis demonstrates that the overall power rankings of the Lowy Institute Asia Power Index are overwhelmingly affected by the choice of variables themselves, with weightings playing a secondary role in�determining�the�final�results.
Review: Three stages
The model underwent three stages of review. First, the analytical assumptions�and�findings�were�submitted�through�an�extensive�peer�review�process.�Second,�a�team�of�fact�checkers�verified�that�the�raw�data points and their normalised scores were factually correct and drew on the latest available data. Third, PwC provided a limited integrity review of the spreadsheets and formulas used to calculate the eight measures of the Index.
An innovative calculator on the digital platform of the Index enables users to adjust the principal weightings.
Measure Weighting
Economic resources 20%
Military capability 20%
Resilience 7.5%
Future trends 7.5%
Diplomatic influence 10%
Economic relationships 15%
Defence networks 10%
Cultural influence 10%
A full methodology report for the Lowy Institute Asia Power Index can be downloaded at: power.lowyinstitute.org/methodology
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Sub-measure Indicator Technical description
Size GDP GDP at purchasing power parity, current prices (2016); IMF WEO, October 2017
International leverage
Corporate giants Number of public companies listed in the Forbes 2000 (2017); Forbes 2000
Reserve currency World currency composition of official foreign exchange reserves, annualised average (2016–17); IMF
International currency share Share of international financial transactions undertaken in national currency, annualised average (2017); SWIFT
Official reserves Official reserve assets including gold, current dollars (2016); World Bank, Reuters, CIA World Factbook
Export credit agencies Export credit agencies, total assets, current dollars (2016); Lowy Institute
Sovereign wealth funds Sovereign wealth funds, total assets, current dollars (2018); SWFI
Technology High-tech exports Estimated technological sophistication of exports, EXPY (2016); World Integrated Trade Solution, Lowy Institute
Productivity GDP per worker at purchasing power parity, constant 2011 prices (2017); ILO
Human resources in R&D Total R&D researchers, full-time equivalent (latest year available); UNESCO, Taiwan Statistical Data Book, ASTI, Lowy Institute
R&D spending (% of GDP) Gross domestic expenditure on R&D as a share of GDP (latest year available); UNESCO, Taiwan Statistical Data Book, ASTI, Lowy Institute
Nobel prizes (sciences) High achievements in physics, chemistry, and physiology or medicine (1990–2017); NobelPrize.org
Supercomputers Number of supercomputers (2017); Top 500.org
Satellites launched since 2014 Satellites by country of ownership or operation launched (2014–17); UCS Satellite Database
Carbon intensity Kilograms of CO2 emissions per US$ of GDP, current dollars (2014); CDIAC, World Bank, Taiwan Statistical Data Book
Connectivity Global exports Exports of goods and services, current dollars (2016); World Bank, CIA World Factbook
Global imports Imports of goods and services, current dollars (2016); World Bank, CIA World Factbook
Global investment outflows (%) Foreign direct investment, 3-year average share of global foreign investment outflows (2014–16); UNCTAD
Global investment inflows (%) Foreign direct investment, 3-year average share of global foreign investment inflows (2014–16); UNCTAD
Merchant fleet Total fleet, dead-weight tons (2017); UNCTAD
Travel hub: International airlines Number of international airlines flying into principal airport hub (2017); Lowy Institute
Sub-measure Indicator Technical description
Defence spending
Military expenditure, market exchange rates
Military expenditure converted at 2015 average market exchange rates, current US$ (2015); United States Bureau of Arms Control, Verification and Compliance
Military expenditure, defence sector PPP
Military expenditure at a notionally estimated defence sector purchasing power parity rate, constant prices (2015); United States Bureau of Arms Control, Verification and Compliance
Armed forces Military and paramilitary forces Active military and paramilitary personnel (2017); IISS Military Balance 2017
Training, readiness and sustainment
Training and preparedness for sustained operations in the event of interstate conflict (2017); Lowy Institute Defence Network, expert assessment
Organisation: Combat experience
Combat experience relevant to the ability of armed forces to engage in interstate conflict (2017); Lowy Institute Defence Network, expert assessment
Organisation: Command and control
Exercise of authority and direction over armed forces in the event of an interstate conflict (2017); Lowy Institute Defence Network, expert assessment
Weapons and platforms
Land warfare: Manoeuvre Proxy: Main battle tanks and infantry fighting vehicles (2017); IISS Military Balance 2017
Land warfare: Firepower Proxy: Attack helicopters, used in close air support for ground troops (2017); IISS Military Balance 2017
Maritime warfare: Sea control Proxy: Principal surface combatants — frigates, destroyers, cruisers and carriers (2017); IISS Military Balance 2017
Maritime warfare: Firepower Proxy: Missile vertical launching cells on board principal surface combatants and submarines (2017); IISS Military Balance 2017
Maritime warfare: Sea denial Proxy: Tactical submarines (2017); IISS Military Balance 2017
Air warfare: Fighters Fighter ground attack aircraft (2017); IISS Military Balance 2017
Air warfare: Enablers Proxy: Transport aircraft, airborne early warning and control (AEW&C) aircraft, and intelligence, surveillance and reconnaissance (ISR) aircraft (2017); IISS Military Balance 2017
Technology, maintenance and range
Technology, maintenance and range of weapons systems, equipment and materiel (2017); Lowy Institute Defence Network, expert assessment
ECONOMIC RESOURCES
MILITARY CAPABILITY
INDICATORS
21
Sub-measure Indicator Technical description
Signature capabilities
Nuclear weapons capability States with nuclear weapons (2017); Lowy Institute
Nuclear weapons range Maximum estimated nuclear missile range (2017); CSIS Missile Defense Project
Ground-based nuclear missile launchers
Launching platforms for intercontinental ballistic missiles (ICBM), intermediate-range ballistic missiles (IRBM), medium-range ballistic missiles (MRBM), short-range ballistic missiles (SRBM), and ground-launched cruise missiles (GLCM) among nuclear armed Index countries (2018); IISS Military Balance 2018
Nuclear second-strike capability Proxy: Ballistic missile submarines (2017); IISS Military Balance 2017Long-range maritime force projection Carriers and principal amphibious ships (2017); IISS Military Balance 2017
Area denial capabilities Area denial capabilities: Air defence, anti-naval, and intelligence, surveillance, reconnaissance and targeting capabilities (2017); Lowy Institute Defence Network, expert assessment
Intelligence capabilities Intelligence capabilities: Institutional know-how, overseas reach, personnel and technological sophistication (2017); Lowy Institute Defence Network, expert assessment
Cyber capabilities Defensive and offensive cyber capabilities (2017); Lowy Institute Defence Network, expert assessment
Asian military posture
Ground forces deployment Ability of ground forces to deploy with speed and for a sustained period in the event of a major continental military confrontation in the Asia-Pacific region (2017); Lowy Institute Defence Network, expert assessment
Naval deployment Ability of the navy to deploy with speed and for a sustained period in the event of a major maritime military confrontation in the Asia-Pacific region (2017); Lowy Institute Defence Network, expert assessment
Sub-measure Indicator Technical description
Geoeconomic security
Diversity of export products Total products exported to at least one foreign market with a value of at least US$10,000 (2016); World Integrated Trade Solution
Diversity of export markets Foreign markets to which exporter ships at least one product with a trade value of at least US$10,000 (2016); World Integrated Trade Solution
Dependency on global trade (%) Trade as a share of GDP (2016); World Bank, CIA World Factbook, Bank of Korea, IMF WEO, October 2017Dependency on primary trade partner (%) Two-way trade with primary trade partner as a share of total trade (2015); World Integrated Trade Solution
Net energy deficit (%) Primary energy production shortfall as a share of total primary energy use (2015); IEA Atlas of Energy, ASEAN Centre for Energy, Greater Mekong Subregion Information Portal
Net energy surplus (%) Primary energy production surplus as a share of total primary energy use (2015); IEA Atlas of Energy, ASEAN Centre for Energy, Greater Mekong Subregion Information Portal
Net energy exports Net energy exports in million tonnes of oil equivalent (2015); IEA country indicators, Ministry of Energy and Mines, Lao PDR
Rare-earth metals supply Mining production of rare-earth metals, tonnes (2016); US Geological Survey
Geopolitical security Population relative to
neighbours
Population as a share of neighbouring country populations (weighted at 100% for neighbouring countries with land borders; 75% for neighbouring countries divided by a strait; 25% for neighbouring countries with touching or overlapping claimed EEZ boundaries) (2016); World Bank, Taiwan Statistical Data Book, CIA World Factbook
Landmass deterrent Country landmass, square kilometres (2017); World Bank, Taiwan Statistical Data Book
Demographic deterrent Total population (2016); World Bank, Taiwan Statistical Data Book
Interstate conflict legacies Years of interstate conflict with neighbouring countries as a primary party (1948–2016); Uppsala Conflict Data Program
Boundary disputes Overlapping territorial claims and/or unresolved land border and maritime demarcations (2017); Lowy Institute
Institutional stability
Government effectiveness Government Effectiveness: Percentile Rank (2016); Worldwide Governance Indicators
Political stability Political Stability and Absence of Violence/Terrorism: Percentile Rank (2016); Worldwide Governance Indicators
Civil unrest Number of recorded violent protests (2013–17); Global Database of Events, Language, and Tone
Internal conflict years Number of years since 1946 in which at least one internal armed conflict resulted in 25 or more battle-related deaths (1946–2016); Uppsala Conflict Data Program
High-intensity internal conflict years
Number of years since 1946 in which at least one internal armed conflict resulted in 1000 or more battle-related deaths (1946–2016); Uppsala Conflict Data Program
Infant mortality Number of infants dying before reaching one year of age, per 1000 live births in a given year (2016); World Bank; CIA World Factbook
Merchant fleet Total fleet, dead-weight tons (2017); UNCTAD
Travel hub: International airlines Number of international airlines flying into principal airport hub (2017); Lowy Institute
RESILIENCE
MILITARY CAPABILITY (CONTINUED)
INDICATORS
22
INDICATORS
Sub-measure Indicator Technical description
Economic size 2030
GDP 2030 GDP forecast at purchasing power parity, constant 2016 prices (2030); Lowy Institute, IMF WEO, October 2017
Military expenditure 2030
Military expenditure 2030, defence sector PPP
Projection based on military expenditure at defence sector PPP rate as a constant share of GDP PPP, constant 2015 prices (2030); Lowy Institute, US Department of State
Working-age population 2030
Working-age population, 2030 Medium variant forecast for total working-age population, 15–64 (2030); Lowy Institute, UNPD
FUTURE TRENDS
Sub-measure Indicator Technical description
Diplomatic network
Embassies (regional) Number of embassies, high commissions and permanent missions in Index countries (2017); Lowy Institute Global Diplomacy Index 2017
Embassies (global) Number of embassies, high commissions and permanent missions globally (2017); Lowy Institute Global Diplomacy Index 2017
Second-tier diplomatic network (regional)
Consulates and other representative offices in Index countries (2017); Lowy Institute Global Diplomacy Index 2017
Diplomatic service Efficacy of country’s diplomatic service and wider foreign policy bureaucracy (2017); Lowy Institute Diplomatic Network, expert assessment
Multilateral power
Institutional voting shares Average voting share by subscribed capital in major multilateral development banks (2017); Lowy Institute
Diplomatic clubs and summits Membership in select diplomatic clubs and summits (2017); Lowy Institute
Intergovernmental organisations Membership in select regional intergovernmental organisations (2017); Lowy Institute
Political leadership
Political leadership (regional) Efficacy of political leaders in advancing their country’s diplomatic interests in Asia (2017); Lowy Institute Diplomatic Network, expert assessment
Political leadership (global) Efficacy of political leaders in advancing their country’s diplomatic interests globally (2017); Lowy Institute Diplomatic Network, expert assessment
DIPLOMATIC INFLUENCE
Sub-measure Indicator Technical description
Regional trade relations
Trade with region Total value of trade with Index countries, current dollars (2015); World Integrated Trade Solution, Atlas of Economic Complexity
Primary trade partner Number of Index countries in which state is the primary regional trading partner (2015); World Integrated Trade Solution, Atlas of Economic Complexity
Regional selling power Average imports share in 24 Index countries (2015); World Integrated Trade Solution, Atlas of Economic Complexity
Regional buying power Average exports share in 24 Index countries (2015); World Integrated Trade Solution, Atlas of Economic Complexity
Regional investment ties
Foreign investment in region Total stock of outward foreign direct investment in 24 Index countries, current dollars (2012); UNCTAD, Lowy Institute
Primary foreign investor Index countries in which state is the primary regional inward foreign direct investor, based on FDI stock (2012); UNCTAD, Lowy Institute
Average share of investment Average share of inward foreign direct investment in 24 Index countries, based on FDI stock (2012); UNCTAD, Lowy Institute
Economic diplomacy
Global FTAs Bilateral and multilateral free trade agreements concluded by Index countries with other countries globally (2017); WTO
Regional FTAs Bilateral and multilateral free trade agreements concluded between Index countries (2017); WTO
Foreign assistance (global) Annual overseas development assistance (ODA) and other official flows (OOF), current dollars (2016); OECD, AidData
Foreign assistance (regional) Annual overseas development assistance (ODA) and other official flows (OOF) to Asia, current dollars (2016); OECD, AidData
ECONOMIC RELATIONSHIPS
23
INDICATORS
Sub-measure Indicator Technical description
Regional alliance network
Regional military alliancesNumber of codified alliances between Index countries, including a mutual defence clause or actionable security guarantee (2017); Alliance Treaty Obligations and Provisions Project, Lowy Institute
Allied force deploymentsAllied military personnel deployed in Index countries: minimum of 50 personnel deployed on a permanent or semi-permanent rotational basis (2017); IISS Military Balance 2017
Joint training (allies)Number of joint training exercises conducted with allied Index countries (2012–16); IISS Military Balance 2013–17
Joint conflict years (allies)Years of conflict fought side by side with allied Index countries, as a primary or supporting party (1948–2016); Uppsala Conflict Data Program
Arms procurements (allies)Arms imports from allied Index countries expressed in SIPRI Trend Indicator Values (2011–16); SIPRI Arms Transfers Database
Alliance force multiplier Ratio of combined allied military capabilities to autonomous military capability (2017); Lowy Institute
Regional non-allied partners
Joint training (non-allies)Number of joint training exercises conducted with non-allied Index countries (2012–16); IISS Military Balance 2013–17
Defence consultation pactsDefence consultation pacts between non-allied Index countries (2017); Alliance Treaty Obligations and Provisions Project, Lowy Institute
Foreign deploymentsMilitary personnel deployed to or from non-allied Index countries: minimum of 50 personnel deployed on a permanent or semi-permanent rotational basis (2017); IISS Military Balance 2017
Joint conflict years (non-allies)Years of conflict fought side by side with non-allied Index countries, as a primary or supporting party (1948–2016); Uppsala Conflict Data Program
Arms procurements (non-allies)Arms imports from non-allied Index countries expressed in SIPRI trend indicator values (2011–16); SIPRI Arms Transfers Database
Global arms transfers
Arms transfer deliveriesAnnual arms imports and exports, current dollars (2015); United States Bureau of Arms Control, Verification and Compliance
Arms export partnerships Arms export recipients, including state and non-state groups (2011–16); SIPRI Arms Transfers Database
Sub-measure Indicator Technical description
Cultural projection Google interest
Interest abroad in country; average Google search interest in 23 Index countries over 12-month period (2016–17); Google Trends, Lowy Institute
Cultural exports (%) Share of total value of exports of cultural goods and services from Index countries (2012); UNESCO
Global brands Number of brands in the Global 500 (2018); Brand Directory
Prestige: Skyscrapers Buildings in financial capital above 150 metres in height (2018); Council on Tall Buildings and Urban Habitat
Status: Visa-free travel Number of countries that citizens can travel to visa-free (2018); Henley & Partners
Cultural heritage UNESCO World Heritage listed sites (2017); UNESCO
Information flows
Inbound Asian international students
International students enrolled in tertiary education from East, South and West Asia and the Pacific (2016); UNESCO, ICEF Monitor, Lowy Institute
News agenciesInterest abroad for national news agencies; average Google search interest in 23 Index countries over 12-month period (2016–17); Google Trends, Lowy Institute
NewspapersInterest abroad for selected national newspapers; average Google search interest in 23 Index countries over 12-month period (2016–17); Google Trends, Lowy Institute
Television broadcastersInterest abroad for selected television broadcasters; average Google search interest in 23 Index countries over 12-month period (2016–17); Google Trends, Lowy Institute
Radio broadcastersInterest abroad for public radio broadcaster; average Google search interest in 23 Index countries over 12-month period (2016–17); Google Trends, Lowy Institute
People exchanges
Regional diaspora Outward migrant stock by country of origin settled in Index region (2017); UN DESA, Taiwan News
Regional immigrant stockInward migrant stock from Index region by country of destination (2017); UN DESA, Taiwan National Immigration Agency
Regional tourist arrivalsArrivals of non-resident visitors from Index countries at national borders (2016); UNWTO Tourism Highlights 2017, Reuters
DEFENCE NETWORKS
CULTURAL INFLUENCE
24
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