Andrey Gubin, PhD in Political Science, Director of Scientific Programs of the RISS Asia-Pacific Centre, Assistant Professor at the International Relations Department of Far Eastern Federal University, Expert of RIAC

At the present time the Asia-Pacific region is not the global periphery, but rather a place for potential confrontation between both the great and the growing powers. This is evidenced by a general growth in defense spending of key actors and reformatting of the regional security structure, linked to the changing role of the Unites States and active intervention by non-regional actors, such as India. The presence of old conflicts and increased economic competition are forcing Asia-Pacific countries to resort to the logic of military confrontation, both quantitatively and qualitatively building up their defensive capabilities to protect their national interests.

Asia-Pacific Parabellum

By the beginning of the 21st century, the Asia-Pacific region has become the largest buyer of arms and military equipment, outdistancing even the traditionally “hot” Middle East. At the same time the consequences of the economic crisis have almost no effect on the purchase amount. Political considerations are forcing states in the region to “keep themselves fit”. Even in a difficult time for the world economy, the period between 2000 and 2003, Asia-Pacific countries purchased arms at the cost of $35.4 billion [1]. Considering the size of the region and the high purchasing power of the countries, which GDP has been growing over the last 12 years, the Asia-Pacific region has become a vitally important market for the leading arms manufacturers such as the U.S., the European Union, Russia and Israel. Besides that, the growth of economic competition in the Pacific area has an adverse impact on international stability. External factors, such as the strengthening of India and piracy in the Gulf of Aden, are significantly impacting the regional situation.

According to IHS Jane’s, from 2008 to 2012, global arms sales grew by 30% to $73.5 billion and, by 2020, this figure may double. Such growth is achieved only as a consequence of the increasing purchasing share of such countries as China and India of the world arms trade. It is expected that by 2021 the share of the U.S. will be 30%, while the share of other Asia-Pacific countries will amount to 31%.

Due to a gradual reduction of defense spending, over the next eight years, Washington will not be able to allocate more than $472 billion towards its military needs. Meanwhile, the total military budget for the Pacific states will exceed $501 billion. According to Stockholm International Peace Research Institute (SIPRI) growth in expenditures for armaments is kept around the maximum values: in 2012, the corresponding expenditures totaled $1.75 trillion, 0.5% less than noted in the previous year. Despite some decline, in real terms this number is still higher than the total of military spending at the peak of the Cold War.

In general, it is obvious that balance in the arms market is gradually shifting towards the Asia-Pacific region. This can be partly explained by the presence of several serious conflicts, such as the Japan-China dispute over the Diaoyu/Senkaku islands, the Japan-Korea dispute over Takeshima/Dokdo islands, multilateral conflict over the Spratly archipelago and the nuclear issue on the Korean Peninsula. One cannot ignore the competition between India and China, Japan and China, China and Vietnam, Japan and the Republic of Korea, Thailand and Cambodia, Indonesia and Malaysia, etc. All of this is stimulating a real arms race in the region. This has led to an increase in not only the number of acquired combat systems, but also an improvement in their quality. Experts believe that in the near future the U.S. and Western Europe will lose their technological superiority, because Asia-Pacific states will be able not only to develop, but also copy supplied more advanced equipment.

Customers increasingly require global arms suppliers to invest in their defense industry. For example, Indian authorities, negotiating the delivery of Dassault Aviation 126 aircraft, put forward the condition that Indian companies should be responsible for 50% of all work and services under the concluded contract.

It is fair to say that all Asia-Pacific countries are taking all possible steps to gain access to high technologies around the world. They are acquiring licenses for manufacture, attracting investment on favorable terms for investors and spying on industrial and military secrets.

There is an alarming fact that the manufacturers are becoming more aggressive in competing for supplies to the Asia-Pacific region. They are offering not only all available weapons systems, but any systems they are individually developing as well as technology and licenses.

It is commonly supposed that arms export are most frequently used as a means for achieving military and strategic goals such as strengthening partnerships, supporting allies, and increasing interrelationship with armed forces from other countries. Also military supplies can be a powerful tool for demonstrating geopolitical patronage and can even guarantee the security of the recipient state [2]. In this context, there is an alarming fact that the manufacturers are becoming more aggressive in competing for supplies to the Asia-Pacific region. They are offering not only all available weapons systems, but any systems they are individually developing as well as technology and licenses. This has stimulated a qualitative leap in the capabilities of regional armed forces and has greatly increased the potential for conflict in the Asia-Pacific region. Since the beginning of 21st century, the Pacific states have been gradually acquiring new capabilities, such as long-distance military strikes, invisibility, integrated command, and the so-called C4ISR technology (Command, Control, Communication, Computers, Intelligence, Surveillance, Reconnaissance).

These trends are greatly complicating the international situation in the Asia-Pacific region because any military conflict, even a minor one, might result in colossal losses of human and material resources and bring down the regional economic system.

Korean renegades

For a long period of time, the lion’s share of weapons supplied to the Asia-Pacific came from the United States, which appeared undisputable hegemon in the Pacific area after the Second World War. However nowadays even traditional U.S. allies, since the signing the San Francisco Treaty in 1951, are seeing that priorities have shifted in the changing world.

In the same way that the countries of the region are trying to conduct independent foreign and trade policies, they are also actively diversifying the defense supplies, including for the purpose of avoiding dependence on any single exporter.

In light of active growth of China and the increasing aggressiveness of Japan’s foreign policy course, the Republic of Korea is trying to achieve, if not independence, but a reduction in its dependence on Washington. Long time Korea has been a key market for U.S. combat systems. The specifications of these systems weapons have not always played a decisive role during contract negotiations, because political factors had an impact. Washington did not hesitate to apply strong pressure on Seoul to make profitable deals. That is why, the decision by Korean leadership to refuse to purchase eight U.S. helicopters MH-60R of Sikorsky group, instead choosing cheaper but equally high quality competitive products (the AW159 Wildcat produced by British-Italian AgustaWestland Company) was a complete surprise. The value of the transaction was 600 billion won (more than $500 million).

It should be noted that, from 2008 to 2012, the number of arms purchased by the Republic of Korea increased by 688%. From 2013 to 2018, Seoul plans to purchase arms at a total of $64 billion (70 trillion won), a huge sum of money. And U.S. dominance in the supply isn’t obvious at all. Some “contract of the century” is the FX-3 project, calling for the purchase of 60 fighters to the value of $8 billion. The most realistic contenders are Lockheed Martin with its fifth generation F-35 Joint Strike Fighter; Boeing Company, offering the F-15 SE Silent Eagle and the European EADS concern with its Eurofighter jet. All of three proposals are 15-40% more expensive than the budget allows for, that is creating a real opportunity for Russian Su-35 or even Chinese J-10 to participate in the tender.

The new Park Geun-hye presidential administration in the Republic of Korea is clearly focused on social projects, which affects defense spending as result. In 2013, the spending will reach about $33 billion. It is only 3.8% higher than in 2012. In order to reduce expenditures, Korea has cut spending on programs to buy new combat helicopters, drones and air tankers, participation in which U.S. companies were expected to take part. However, financial difficulties don’t change the policy pursued by the Korea aimed at achieving a technological breakthrough in the field of national security.

It seems that South Korea could become the “first sign” in undermining the American military-technical and military-political hegemony in the Asia-Pacific region. This is especially true in light of the recent Korean-Chinese rapprochement, declared by the leaders of the two countries during their meeting in Beijing.

“Hot Southern Guys”

Perhaps the most dynamic region, concerning military activity by the states, is Southeast Asia (SEA). The Southeast Asian arms market is quite small; its total is estimated at $2-3 billion annually. However, it is quite diverse in terms of supplier, especially if we compare it with Northeast Asia. The USA, Russia, Britain, France, Sweden and China are operating successfully in the region. In the same way that the countries of the region are trying to conduct independent foreign and trade policies, they are also actively diversifying the defense supplies, including for the purpose of avoiding dependence on any single exporter. A perfect example of the openness of the regional arms market was offered, when at the aerospace exhibition in Singapore, Thailand purchased six Swedish fighters “Gripen” and control aircraft costing $ 600 million. In the future the number of the fighters purchased will increase to 40. At the same time, Bangkok has acquired anti-ship missiles in China, self-propelled howitzers in France and assault rifles in Israel.

Malaysia purchased a consignment of tanks PT- 91 in Poland, front-line SU-30 fighters in Russia, multiple launch rocket systems in Brazil and corvettes in Germany. Indonesia in their turn used a loan of $1 billion to buy Russian SU-27 and SU-30 fighters, submarines, combat helicopters, patrol boats and land-based weapons systems. Even Singapore has created an extensive network of suppliers of weapons, purchasing 24 tactical F-15SG fighters from the U.S., the “Västergötland” and “Sermen” submarines from Sweden, “Leopard 2A4” tanks from Germany, and anti-aircraft missile systems from Russia and Sweden.

The acquisition of advanced weapons systems by the countries of SEA will lead to an escalation of the classic “security dilemma”, when improvements in the security sphere for one participant are achieved at the expense of another, bringing instability to neighboring countries.

According to some estimates, the total arms market of Southeast Asian countries will grow, because the region’s economies gradually recover, and the governments increase their defense budgets. For example, after the coup in 2006, the Thai military junta raised military spending by 34% in 2007 and by 24% in 2008. Moreover, the ten-year plan of the development of the armed forces approved in November 2007 provides for the allocation of about $10 billion to the modernization program beginning in 2009, which in the end run will increase its share of GDP from 1.4% to 2% by 2014.

According to SIPRI other countries in the region are showing a similar growth dynamics of expenditures. For example, Malaysia’s military budget has almost doubled from 2000 to 2011 – from $1.7 to $3.26 billion. Jakarta has tripled the defense spending during the same period – from $2.2 to $6.8 billion, without even taking into account its trade credits. Singapore, whose military spending from 2000 to 2012 rose from $4.6 to $9.7 billion, is not going to stop there and is ready to purchase high-tech combat systems.

Increasing the military capabilities of Southeast Asian countries is able to significantly destabilize the situation in the region. One of the fields of confrontation is the so-called Ambalat opposition block in the Celebes Sea, which is the matter of dispute between Indonesia and Malaysia. If the parties do not abandon the logic of military confrontation, tension in the area will gradually increase. It should be noted that Southeast Asia countries (especially Thailand, Indonesia and Malaysia) have traditionally used offset schemes when signing agreements about the supply of arms and military equipment and compensated a certain share of the costs by substituting consumer goods (rice, palm oil, fruit, textiles, etc.). Such policy is a good help for local producers.

In order to increase its share of military-technical cooperation, Russia needs to reconsider its system of relationships with foreign partners, specifically, to begin the joint development of high-tech arms and sales of weapon technologies and to create licensed production inside the territory of foreign countries.

In these latter days Southeast Asian countries have actively called for the widespread adoption of military and dual-use technologies in the industry. But they still do not find support of leading suppliers. However, this issue may become more and more relevant with increased competition in the arms market. The acquisition of advanced weapons systems by the countries of SEA will lead to an escalation of the classic “security dilemma”, when improvements in the security sphere for one participant are achieved at the expense of another, bringing instability to neighboring countries.

It is likely that in the nearest time, the regional security subsystem will undergo significant transformations, including account of more aggressive actions by Beijing and Washington, which are actively competing for the dominance in SEA. Taking into account the situation in South Korea described above, the rise of China is even more likely. This situation is complicated by competition between Malaysia and Indonesia and the growing interest of India in the region. In this view, it is possible to speak about an escalation of tensions in Southeast Asia, but the probability of a full-scale armed conflict is low, because defense capabilities are needed to regional players for mutual deterrence and their independence from Washington, Beijing and Delhi.

“Not a Pacific” Ocean and Russia

In light of the events taking place in the Asia-Pacific region and the priorities established by the new Foreign Policy Concept of Russia, the future of military-technical cooperation of our country with the leading players in the Pacific is attracting special interest.

According to the Federal Service for Military-Technical Cooperation (FSMTC), states in the region can be divided into three groups, depending on the degree of interaction between Russia and Asia Pacific. The first group includes countries with which the military-technical cooperation has a long history. This is developed on a regular basis and with significant volumes of concluded contracts (Indonesia, Malaysia and Myanmar). The second group includes Bangladesh, Thailand, Sri Lanka and Singapore, which are involved in cooperation on a small scale. The third group consists of countries with which we do not have any cooperation (Australia, New Zealand, the Philippines, the Maldives, Brunei, Nepal, Fiji and Papua New Guinea). This is caused both by objective reasons (a lack of funds for the arms and military equipment purchase) and the focus of these countries on Western suppliers of products for military purposes.

Russia needs to revise its system of relations with foreign partners in order to build-up the volume of military-technical cooperation. More specifically, Russia should proceed to the joint development of high-tech arms, provide for sales of weapon technologies and create licensed production inside the territory of foreign countries. The FSMTC considers that patrol ships, engineering systems and radar systems will become quite popular in the region. However, the recent experience of Russian military-technical cooperation with China has shown that the transfer of Russian technology eventually results in losses because of the common practice of “adapted copying” used by foreign partners. In this regard, it requires a significant conditions tightening of the license agreements, which, in turn, will reduce the competitiveness of Russian products.

Russia’s share in the market of arms and military equipment of the Asia-Pacific region is about 20%; the share of the U.S., according to the data from 2011, is 42%. Nevertheless, in light of fierce competition, even just maintaining one’s position on the regional market is very difficult. However, Russia is planning to sign contracts for large supplies of arms and military equipment to India, Japan, South Korea, Taiwan, Australia and China.

Russia will suffer negative consequences because of a significant reduction in military-technical cooperation with China if China achieves self-sufficiency in armaments planned for 2015-2020. A similar situation may develop with regards to India, which has started to pursue an active policy for developing its own defense industry.

Moscow is using every effort to hold its own in such a complex, but promising region. In 2011, the first batch of four Su-30MK2 fighters was supplied to Vietnam. In all, the plan was to deliver 8 planes worth about $400 million. In the first half of 2011, the Myanmar Air Force received the first batch of 20 MiG-29 fighters ordered under contract with Russian Aircraft Corporation MiG, it worth $553 million. According to the contract signed in late 2009, ten MiG-29B and six MiG-29SE jets as well as four fighter trainer MiG -29UB will be delivered to Myanmar. The ground forces in Thailand bought three medium transport Mi-17V-5 helicopters, to the value of $29.1 million dollars, including the supply of spare parts and training. “Rosoboronexport” (Russian Defence Export) signed another contract in 2011 to supply China with 123 AL- 31FN engines valued at more than $500 million. Russia also completed the delivery of nine radar picket helicopters Ka-31 to China. For another thing, in 2007 China signed a contract for the supply of the nine anti-submarine Ka-28 helicopters. It is also expected to deliver a batch of 37 infantry combat vehicles (BMP-3F) to Indonesia, worth more than $100 million. Seventeen such vehicles were delivered in the past and the contracts for the supply of the Mi-17 and Mi-35 helicopters and aircraft armament systems are being currently carried out.

More than 90% of Russian arms exports to the Asia-Pacific region fall to China, Vietnam, Indonesia and Malaysia. Deliveries to other countries of the region are more sporadic. In some large markets, especially in South Korea and Singapore, the products created by Russian military-industrial sector are not well represented. Experts believe that, Russia will have to seek new markets, because of a gradual reduction in exports to China. Since it is unlikely that Russia will supply South Korea and Singapore with finished equipment, the most promising option for Russia in the field of military-technical cooperation may be the joint development of weapons systems.

More than half of Russian military exports to the Asia-Pacific region and neighboring India fall to combat aircraft. In this regard, Russian positions will largely depend on the development of programs for constructing new aircrafts and modernizing existing ones, including the construction of the Su-35 fighter, the fifth generation PAK FA fighter, the Yak-120 trainer aircraft and helicopters. According to other objects, Russian positions are not as strong and promising.

According to the experts research, Russia will suffer negative consequences because of a significant reduction in military-technical cooperation with China if China achieves self-sufficiency in armaments planned for 2015-2020. A similar situation may develop with regards to India, which has started to pursue an active policy for developing its own defense industry (including the help of foreign investment). Opportunities for Russian exports will be also affected by a sharp reduction in technological advances in its defense sector, started after the end of the Cold War [3].

Another factor affecting the state of Russia’s military security in the Asia-Pacific region is, in particular, the presence of states with a high level of defense spending, with numerous and well-equipped armed forces, which are in some phase of reform and modernization [4].

Russia will not only have to find ways to increase supplies of military equipment to the markets of Asia-Pacific region, but also to actively introduce the latest weapons designs. Otherwise, Russia carries a risk becoming a “technological outsider” and a “second-rate power”. It could adversely impact on the Russian foreign policy in the Pacific Ocean.

1. Grimmett R.F. Conventional Arms Transfer to Developing Nations, 1996–2003. Washington, US Congressional Research Service, August 26, 2004. P. 11, 37.
2. Битцингер Р. Распространение оружия и наращивание военных потенциалов в Азиатско-Тихоокеанском регионе: современные системы вооружений // Вызовы безопасности в Азиатско-Тихоокеанском регионе: взгляд из России и США. Владивосток, 2006. С. 172.
3. Карякин В.В. Военная политика и стратегия США в геополитической динамике современного мира: М., 2011. С. 226–227.
4. Там же. С. 223–224.

Source: http://russiancouncil.ru/inner/?id_4=2842#top-content

Translated by D. Mischenko – APIR Center