At the 2026 Shangri-La Dialogue in Singapore on May 30, U.S. Defense Secretary Pete Hegseth told Asian allies to spend 3.5% of GDP on defence and quipped “more ships, less Shangri-La.”
At the recent Shangri-La Dialogue in Singapore, US Defense Secretary Pete Hegseth pressed America’s Asian allies to spend 3.5% of their GDP on defense, fueling anxiety across the region and beyond. His brow-beating call to arms may well bring about a regional defense build-up on a scale unseen since the Cold War’s end.
Such an outcome will actually do little to bolster regional security or address US defense concerns. For one thing, China may very well respond in kind, thus delivering limited to no benefits from the increased spending.
The Association of Southeast Asian Nations, the 11-member bloc south of China and east of India, has been a mostly peaceful region since the brief 1979 Sino-Vietnamese War. Notwithstanding ASEAN’s shortcomings and internal divisions—the group comprises democracies like Indonesia, Malaysia, the Philippines, and Singapore, autocracies like Cambodia, Laos, and Vietnam, and military juntas like Myanmar—it has long been the only entity with enough credibility to oversee regional security.
To steer large powers like China, the United States, India, and Japan away from confrontation and conflict in the Indo-Pacific, ASEAN has acted as buffer, bridge, and broker, prioritizing dialogue and diplomacy over military muscle. As Winston Churchill once put it, “meeting jaw to jaw is better than war.”
But in Singapore, Hegseth castigated the region’s leaders for this approach, saying: “We don’t need more conferences. We need more combat power … less Shangri-La, more ships, more subs.”
What Hegseth fails to realize is that his call for a pan-Asian military build-up risks spiraling into an arms race. This is a dangerous prospect for a region riddled with historical enmities and overlapping territorial claims, particularly as tensions between the US and China mount, and while India and Japan take steps to build up their armed forces. Indeed, the fact that there are now open debates in Japan and South Korea about whether to acquire nuclear weapons is the clearest evidence of how dangerous an Asian arms race could become.
There are economic risks, too. With Southeast Asia spending, on average, less than 2% of GDP on defense, Hegseth’s 3.5% target would require Indonesia, Malaysia, the Philippines, and Thailand to more than double their current annual military expenditures. Others, such as Singapore and Vietnam, face smaller but still considerable gaps. Myanmar is the only ASEAN member state already above the target, at 6.8%, but its arsenal is aimed at its own people, who have fought a fierce civil war against the junta since it deposed Aung San Suu Kyi’s government in February 2021.
Worryingly, militaries have historically played an outsize role in Southeast Asian politics: the Thai military, for example, has staged 22 coup attempts, 13 of them successful, over the past century. In a number of countries, higher defense budgets may well embolden an officer corps that only grudgingly accepts democracy and civilian rule.
The growth implications of acquiescing to Hegseth’s demand could also be far-reaching. In the aftermath of the Cold War’s end, Southeast Asia has shifted its focus from defense to trade and investment, owing to greater economic integration through ASEAN. The region became a manufacturing powerhouse, resulting in rapid economic development that has contributed significantly to global growth.
But Southeast Asia has come under strain in recent years, as its export-led growth model faces headwinds from US protectionism and the energy shock caused by US President Donald Trump’s war on Iran. Reallocating resources from critical sectors such as health and education to weapons purchases and constructing a defense industrial base would place these economies in an even more precarious position.
Perhaps most importantly, domestic instability may rise if ASEAN member states are forced to slash social safety nets and welfare services to pay for military equipment and security projects. Such internal turmoil could ignite regional disputes—Thailand and Cambodia fought over their border last year—as governments embrace populist nationalism to divert attention from worsening economic conditions.
The fallout from lower economic growth, higher defense spending, and unmet social needs would likely weaken regional unity. Should ASEAN start to fray further as a result, some of its member countries may come to believe that their interest lies in gravitating toward China’s geostrategic orbit—precisely the opposite of Hegseth’s intention.
Of course, Southeast Asia should not “freeload” under America’s protective umbrella, a charge Hegseth has also leveled at Europe. But great powers should (and often do) allow some degree of free riding, because they prefer that smaller countries accept their leadership without question.
Moreover, the US should appreciate how effective Southeast Asian countries have been in using diplomacy and cooperation on economic and security matters to counter regional threats. This is part and parcel of their defense strategy, and it has meant engaging China and including it in bodies such as the Regional Comprehensive Economic Partnership and the ASEAN Defense Ministers’ Meeting-Plus (in which the US also participates).
Ultimately, for all Hegseth’s talk of “burden-sharing,” the numbers indicate that his push is more about regional bullying. If the US wants its allies to bear more of the security burden in Asia, then one would expect the region’s increased defense spending to correlate with a reduction in America’s military expenditure. But Hegseth’s self-styled “Department of War” seeks to increase its budget from $1 trillion to $1.5 trillion in the coming fiscal year. If Congress approves that whopping 50% hike, the US will spend more on defense than the world’s next nine largest militaries combined, amounting to some 44% of global military spending.
Hegseth’s muddled proposal reveals a shocking ignorance of the real threat. If the US focuses on dominating the Western Hemisphere, as laid out in the Trump administration’s National Security Strategy and National Defense Strategy, and pulls back from its defense commitments in Asia, ASEAN member states will be unable to compete with China on military spending. The resulting imbalance would be in no one’s interest—except, of course, that of China.
Copyright: Project Syndicate, 2026.
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