Asia Ups Defence Spending, Becoming Increasingly Militarised

It might be big business in the developed and industrialised countries but the defence industry is flexing its muscle with greater intent when it comes to displaying, developing and selling their wares to countries in Asia. That was aptly displayed at the recent Defence Services Asia (DSA) expo in Malaysia, where 850 companies from 45 countries participated in the four-day event, showing the variety of arsenal from handguns to jetfighters. The reason for such a display boils down to what drives the industry spending. And it's no surprise much of that is taking place in Asia.

A report by IHS Jane's, a defence industry publication, has forecast China's military spending will outstrip the combined total of NATO's top eight members Britain, France, Germany, Italy, Turkey, Canada, Spain and Poland excluding the United States by 2015. Furthermore, growth in spending is taking off not just in China but also in South-East Asia, which has spurred its spending.

A report by the Stockholm International Peace Research Institute shows that the region increased its defence spending by 13.5 per cent last year, to $24.5billion. The figure is estimated to skyrocket to $40billion by 2016, with the report noting that Malaysia's defence spending has also risen. As observers have noted, Asia will outspend Europe this year. The London-based International Institute for Strategic Studies (IISS) says in the think tank's “The Military Balance 2012” annual report that China's spending has fuelled other growing Asian states into pouring more funds into their military and defense.

According to the IISS, Asia, excluding Australia and New Zealand, spent $262billion on defence in 2011 with China alone accounting for $89billion compared with NATO's European members, which spent about $270billion. Asian countries increased their defence budget by more than 3 per cent in real terms last year, the IISS said. China increased its share of total military expenditure on weapons in the region to more than 30 per cent.

Western analysts point to China's plans for naval "force projection" to defend its growing economic interests in Africa and elsewhere, and secure maritime lanes of communication. More immediately significant is China's development of anti-satellite capacities, anti-ship ballistic missiles, cruise missiles, and cyber-warfare capabilities. "Managing tensions in the South China Sea will be an increasing challenge," said the IISS report.

Defence analysts also pointed to potential tensions between the US and China being aggravated by Beijing refusing to agree to confidence-building measures along the lines of those between the US and the Soviet Union during the cold war. "China does not want to give a seatbelt to the US," one defence analyst said. Australia, Indonesia, Malaysia, Singapore, Thailand and Vietnam are all investing in improving air and naval capacities, as are India, Japan and South Korea. India, for instance, plans to boost maritime capacities with submarines and aircraft carriers, said the IISS.

In Europe, defence budgets remain under pressure and cuts to equipment programmes continue. Between 2008 and 2010 there were reductions in defence spending in at least 16 European NATO member states. In a significant proportion of these, cuts in real terms exceeded 10 per cent. According to a report from the Stockholm International Peace Research Institute (SIPRI), Singapore is now the fifth-largest arms importer in the world, bested only by some obvious behemoths—China, India and Pakistan—plus South Korea. Singapore accounts for 4 per cent of the world’s total spending on arms imports. Its defence spending per head beats every country bar America, Israel and Kuwait. This year $9.7 billion, or 24 per cent of the national budget, will go on defence.

These are striking figures, but then Singapore has been one of the bigger spenders in the region since its rancorous split from Malaysia in 1965. The difference now is that almost every country in South-East Asia has embarked on a similar build-up, making it one of the fastest-growing regions for defence spending in the world. Military analysts at IHS Jane’s say that South-East Asian countries together increased defence spending by 13.5 per cent last year, to $24.5 billion. The figure is projected to rise to $40 billion by 2016. According to SIPRI, arms deliveries to Malaysia jumped eightfold in 2005-09, compared with the previous five years. Indonesia’s spending grew by 84 per cent in that period.

Indonesia is spending $8 billion this year on defence—still rather modest for a country of 240m, but up sharply from $2.6 billion in 2006. Much is going on new hardware and spare parts. The country has acquired Russian and American warplanes, including F-16 fighters, vessels for its navy, and spare parts for its C-130 transport planes. In January Indonesia signed a $1.1 billion deal for three German-made diesel-electric submarines, and lawmakers are debating whether to buy 100 Leopard tanks from the Netherlands.

Domestic political calculations are another factor behind the region’s defence splurge. Terence Lee at the National University of Singapore argues that in countries where the armed forces have meddled in politics, civilian politicians use larger defence budgets to buy political compliance from the military—Thailand is a case in point. Singapore, on the other hand, has a different motivation. It is the only country in the region building its own high-tech arms industry. Singapore has long sold weapons to other developing countries, but has recently been winning its first large orders from Western armies too. ST Engineering, the only South-East Asian firm in SIPRI’s top 100 defence manufacturers, has sold over 100 Bronco (or Warthog) armoured troop carriers to the British, for use in Afghanistan.

For all that, strategic concerns do count for something. For example, the sea lanes leading to the Strait of Malacca are the lifeblood of Singapore’s prosperity. And over the past decade, some may have worried that America was distracted by war elsewhere. So the growth of a Chinese blue-water navy has implications.

Strategic concerns also loom large for any country with a territorial claim to the disputed South China Sea, where China’s assertive stance has provoked a surge of spending by, for instance, Vietnam. The country recently ordered six Kilo-class submarines from Russia. Vietnam is also buying seven or so new frigates and corvettes over the next decade. In the Philippines the government of President Benigno Aquino almost doubled the defence budget last year, to $2.4 billion.

Meanwhile, Russia’s deputy prime minister Dmitry Rogozin faces a formidable challenge of modernising Russia’s military-industrial complex. He should not be deterred in this vital national mission by alarmists and doubters, says Aleksey Volodin. The strategy for the development of the military-technical field will consist of two main areas: the development of Russia's own production capacity and the creation of joint ventures for the production of military equipment.

Also, Japan is building its military muscle to play a bigger role in Asia and the rest of the world, and it is making its military might more visible.  Japan changed its defense policy last December to allow Japanese companies to export weapons and collaborate with countries other than its main ally, the US.  During British Prime Minister David Cameron's visit to Tokyo last week, it inked a deal with Britain on jointly developing and building defense equipment. It was Japan's first weapons-building covenant with a country other than the United States since the World War II.  Japan's desire to build up its military strength has been fueled by the pivoting of the US' strategic focus to the Asia-Pacific region. 

Although Japan's Constitution forbids offensive military operations, Japan has quietly built one of the most capable armed forces in the world. It has more than 250,000 men and women in uniform and its annual defense budget is about $56 billion, among the six largest in the world.  Japan is also extending its military presence overseas and focusing on the operational flexibility of its forces. 

Sources:

Richard Norton-Taylor/guardian.co.uk; By CHOONG EN HAN, han@thestar.com.my; Aleksey Volodin, Military Review Source: ITAR-TASS; Cai Hong (China Daily)