Damian Shahfazli | Indo Pacific Fellow
Image sourced from Zhitao Zhang via Wikimedia Commons.
By 2050, the United Nations Population Fund estimates that one in four people within Asia and the Pacific will be over the age of 60. However, these unprecedented demographic shifts will not impact the Indo-Pacific equally. Traditionally dominant economies in Northeast Asia including China, Japan, South Korea, and Taiwan, will experience the biggest share of this aging. Meanwhile South and Southeast Asian nations will undergo slower demographic transitions.
Such shifting demographics set against a backdrop of intensifying regional security dynamics present a critical juncture for the ‘middle power’ diplomatic capacities of these South and Southeast Asian nations. The negotiating power of demographically younger states is only set to increase into the future. However, the true extent and impact of this power hinges upon the methods through which such states engage with both one another and bigger regional players. Only by strategically capitalising on the regional rise in minilateral agreements can demographically emerging middle powers challenge United States (US) or China-centric coalitions and fundamentally reshape the Indo-Pacific’s geopolitical outlook.
The Indo-Pacific’s Demographic Transition
The term “Indo-Pacific” first appeared in Australia’s 2012 White Paper, reflecting a strategic reframing, in part driven by demographic realities. The integration of India as a regional power, with its population recently surpassing China's, has prompted nations like the United States and Australia to shift from the “Asia-Pacific” framework to a broader “Indo-Pacific” concept, enabling deeper engagement with India, and similarly emergent nations in South and Southeast Asia.
The demographic emergence of these states has, in part, driven their rising economic and strategic importance. Southeast Asia’s labour force is projected to peak at 510 million by 2050, cementing its role as an epicentre of growth in the region. Its demographic decline is projected to begin later in the century, offering a limited timeframe for it to capitalise on its emerging status. Investment trends already reflect this shift, with companies of Northeast Asian origin relocating manufacturing to Southeast Asian nations. In contrast, Northeast Asia continues to face demographic challenges. China’s working-age population is expected to decline by 200 million by 2050, and similar trends are being observed in South Korea, Japan and Taiwan.
Multilateralism’s Regional Shortfalls
A demographic dividend has emerged where South and Southeast Asian middle powers and their expanding working-age populations can serve both economic leverage and diplomatic capital. Yet translating this demographic strength into influence requires strategic navigation of existing regional frameworks. Historically, middle power diplomacy in the Indo-Pacific has been exercised through multilateral institutions like ASEAN and APEC. However these larger consensus-building structures and their lack of overriding authority makes them subject to internal divisions and external power rivalries. ASEAN remains at odds over contentious regional issues like Myanmar’s military junta, while APEC has faced deadlock over US-China tensions over trade disputes. As these mechanisms falter, emerging middle powers are shifting toward minilateral agreements — smaller, targeted coalitions that address shared challenges to better serve signatories’ interests.
The Minilateral Alternative
Today, minilateral agreements are central to consensus building in the Indo-Pacific by allowing middle powers to pursue agreements tailored to their specific interests. A key feature of this minilateral shift involves US-led or US-allied collaborations that often pair aging, industrialized states with rising middle and great power states, undergoing demographic growth. These younger states with growing workforces and military-age populations are uniquely positioned to use their demographic strengths in negotiations, enabling them to secure partnerships that align with their infrastructural and defence priorities.
This dynamic is already witnessed through initiatives like JAPHUS, a trilateral agreement between Japan, the Philippines and the US. Bolstered by ASEAN’s inability to resolve security concerns in the South China Sea and its own growing strategic and demographic importance, the Philippines pursued this minilateral arrangement to strengthen regional security with Japan and the US, while securing infrastructural investments in return. Smaller, minilateral agreements like JAPHUS underscore the value in younger, emerging middle powers utilising their demographic strengths to organise international engagements in their favour. In bypassing larger consensus-driven frameworks like ASEAN, these nations have begun to shape a new diplomatic landscape through minilateralism that reflects the shifting balance of power in the Indo-Pacific. However, these existing minilateral agreements continue to reinforce US or Chinese-centric interests, preventing emerging powers from reaching their full potential.
Stronger Together
As demographic trends continue to reshape the Indo-Pacific, the rise of younger states as leaders in minilateral diplomacy may reduce their reliance on more aged, economically advanced US-aligned nations like Japan, South Korea, and Australia. These younger nations could form coalitions that shift regional focus away from the US-China binary, fostering a pragmatic, multipolar approach to governance. The success of initiatives like the Trilateral Cooperative Agreement (TCA) among Indonesia, Malaysia, and the Philippines demonstrates how these coalitions can address regional security concerns. Unlike other agreements influenced by external powers, the TCA operates independently of US or Chinese interests, independently pursuing maritime security decisions that align purely with their shared regional priorities.
This evolution in middle power diplomacy underscores the necessity of adapting to a rapidly changing international system. The Indo-Pacific’s shifting demographics highlight opportunities for demographically younger states to assert their agency by fostering minilateral partnerships tailored to their interests. By taking advantage of their demographic and strategic strengths, emerging nations can assert a more independent role in shaping the future of the Indo-Pacific, moving beyond the constraints of multilateral frameworks and the looming US-China rivalry toward a more equitable and multipolar order.
Damian Shahfazli is the Indo Pacific Fellow for Young Australians in International Affairs. He recently completed a Bachelor of Arts and Bachelor of International Studies majoring in International Relations, Chinese Studies, and minoring in Politics at Macquarie University. Through his studies Damian had the opportunity to study abroad in Taiwan in 2023 for 6 months as a New Colombo Plan Mobility Grant recipient which drew his interest deeper into the Indo-Pacific. His research areas of interest surround cross-strait relations, diaspora studies and developmental state models in the region, which he wishes to explore throughout his fellowship.
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