42 Is South­east Asia’s Mil­i­tary Mod­ern­iza­tion Driven by China? It’s Not That Sim­ple

Global Asia - - CONTENTS - By Evan A. Laks­mana

a close anal­y­sis of the pat­terns of spend­ing and their de­vel­op­ment over the years.

Mil­i­tary spend­ing by South­east Asian na­tions is col­lec­tively among the high­est in the world, and some pol­icy-mak­ers in the re­gion cite the rise of China as a prin­ci­pal rea­son. But a close anal­y­sis of the pat­terns of spend­ing and their de­vel­op­ment over the years sug­gests that ex­pla­na­tion is, at best, too sim­ple, writes Evan A. Laks­mana.

south­east asia has been among the big­gest global de­fense spenders over the past decade. ex­pen­di­ture in the re­gion has risen by al­most 10 per­cent an­nu­ally on av­er­age since 2009. Re­gional na­tions have also been ac­quir­ing new war-fight­ing ca­pa­bil­i­ties, in­clud­ing in stand­off pre­ci­sion strike; long-range air­borne and un­der­sea at­tack; stealth, mo­bil­ity and ex­pe­di­tionary war­fare; and new con­trol, com­mu­ni­ca­tions, com­put­ing and re­con­nais­sance net­works — not to men­tion new fighter jets, sur­face war­ships and sub­marines.

Why are south­east asian states ag­gres­sively arm­ing them­selves? Many iden­tify China’s be­hav­ior as the pri­mary driver of south­east asia’s mil­i­tary mod­ern­iza­tion and ris­ing de­fense spend­ing. For al­most two decades, the con­cern over China’s mil­i­tary rise has been ac­com­pa­nied by un­cer­tainty over amer­ica’s strate­gic com­mit­ment to the re­gion, as ex­em­pli­fied by the Global War of ter­ror, the Iraq and afghanistan wars and the rise of Pres­i­dent Don­ald trump.

China’s mil­i­ta­riza­tion of the south China sea, for ex­am­ple, has been cred­ited with driv­ing Viet­nam’s rapid ca­pa­bil­ity de­vel­op­ment: its arms im­ports in 2011-15 were eight times those of the pre­vi­ous five years. By 2016, it had bought eight com­bat air­craft, four fast-at­tack craft and four sub­marines with six more frigates and two sub­marines on or­der. the Philip­pines, In­done­sia, Malaysia and thai­land are re­ported to be fol­low­ing a sim­i­lar tra­jec­tory. While very few be­lieve they could mil­i­tar­ily bal­ance China in a tit-for-tat fash­ion, the arms spree might nonethe­less im­pose a higher cost for China should it de­cide to en­gage in con­flict over dis­puted wa­ters, for ex­am­ple.

the China threat is only part of the story. We should not take re­gional of­fi­cials’ rhetoric at face value when they hint that their arms spend­ing is a re­sponse to China’s mil­i­tary rise. af­ter all, they may sim­ply use the grow­ing re­gional ten­sion to jus­tify pre-ex­ist­ing mil­i­tary de­vel­op­ment plans. the In­done­sian mil­i­tary (tni), for ex­am­ple, has re­cently called for a mil­i­tary buildup around the natuna Is­lands by cit­ing the grow­ing mar­itime crises in its wa­ters, although the plans were is­sued in the mid-2000s. also, as we shall see in the fol­low­ing sec­tions, the his­tor­i­cal bud­getary and tech­no­log­i­cal con­texts of re­gional force struc­ture sug­gest that China is not the sole driver of mil­i­tary mod­ern­iza­tion. the size of de­fense bud­gets alone or re­cent high-pro­file pro­cure­ment plans masked the long-term struc­tural chal­lenges of hu­man cap­i­tal de­vel­op­ment and tech­no­log­i­cal im­port de­pen­dence. In other words, we need to lo­cate south­east asia’s re­cent mil­i­tary de­vel­op­ments and pro­cure­ment plans in a broader con­text.

un­pack­ing DE­FENSE bud­gets

the size of a de­fense bud­get alone is not a very use­ful in­di­ca­tor to mea­sure the de­vel­op­ment of de­fense ca­pa­bil­i­ties. Var­i­ous do­mes­tic, eco­nomic, bu­reau­cratic or his­tor­i­cal rea­sons could shape the size of the de­fense bud­get. so a bud­getary spike is rarely a sim­ple equiv­a­lent to an ex­ter­nal mil­i­tary threat re­sponse. Fig­ure 1 shows how In­done­sia, Malaysia, sin­ga­pore, the Philip­pines, thai­land, Myanmar and Viet­nam al­lo­cate their de­fense bud­gets. It com­pares four spend­ing cat­e­gories — op­er­a­tions & main­te­nance, per­son­nel, re­search and de­vel­op­ment, and pro­cure­ment — as mea­sured in 2012-16 and as pro­jected for 2017-21.

the data in Fig­ure 1 un­der­score that in south­east asia, most of the de­fense bud­get is al­lo­cated to rou­tine ex­pen­di­tures, par­tic­u­larly per­son­nel (e.g. salaries, ben­e­fits, ed­u­ca­tion and train­ing) as well as op­er­a­tions and main­te­nance costs. all seven coun­tries spent, on av­er­age, al­most 80 per­cent of their 2012-2016 bud­gets on these rou­tine ex­pen­di­tures (by 2021, this fig­ure is fore­cast to go down only to 75 per­cent). they spent less than 20 per­cent of their 2012-2016 bud­gets on new ca­pa­bil­ity de­vel­op­ment — i.e. re­search and de­vel­op­ment as well as pro­cure­ment. this roughly trans­lates to less than a bil­lion dol­lars a year on av­er­age for ca­pa­bil­ity de­vel­op­ment.

Fur­ther­more, per­son­nel spend­ing rel­a­tive to over­all de­fense bud­gets seems to be al­most con­but

stant for the past sev­eral decades. as such, one might ar­gue that the re­cent de­fense bud­getary spike could be at­trib­uted to the ris­ing cost of main­tain­ing ex­ist­ing per­son­nel and en­sur­ing op­er­a­tional readi­ness rather than ob­tain­ing new tech­no­log­i­cal ca­pa­bil­i­ties. af­ter all, given the his­tor­i­cal promi­nence of the mil­i­tary in the po­lit­i­cal de­vel­op­ment of south­east asian states, per­son­nel spend­ing has a “path-de­pen­dent” qual­ity visà-vis the de­fense bud­get.

and yet, as Fig­ure 2 shows, re­gional mil­i­taries’ hu­man cap­i­tal de­vel­op­ment — mea­sured by the amount of money spent per sol­dier — re­mains low. sin­ga­pore, with one of the re­gion’s small­est mil­i­taries, out­strips oth­ers in per­son­nel spend­ing per sol­dier. Viet­nam, Myanmar and In­done­sia as the three largest mil­i­taries al­lo­cate the least amount of re­sources (their av­er­age salary lev­els are among the low­est in the re­gion). this par­tially re­flects the mil­i­tary’s his­tor­i­cal ex­pe­ri­ence of fight­ing in­ter­nal wars and ad­dress­ing do­mes­tic se­cu­rity con­cerns — which tend to re­quire more man­power than high-end, ex­pen­sive weaponry.

these fig­ures sug­gest that: 1) de­fense bud­gets have been and will con­tinue to be al­lo­cated for rou­tine ex­pen­di­tures, pri­mar­ily per­son­nel spend­ing, and 2) the level of hu­man cap­i­tal de­vel­op­ment re­mains com­par­a­tively low. If coun­ter­ing China re­quires a mod­ern, pro­fes­sional force staffed with high-qual­ity per­son­nel man­ning the lat­est tech­nol­ogy, then most south­east asian coun­tries are way be­hind the curve. While pro­cure­ment trends will keep ris­ing, their real value re­mains com­par­a­tively small; with In­done­sia (us$2.1 bil­lion), sin­ga­pore (us$1.9 bil­lion), and Viet­nam (us$1.2 bil­lion) pos­si­bly lead­ing the way by 2021. these are sig­nif­i­cantly lower than the amount Ja­pan, In­dia, south Korea and cer­tainly China will spend on pro­cure­ment in com­ing years (pos­si­bly more than us$100 bil­lion by 2024).

force struc­ture and op­er­a­tional de­mands

since the post-cold War era, most arms im­ports to south­east asia have been for sev­eral key types of plat­forms, par­tic­u­larly air­craft, ships and sen­sors or for C4ISR (com­mand, con­trol, com­mu­ni­ca­tions, com­put­ers, in­tel­li­gence, sur­veil­lance and re­con­nais­sance) ca­pa­bil­i­ties, as well as mis­siles, as Fig­ure 3 be­low sug­gests. the over­all fo­cus of the ma­jor im­ports seems to be on sen­sory, air and naval ca­pa­bil­i­ties. In fact, the re­gion’s naval forces have had a rel­a­tively con­stant force struc­ture over the past few decades, es­pe­cially for In­done­sia, Malaysia, Viet­nam and sin­ga­pore. these mar­itime states have nat­u­rally em­pha­sized sur­face com­bat­ants and am­phibi­ous as­sault as­sets. these pat­terns largely per­sist, even as sin­ga­pore, Malaysia and Viet­nam re­cently joined In­done­sia as sub­ma­rine op­er­a­tors

pos­si­bly thai­land as well). Re­cent pro­cure­ment of new frigates and pa­trol ships, for ex­am­ple, seems to re­in­force ex­ist­ing force struc­tures cen­tered on naval ca­pa­bil­i­ties.

these trends do not, how­ever, nec­es­sar­ily re­flect a pre­oc­cu­pa­tion with China’s po­ten­tial threat in the mar­itime do­main. there are two other pos­si­ble in­ter­pre­ta­tions of the pat­tern. First, south­east asia’s force pos­ture re­flects con­cerns over a wide range of chal­lenges, from mar­itime dis­putes and ter­ri­to­rial in­cur­sions to coun­ter­ing piracy, traf­fick­ing and il­le­gal fish­ing. south­east asian states have also tra­di­tion­ally tried to fol­low or mimic their neigh­bor’s ca­pa­bil­ity ac­qui­si­tions, par­tic­u­larly in the mar­itime do­main.

sec­ond, when we con­sider the re­gion’s com­plex strate­gic en­vi­ron­ment and the or­ga­ni­za­tional his­tory of its mar­itime se­cu­rity gover­nance — where navies com­pete with other do­mes­tic mar­itime law en­force­ment agen­cies — un­sur­pris­ingly, naval as­sets, even frigates, are of­ten used for dayto-day pa­trols and se­cu­rity op­er­a­tions rather than “re­served” for high-end naval bat­tles. this “mul­tiuse” of naval plat­forms is, of course, not unique to south­east asia. But in­fer­ring op­er­a­tional de­mands and util­ity from the broad cat­e­gories of naval force pos­ture alone can­not take us very far in eval­u­at­ing whether south­east asia’s mil­i­tary mod­ern­iza­tion has been di­rected ex­plic­itly, con­sis­tently and sys­tem­at­i­cally against China.

re­ju­ve­nat­ing old Equip­ment

Pro­cure­ment bud­gets have also been al­lo­cated for the re­plen­ish­ment of old equip­ment. as most of south­east asia’s weaponry is im­ported, we could rea­son­ably fo­cus on the age of im­ported mil­i­tary tech­nol­ogy as a mea­sure of the over­all age of ex­ist­ing plat­forms. Fig­ure 4 over­leaf de­scribes the av­er­age age of all im­ported mil­i­tary tech­nol­ogy into south­east asia by 2016. Viet­nam, laos and the Philip­pines ap­pear to have the old­est weaponry (more than 35 years on av­er­age). Fig­ure 4 is based on over 2,500 items (cat­e­go­rized into more than two dozen plat­forms, from air­craft to en­gines), im­ported at dif­fer­ent times be­tween 1950 and 2016. some coun­tries may have “younger” plat­forms, but have more ur­gent op­er­a­tional de­mands, which pushes them to mod­ern­ize their plat­forms more quickly than oth­ers.

Given the heavy re­liance on im­ports, the mod­ern­iza­tion process re­mains struc­turally de­pen­dent on a highly di­verse set of for­eign sup­pli­ers. this mat­ters be­cause the more for­eign sup­pli­ers a state has, the higher the cost for plat­form in­ter­op­er­abil­ity, ed­u­ca­tion and train­ing, as well as main­te­nance, re­pair and over­haul sys­tems. Given the al­ready small bud­get space al­lo­cated to pro­cure­ment and R&D, rad­i­cally or fun­da­men­tally re­duc­ing for­eign de­pen­dence is dif­fi­cult. these prob­lems are path-de­pen­dent be­cause of the ini­tial start-up cost when coun­tries first im­ported plat(with

forms re­quir­ing ex­pen­sive and of­ten sprawl­ing sup­port­ing sys­tems. this sunk cost of­ten means there is lit­tle in­cen­tive to change sup­pli­ers — at least for com­plex sys­tems such as fighter air­craft — be­cause that would re­quire also chang­ing the sup­port­ing in­fra­struc­ture.

un­sur­pris­ingly, the num­ber of sup­pli­ers for each south­east asian state has been al­most con­stant since the 1950s, as Fig­ure 5 op­po­site shows. In to­tal, there have been 55 dif­fer­ent weapons sup­pli­ers to 10 south­east asian states be­tween 1950 and 2015 — on av­er­age each coun­try has 19 dif­fer­ent sup­pli­ers, rang­ing from nine in laos to 32 in In­done­sia. One in­ter­pre­ta­tion is that the bipo­lar Cold War con­text in which south­east asian states “locked in” sup­pli­ers made it harder over time to switch due to bud­getary con­straints, sunk cost and im­port de­pen­dence.

this sup­plier di­ver­sity also helps ex­plain why a hand­ful of coun­tries have come to dom­i­nate the south­east asian mar­ket over time, even if in­di­vid­ual re­cip­i­ents add one or two new sup­pli­ers (for a se­lect few plat­forms), or even if each sup­plier’s mar­ket share fluc­tu­ates over time. In this re­gard, the united states far out­stripped any other sup­plier in terms of value of im­ports, although China and the ussr/rus­sia com­bined would over­take this po­si­tion. af­ter China and Rus­sia, Western euro­pean sup­pli­ers have dom­i­nated the re­main­ing mar­ket share.

the per­sis­tence of such struc­tural de­pen­dence is ex­pected given that re­place­ment of most ag­ing equip­ment or weaponry is eas­ier and/or more af­ford­able if pur­chased from the orig­i­nal sup­plier or its net­work. this de­pen­dence is again ex­ac­er­bated by the per­sis­tently small pro­cure­ment or R&D bud­get in south­east asia (with the ex­cep­tion of sin­ga­pore).

the struc­ture of for­eign dom­i­na­tion also is not evenly spread across south­east asia. the ussr/rus­sia and China, for ex­am­ple, have been pri­mary sup­pli­ers in a few coun­tries like Viet­nam. Mean­while, the us seems to con­trol most of the mar­ket share in the Philip­pines and sin­ga­pore (de­spite a drop from around 83 per­cent to 56 per­cent and from 62 per­cent to 56 per­cent, re­spec­tively, dur­ing the post-cold War era, per data from the stock­holm In­ter­na­tional Peace Re­search In­sti­tute). euro­pean sup­pli­ers seem to be more preva­lent out­side of Viet­nam with smaller shares of the mar­ket.

In short, it ap­pears that: 1) there is a vari­a­tion in each for­eign sup­plier’s mar­ket share within in­di­vid­ual south­east asian states, but not nec­es­sar­ily the num­ber of sup­pli­ers over­all, and 2) the rel­a­tively con­stant num­ber of sup­pli­ers means that when south­east asian states pub­licly jus­tify their arms im­ports in de­fense autarchy terms, they could sim­ply re­duce the mar­ket share of one ex­ist­ing sup­plier and in­crease the share of another.

Con­clu­sions and im­pli­ca­tions

the pre­ced­ing sec­tions of­fer sev­eral find­ings. First, south­east asia’s de­fense bud­gets have largely gone to rou­tine ex­pen­di­tures, es­pe­cially per­son­nel spend­ing, rather than new ca­pa­bil­ity de­vel­op­ment. While new warfight­ing ca­pa­bil­i­ties might grad­u­ally ar­rive, es­pe­cially in the mar­itime do­main, the scale of such ac­tiv­i­ties re­mains limited and only ap­plies to a small num­ber of coun­tries such as sin­ga­pore and Viet­nam. Re­gional

coun­tries also do not ap­pear to his­tor­i­cally tai­lor their en­tire pro­cure­ment plans or warfight­ing strate­gies to China, ex­cept per­haps for Viet­nam. In­stead, they are of­ten more hard-pressed to meet their daily op­er­a­tional de­mands such as mar­itime pa­trol or bor­der se­cu­rity. Fur­ther­more, many coun­tries still im­port their weaponry from China, the re­gion’s third-largest sup­plier. as such, there is lit­tle ev­i­dence that south­east asia is sys­tem­at­i­cally pre­par­ing to or ca­pa­ble of bal­anc­ing China in mil­i­tary terms.

sec­ond, as the bud­get space for cap­i­tal ex­pen­di­tures re­mains his­tor­i­cally and com­par­a­tively low, south­east asian states have re­lied, and will con­tinue to rely, on the same set of for­eign sup­pli­ers for their im­ported arms and weapons sys­tems. While each of these sup­pli­ers’ mar­ket share varies over time, the in­abil­ity of re­gional de­fense in­dus­trial bases to pro­vide the next gen­er­a­tion of com­plex weaponry means that the struc­tural im­port de­pen­dence will per­sist. this trend is re­in­forced by the in­creas­ing need of re­gional states to re­place their ag­ing plat­forms to meet press­ing day-to-day op­er­a­tional de­mands.

Fi­nally, these find­ings do not im­ply that the re­gion isn’t con­cerned with China’s ag­gres­sive be­hav­ior. they sim­ply show that the con­cern has not been trans­lated into a mil­i­tary re­sponse. Mil­i­tary as­sis­tance pro­grams from the us, for ex­am­ple, may be pre­sented as ad­di­tional help to “counter China,” but there is no solid ev­i­dence to sug­gest they are suf­fi­cient to change Bei­jing’s cal­cu­lus. as the pre­ced­ing sec­tions show, the struc­tural chal­lenges fac­ing south­east asian mil­i­taries, from hu­man cap­i­tal de­vel­op­ment to bud­get al­lo­ca­tion and im­port de­pen­dence, are too chal­leng­ing for any for­eign as­sis­tance pro­grams.

Con­se­quently, aside from con­tin­u­ing eco­nomic en­gage­ment, some say to the point of al­low­ing Bei­jing to raise its stake in the re­gion’s wel­fare, south­east asian states still pre­fer to deal with China through diplo­macy, mul­ti­lat­er­ally through the as­so­ci­a­tion of south­east asian na­tions or bi­lat­er­ally through strate­gic part­ner­ships. af­ter all, for many re­gional states, bi­lat­eral ties with China are of­ten a po­lar­iz­ing do­mes­tic po­lit­i­cal is­sue. any ex­pec­ta­tions that south­east asian states are will­ing and able to mil­i­tar­ily bal­ance China — and just need a lit­tle help from the us or other ma­jor pow­ers to do so — need to tem­pered.

Evan a. laks­mana is a se­nior re­searcher at the Cen­tre for strate­gic and in­ter­na­tional stud­ies (Csis) in jakarta, in­done­sia. he is also cur­rently a vis­it­ing fel­low at the Na­tional bureau of asian re­search in wash­ing­ton, dc. parts of this es­say draw on the au­thor’s up­com­ing re­port for rand Cor­po­ra­tion on strate­gic trends in south­east asia and us-china re­la­tions.

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