Go East or North? Recalibrating Defence Modernization in a Post-Russia Southeast Asia.

AuthorSavitri, Curie Maharani

Between 2000 and 2022, Russia was Southeast Asia's leading arms supplier. (1) However, following the passage of the Countering America's Adversaries Through Sanctions Act (CAATSA) by the Trump administration in 2017, followed by Russia's full-scale invasion of Ukraine in February 2022, countries that had bought arms from Russia have struggled to maintain their current inventory's operability. (2) Some have failed to undertake regular maintenance or execute procurement contracts, such as Indonesia's decision not to purchase Su-35 fighter jets from Russia. (3) But turning away from major arms suppliers, such as Russia, can be very costly and time-consuming. Russian arms are highly sought after because they offer high technology at a discounted price and without political strings attached. (4) Consequently, Southeast Asian countries need to adopt a new arms procurement approach that establishes alternative partnerships without jeopardizing their autonomy.Choosing arms suppliers is a complex decision for states in Southeast Asia, which lies at the epicentre of the strategic rivalry between the United States and China. (5) Although the United States still dominates the region, China's rising capabilities and influence means that it is gradually becoming a potential arms supplier. (6) However, China has been unsuccessful at filling the void left by Russia. China's global arms exports were valued at US$18.1 billion between 2017 and 2021, but they have fluctuated and there has been an overall decline in the trend of sales over that period. (7) Southeast Asian countries pursuing a "hedging" strategy between the two superpowers seek to avoid becoming too dependent on either US or Chinese technology. Additionally, the Southeast Asian states that have overlapping territorial and jurisdictional disputes with Beijing in the South China Sea, with the exception of Malaysia, are unlikely to buy weapons from their potential adversary. Indeed, of the six claimant states, only Malaysia has imported arms from China since 2000. (8) Consequently, certain Southeast Asia countries have instead turned to other "second tier" arms manufacturers, such as France, Israel and South Korea. (9) India is also emerging as an alternative partner, especially after its historic sale of BrahMos cruise missiles to the Philippines in 2022, an order worth US$375 million. (10) Both China and India could replace Russia as arms suppliers to Southeast Asia. Although India's entry into the market is more recent, the emergence of the Indo-Pacific as a geopolitical frame of reference could help propel its importance, especially as a more benign counterbalance to China.At the heart of the defence planning dilemma facing Southeast Asian countries is an arms diversification puzzle: modernization seeks to strengthen strategic sovereignty through the acquisition of new armaments, yet it also risks creating dependencies on foreign technology, spare parts and support services throughout the life cycle of the armaments, which can last more than three decades. Small defence economies typically manoeuvre between suppliers, as part of a diversification policy, to mitigate these risks.This article offers two arguments regarding arms diversification in Southeast Asia. First, arms diversification is nothing new in the region. It has been practised for decades, not always by design, but often driven by arms embargoes and export control restrictions imposed by traditional arms suppliers. Other circumstances that motivate arms diversification include the acceptance of military aid and a penchant for second-hand weapons from non-traditional suppliers because some regional states only had modest funds at their disposal. However, as Southeast Asian economies have grown so too have their military budgets, while the region has acquired different types of modern weapons at the same time as maintaining ageing inventories. Consequently, most Southeast Asian states have ended up with a potpourri of defence equipment.Second, arms diversification can produce "good" or "bad" results in terms of military effectiveness but there is no one-size-fits-all approach. Most Southeast Asia countries suffer from bad diversification, meaning they compromise the interoperability and effectiveness of their armed forces and suffer from a lack of meaningful technology transfers to support the development of their own defence industrial bases. Too much technology diversification--especially from different "philosophical origins", as in "Eastern" versus "Western" technology--is particularly challenging in the current era of a "Revolution in Military Affairs" (RMA) in which weapon systems are supposed to be interconnected so as to form a network of systems. Weapons that must be deployed on a frequent basis and require round-the-clock support--transport aircraft and helicopters, for instance--also incur expensive life-cycle costs that multiply with diversification. Over-diversification prevents the optimization of the economies of scale, too, forestalling the transformation from a "seller-buyer" relationship to a "collaboration partner". (11)This article investigates whether efforts to diversify arms imports is on a path-dependent trajectory in Southeast Asia. When cost and complexity considerations are removed, such path-dependence weakens the barrier to entry for countries such as China and India to become defence modernization partners. While China and India might seem to be perfect candidates to replace Russia, they have problems with capacity and credibility in arms production.This article is divided into four parts. It begins by providing an overview of arms procurement decision-making and offers a framework that explains how arms diversification is based on four variables: the cost and complexity of the importer, and the capacity and credibility of the supplier. The second part uses data from the International Institute for Strategic Studies (IISS) and the Stockholm International Peace Research Institute (SIPRI) to map out how diversified are the seven selected Southeast Asian countries. The aim is to understand patterns of diversification in weapons type and suppliers, especially whether Southeast Asian countries keep a dependency on certain weapon types from certain suppliers, and to identify complexity, cost, credibility and capability as considerations behind arms diversification. The third part explores the factors for Southeast Asia's collaboration with India and China, assessing their capacity and credibility as arms manufacturers and the two countries' existing defence industrial cooperation with regional states. The fourth section identifies three possible scenarios of arms cooperation between Southeast Asian countries and China and India: the maintenance of existing Russian inventory, the provision of major Russian-designed conventional arms and the provision of indigenously developed and manufactured emerging technology.The Arms Diversification ConundrumArms diversification is a widespread practice among small and medium-sized economies, but the practice lacks a rigorous conceptual framework. Only a few studies have touched upon the issue, and most of these explore perceptions of cost and of the benefits of arms diversification. According to Panitan Wattayanagorn, for instance, arms diversification helped Thailand reduce vulnerabilities in arms supply by decreasing its dependence on a single source. (12) Siddharth Sivaraman and Rajeswari Pillai Rajagopalan have argued that strategic partnerships for the diversification of weapons can serve as a force multiplier for India in times of uncertainty. (13) However, despite its diversification policies towards the West since the 1970s, India has maintained its reliance on Russian weaponry. (14) Meanwhile, Evan Laksmana, lis Gindarsah and Curie Maharani found that Indonesia's policy of arms diversification has not been very successful in terms of interoperability and technology transfers to indigenous defence companies. (15)The decision-making process behind a country's attempts to diversify is complex and often lacks transparency. SIPRI's study on arms procurement decision-making is probably the first attempt to solve the puzzle. (16) It identifies four factors that can shape arms procurement decision-making: military and politico-security; budget and financial; techno-industrial; and organizational and public interest. These drivers either cooperate or compete for influence. SIPRI breaks them down further into 15 different factors, using an interdisciplinary approach. However, due to the detailed nature of the study, SIPRI's approach can only be applied to single country case studies.This article instead attempts to understand the pattern of arms diversification of Southeast Asian countries across time. It utilizes figures from the IISS's Military Balance to create a data set consisting of 169 entries and seven Southeast Asian states, which, in turn, are divided into 41 weapon categories and three domains across seven points in time--2010, 2012, 2014, 2016, 2018, 2020 and 2022. Each entry includes information on the buyer and supplier, the type of arms (sea, land, or air), the category of arms and the number of arms in the inventory in each specified timeline. This approach differs from other studies that solely rely on the SIPRI arms transfer database by recording contracts that may not necessarily have been delivered upon. (17) The advantage of this approach is that it measures the overall arms inventory in service as well as governments' intentions to diversify arms procurement.Arms diversification trends in Southeast Asia are typically collated from media reports. To simplify explanations, a framework known as the 4C framework (complexity, cost, capacity and credibility) has been developed. (18) "Complexity" refers to strategic relations between the buyer and supplier. "Cost" are economic factors such as affordability limitations and...

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