Military muscles bulging in SE
Asia By David Isenberg
KUALA LUMPUR - Southeast Asia's arms
market is booming, as governments in the region
shell out funds for everything from light arms to
fighter jets in a gathering race to keep pace with
their neighbors. Asia, driven mostly by China and
India, has in recent years emerged as the largest
developing-world market for arms sales, accounting
for nearly half of all global purchases made
between 2001 and 2004.
Southeast Asia's
military budgets are also soaring once again, as
governments ramp up arms spending after years of
belt-tightening
induced by the 1997-98 Asian
financial crisis. Southeast Asia's top five
military spenders, Indonesia, Malaysia, Thailand,
Singapore and Vietnam, had a combined military
budget of US$14.3 billion in 2004, according to
the United States' National Bureau of Asian
Research. Preliminary estimates show that regional
military spending was provisionally higher last
year.
If attendance at last week's arms
show in Kuala Lumpur is any indication, that
spending spree is set to carry over into 2006. The
10th annual Defense Services Asia Global
Tri-Service Defense and Government Security
Exhibition set an event record with more than 450
different global exhibitors, and although exact
figures for the amount of deals made at the show
were not made publicly available, it was clear to
those in attendance that business was, well,
booming.
Many Southeast Asian buyers spoke
about long-overdue military modernization needs as
the incentive behind their purchases. Others
suggested they needed to prepare to repel armed
insurgencies or unmentioned full state threats.
The unspoken subtext is the perceived need
to safeguard against China's growing military
might in the event Beijing someday takes on a more
aggressive foreign policy toward its smaller
regional neighbors. The Rand Corporation, a
respected US-based think-tank, estimates that
China, which claimed to have a $29 billion defense
budget last year, actually spent between $42
billion and $51 billion in a rapid, if not
secretive, military modernization drive.
There was plenty of geostrategic politics
at play at the Kuala Lumpur arms show. Russia,
which is aiming to ramp up global sales for its
military hardware and strategically counterbalance
China's growing economic influence in the region,
was particularly active in brokering deals.
Russian arms dealers have recently had a large
measure of success in peddling their wares in
Southeast Asia, signing contracts with Vietnam,
Malaysia and Indonesia for aircraft exports worth
nearly half of Russia's total global exports in
recent years.
Fourteen Russian
military-industry enterprises exhibited 450
samples of armaments and military hardware,
according to Rosoboronexport, the Russian
state-owned arms trader. These included the T-90S
and T-72M1 main battle tanks, BMP-3 infantry
fighting vehicles, and armored personnel carriers,
as well as 152-millimeter and 155mm Msta-S
self-propelled howitzers.
The Russian
aircraft company Sukhoi announced at the expo its
plans to promote an export version of its Su-34
assault planes, known as the Su-32, for countries
that already have Russian-produced Su-24 Fencer
fighter-bombers. In tit-for-tat fashion, Southeast
Asian governments are upgrading their air forces
to protect their aerial sovereignty better.
Russia registered a new post-Soviet
arms-sales record last year, exporting $6.1
billion worth of weapons. While China and India
are still Moscow's top customers, several
Southeast Asian militaries, particularly those of
Indonesia and Malaysia, have taken a liking to
Russia's comparatively cheap wares. Russian
fighter jets have been particularly popular:
Myanmar's ruling generals spent $150 million on 10
MiG-29 fighters in 2001; Malaysia was first in the
region to buy Russian planes in 1994.
Thailand, which is battling a spiraling
insurgency in its southernmost provinces,
confirmed last December high-level discussions
with senior Russian officials about terms and
conditions for a planned purchase of an
undisclosed number of Su-30 jet fighters. If the
deal goes through, it would represent a notable
new direction for Thai air force procurements,
which traditionally have been purchased from the
United States. Thailand currently has a fleet of
aging F-16s and had to put plans to buy more
advanced F-18s on hold in the wake of the regional
financial crisis.
Expo host Malaysia,
whose officials are hoping to establish the
country as a regional defense-market hub, were
particularly acquisitive, partially with Thailand
in mind. As recently as a few years ago, the
Malaysians did not have a main battle tank, an
Su-30 fighter jet or a submarine - all of which
they now have or plan to acquire.
Local
Malaysian companies and foreign arms dealers
signed 13 different memoranda of understanding and
agreements related to defense, many of which had
been pre-approved as required by Malaysia's
military procurement system. Defense Minister
Najib Tun Razak said Malaysia signed RM1.1 billion
($304 million) worth of contracts, letters of
acceptance and letters of intent with arms dealers
at the show.
Eager to modernize its
military to help deal with the threat of regional
terrorism, Najib handed out defense contracts
worth nearly $220 million on the first day of the
show, including with European giant EADS and
Armaris, a joint venture between a French
state-owned shipyard and Thales Communications.
Another deal saw Malaysian heavyweight
Defense Technologies Sdn Bhd, or DefTech, the main
supplier of defense vehicles to the Malaysian
Armed Forces, sign strategic collaborations with
five foreign partners, including Switzerland's
MOWAG GmbH and Ruag Land Systems, France's Thales
Communications, Belgium's FN-Herstal and Turkey's
FNSS Defense Systems for the supply of field
vehicles, weapon systems, spare parts, and
technology transfer to the local defense industry.
Apart from terrorist threats, Malaysia is
on the defensive for a variety of reasons,
including long-simmering territorial disputes with
Thailand, Indonesia, Brunei and the Philippines,
which could heat up as regional competition for
access to offshore oil and gas intensifies.
The conflict in southern Thailand along
Malaysia's northern border has recently emerged as
one of the region's security hot spots, at times
putting majority-Buddhist Bangkok and
majority-Muslim Kuala Lumpur at diplomatic
loggerheads.
Meanwhile, tensions are again
brewing with Malaysia's heavily armed neighbor
Singapore, which last year purchased 20 new US
F-15 fighter jets to bolster its air defenses.
Singapore, which is now lobbying Kuala Lumpur to
allow it to use Malaysian air space to train its
fighter pilots, has indicated it has a
"long-range" need for up to 100 new combat
aircraft.
Malaysian aerospace firm Airod
signed two agreements - technical services and
basic ordering - with Switzerland's Pilatus to
support of the Royal Malaysian Air Force's (RMAF)
PC-7 Mk I and Mk II aircraft. Russia was so eager
to close deals with Malaysia that it
diplomatically agreed to allow two Malaysian
cosmonauts to start training in Russia for a
journey to the International Space Station this
year.
Similarly, Moscow provided the
Indonesian military with $1 billion in credits to
purchase Russian military hardware. Last month,
Jakarta announced that it was buying an additional
six Sukhoi fighter jets from Russia in an effort
to beef up its air force, apparently to keep pace
with Malaysia's planned procurements.
Russia was not the only one aggressively
peddling its wares to Southeast Asia's militaries.
Polish arms manufacturers said they expected to
sign contracts worth several hundred million
dollars at the show. Poland's largest arms maker,
Bumar, is carrying out a $370 million contract to
deliver 48 PT-91 tanks to Malaysia.
In
March, Poland announced it had offered to extend a
$260 million soft loan to Indonesia in hopes of
reviving past military trade relations. In the
1990s, when Indonesia's economy and military
procurements were booming, Poland sold helicopters
and airplanes to Jakarta. The Indonesian military
recently ordered a fleet of new patrol boats from
Gdynia-based Navy Shipyards to shore up its
capability against piracy and possible sea-borne
terrorists.
Britain's BAE, meanwhile, was
specifically targeting the navies of Singapore,
Indonesia and Malaysia, which jointly patrol the
pirate-infested waters of the Malacca Strait, one
of the world's most important waterways for global
trade and increasingly considered a potential
target for global terror networks. BAE advertised
its new unmanned drone as "ideal" for
reconnaissance along the 900-kilometer strait.
David Isenberg, a senior analyst
with the Washington-based British American
Security Information Council (BASIC) and a member
of the Coalition for a Realistic Foreign Policy,
has a wide background in arms control and national
security issues. The views expressed are his
own.
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