Indonesia's Rising Influence Reshapes Global Order, New IEP Report Finds

IEP Report Identifies Indonesia as Key Middle Power

A recent report by the Institute for Economics and Peace (IEP), titled 'The Great Fragmentation: The Rise of Middle Powers in a Fractured International Order,' underscores Indonesia's increasing influence on the global stage. Published around January 23, 2026, the report identifies Indonesia, alongside the UAE and Türkiye, as a leading middle power whose growing impact is reshaping the international system as superpower reach plateaus.

The IEP's findings suggest a structural shift in global politics, where geopolitical fragmentation now surpasses Cold War levels, and the collective material capacity of middle powers has begun to exceed that of traditional great powers. This environment allows nations like Indonesia to enhance their strategic autonomy and play a more significant role in defining regional and international norms.

Diplomatic Prowess and Regional Leadership

Indonesia's ascent as a middle power is significantly driven by its robust diplomatic engagement and consistent leadership within regional and international forums. Scholars recognize Indonesia as a middle power in the Asia-Pacific due to its substantial geographic and demographic size, coupled with its rising capabilities and diplomatic initiatives. The Lowy Institute also positioned Indonesia as the ninth most influential middle power in Asia, specifically acknowledging its diplomatic achievements.

Key examples of Indonesia's diplomatic influence include:

• ASEAN Leadership: As a founding member and the largest country in the Association of Southeast Asian Nations (ASEAN), Indonesia has consistently placed the organization at the core of its foreign policy. It has chaired ASEAN multiple times, including in 1976, 1996, 2003, 2011, and 2023, actively shaping its economic agenda and leading initiatives such as the Regional Comprehensive Economic Partnership (RCEP).
• G20 Presidency: Indonesia successfully hosted the G20 Summit in Bali in 2022, navigating complex geopolitical tensions and securing a Leaders' Declaration. Under the theme 'Recovery Together, Recover Stronger,' its presidency focused on global health architecture, sustainable energy transition, and digital transformation, notably establishing the Pandemic Fund.
• 'Free and Active' Foreign Policy: Indonesia maintains a 'free and active' foreign policy, aiming to assert its independence, participate actively in global affairs, support decolonization movements, and advocate for developing nations, while avoiding entanglement in major power conflicts.

Economic Strength and Global Contributions

Indonesia's economic might further solidifies its position as an influential middle power. The nation boasts a GDP of approximately USD1.3 trillion and a population exceeding 270 million, contributing nearly 40% of ASEAN's total GDP. Its control over half of the global nickel production highlights its significance in critical raw material markets.

Furthermore, Indonesia's digital economy is a significant regional player, contributing a substantial portion to ASEAN's total digital economy and projected for considerable growth. This economic dynamism, combined with its diplomatic efforts, positions Indonesia as a crucial mediator and stabilizer in international affairs. The country has previously demonstrated this role as a peacemaker during the 2008–2013 Cambodian–Thai border crisis.

Conclusion

The IEP report's findings affirm Indonesia's growing stature as a pivotal middle power. Through its strategic 'free and active' foreign policy, leadership in ASEAN and the G20, and significant economic contributions, Indonesia is increasingly influencing global dialogues and contributing to the evolving international order. This trajectory highlights the rising importance of middle powers in navigating a fragmented geopolitical landscape and shaping future global stability.