Chinese-US defence spending projections
Posted: 19/03/2013 Filed under: Asia Pacific, Defence, Giri Rajendran, Military Balance, US | Tags: China, convergence, defence economics, defence spending, sequestration, United States 3 Comments »
By Giri Rajendran, Research Associate for Defence and Economics
In preparing the latest edition of the Military Balance, launched last week in London and this week in the United States, the IISS team behind the book decided to try an experiment. Since the United States and China are the world’s biggest spenders on defence, and China a distant second, we wanted to see when both countries’ defence spending might converge.
We based our projections on several hypothetical scenarios, including one in which the trend rates of defence-spending growth over the past decade in the US and China were to continue, and another in which Chinese defence-spending growth was constrained by an economic slowdown. (Looking at past examples, particularly the 1980s Latin American debt crisis, we assumed that China’s economy would start booming again by 2031.) The US budget sequester was another variable we had to factor in.
Debating regional missile defence
Posted: 08/12/2012 Filed under: Defence, Gulf and Middle East Security, James Hackett, Manama Voices | Tags: defence cooperation, defence economics, GCC, missile defence, Patriot anti-missile batteries, Qatar, THAAD, UAE, US 1 Comment »
A Standard Missile – 3 (SM-3) is launched from the USS Hopper (DDG 70) (Photo: US Missile Defense Agency)
By James Hackett, Editor of the Military Balance
Much press attention at this year’s Manama Dialogue will focus inevitably on the conflict in Syria and other consequences of the Arab Spring. But a set of other core issues also remain, including the threat perceptions of regional states, and Iran’s place in these calculations. Regional states, and international partners such as the US, remain concerned by Iran’s continuing drive to improve its ballistic missile capabilities, amidst international preoccupation with Tehran’s nuclear programme. Given these uncertainties, the development of regional military capabilities will likely figure high in delegates’ conversations Read the rest of this entry »
A defence dream born out of necessity
Posted: 14/09/2012 Filed under: Alex Nicoll, Defence | Tags: aerospace, BAE Systems, defence economics, EADS Leave a comment »
Alexander Nicoll, Director of Editorial, wrote an opinion piece in the Financial Times on the possible merger of aerospace companies EADS and BAE Systems.
EADS and BAE Systems are currently in talks to join forces – a deal Nicoll says is driven by a decline in western defence spending. In Europe, future production runs for aircraft are likely to be small. EADS and BAE both have business interests in other defence areas, but they can get a better ‘global market clout’ by making a combined attack on remaining budgets. The US market will remain an important source of business, and the Asia and Middle East will also be key markets in which the merger will help. But as Nicoll points out, there will be challenges for the resulting body – both from declining defence budgets (including potential additional cuts to the US armed forces), and from the merger itself, which will need to meld two different corporate cultures. ‘EADS is itself a case study in how difficult and time-consuming such a process can be,’ says Nicoll.
Read the full article here.
Grim watch at Farnborough: How far will defence spending fall
Posted: 09/07/2012 Filed under: Defence, Douglas Barrie, Europe, US | Tags: Defence, Defence budgets, defence economics, NATO, US pivot to Asia Leave a comment »
By Douglas Barrie, Senior Fellow for Senior Fellow for Military Aerospace
The ebb and flood of transatlantic defense relations has long been in evidence at the Farnborough air show, at the political and industrial level both. A question on the minds of many of the more than 100,000 daily attendees will be just how low the spending tide could eventually drop, as Washington’s interest is now focused firmly on another ocean while Europe flounders in debt.
The 2012 show is the aerospace and defence industry’s first full opportunity to come together since the U.S. administration’s revised strategic guidance outlined ‘re-balancing’ toward the Asia Pacific, while sustaining its commitment in the Middle East. Europe, for more than half a century the preoccupation of US defence interest, also became the subject of a “strategic opportunity to re-balance.” In keeping with the general tenor of the defence debate in Europe this is certain to be in terms of a withdrawal. Read the rest of this entry »
Buying into Smart Defence
Posted: 22/05/2012 Filed under: Bastian Giegerich, Defence, Europe, US | Tags: Chicago summit, defence economics, NATO, smart defence Leave a comment »
IISS’s Alexander Nicoll says a weak point at the recent NATO summit in Chicago was the failure so far to involve the defence industry more closely in the Smart Defence project. This is a topic that also interests Bastian Giegerich, IISS Consulting Senior Fellow for European Security. ‘Smart Defence will not blow over and go away as earlier capability initiatives have,’ Giegerich says in an article co-authored by Henrik Breitenbauch, from the University of Copenhagen’s Centre for Military Studies. Rather, this is ‘the beginning of a new way of thinking about how NATO does defence, including procurement’.
So instead of being influenced by past attempts into thinking of international cooperation in terms of delays and market-distorting principles, industry should seize the opportunity to ‘sell products that would not otherwise be sold’.
‘While earlier doctrinal revolutions have been about creating joint and combined forces, smart defence adds a third essential leg: internationalisation,’ the authors write. … ‘Each new capability development project will from the outset be designed with at least one allied nation.’ Indeed, Giegerich and Breitenbauch suggest, some new spending will probably only get green-lit if it is international.
It is easy to criticise Smart Defence, Giegerich admits in another article in the latest issue of Survival. ‘Some will say it is a fancy new term for old ideas. Others might argue that it will not work, for a whole host of reasons, or suggest that projects long under way or lacking ambition have been repackaged to create the illusion of progress.’ Yet, while acknowledging the validity of these criticisms, he insists that the challenge remains to make better use of scarce resources in an era of uncertainty. ‘This, after all, is the core business of strategy,’ Giegerich says.
Read more in Survival: NATO’s Smart Defence: Who’s Buying?
Charting the shift in defence spending
Posted: 08/03/2012 Filed under: Defence, Military Balance | Tags: Asia, chart, China, Defence, defence economics, Europe, US Leave a comment »Much of the press coverage of yesterday’s launch of the Military Balance 2012 has focused on the continuing shift in relative military strength away from the West and towards Asia. Many reporters have understandably honed in on the fact that Asian defence spending is set to overtake Europe’s this year, for the first time in modern history. Here are some of last year’s raw figures.
A signal of ongoing cooperation
Posted: 07/03/2012 Filed under: Defence, Douglas Barrie | Tags: Defence, defence economics, Rivet Joint, SIGINT, UK, US Leave a comment »
By Douglas Barrie Senior Fellow for Military Aerospace
Intelligence and nuclear collaboration are two pillars of the long-term defence relationship between London and Washington. Recent cuts in the UK military have raised questions about whether London can uphold up its end of the bargain. But US budget documents released last month show that the US and UK continue to collaborate in the particularly sensitive area of electronic signals intelligence, or SIGINT.
Rafale’s gain is Typhoon’s loss in India
Posted: 15/02/2012 Filed under: Defence, Douglas Barrie | Tags: Dassault, David Cameron, Defence, defence economics, Eurofighter Typhoon, France, India, Rafale aircraft, UK Leave a comment »
By Douglas Barrie, Senior Fellow for Military Aerospace
The omens were not good when Britain’s Minister for International Security Strategy, Gerald Howarth, led a defence trade delegation to India last week. Days before Delhi had chosen to buy the French Rafale fighter aircraft, instead of the Eurofighter Typhoon in which the UK is a partner.
The decision came five years after India began its quest for an extra strategic alliance to complement Russia in the combat-aircraft arena (releasing a request for proposals for a new fighter). The Rafale (pictured) was selected to meet the India air force’s Medium Multi-Role Combat Aircraft programme for 126 fighter aircraft to replace its ageing MiG-21s. Delhi’s choice is reportedly based on the Rafale being less expensive; the overall cost of the acquisition may be around US$14 billion.
If completed, this will be a significant deal for Dassault as the first export sale for the Rafale – which for one reason or another has previously been left at the altar. For example, just when Dassault seemed on the brink of securing the United Arab Emirates as a customer in late 2011, Crown Prince Sheik Mohamed bin Zayed, in an uncharacteristic outburst, criticised the company for its ‘uncompetitive and unworkable commercial terms’. Dassault has also come tantalisingly close to a Rafale sale in Brazil, but none has yet been secured.
Behind the latest Pentagon cutbacks
Posted: 27/01/2012 Filed under: Defence, Douglas Barrie, Henry Boyd, James Hackett | Tags: Barack Obama, Defence, defence economics, Pentagon cuts Leave a comment »
By Douglas Barrie, Senior Fellow for Military Aerospace, Henry Boyd, DMAP Research Analyst, and James Hackett, Editor, The Military Balance
Yesterday, the Pentagon made its latest announcement on the US defence budget, outlining proposed force cuts and procurement shifts, and setting the ground for the release of the FY2013 budget request in mid-February. This budget will carry the real detail, and will start the real battles in Congress. US President Barack Obama is trying to save $259 billion over the next five years, as part of a broader plan to cut $487bn over a decade of as part of deficit-reduction efforts. But in this election year, Obama faces the task of carefully cutting the armed forces without providing easy ammunition to the Republican opposition.
Elements of the changes had previously been trailed, most notably when Obama announced new strategic guidance earlier in January, with a shift of focus towards the Asia-Pacific region. The administration plans to reduce defence spending by cutting the size of its armed forces, while maintaining the qualitative edge to prevail in any major conflict in Asia-Pacific. Structuring and sizing the military to conduct ‘two wars’ simultaneously is also being revisited. The aim is now that if ‘engaged in a major combat operation in one theatre, we will have the force necessary to confront an additional aggressor by denying its objectives or imposing unacceptable costs’.
NATO responds to shrinking budgets
Posted: 19/01/2012 Filed under: Defence, Douglas Barrie | Tags: austerity, Defence, defence economics, NATO 1 Comment »
By Douglas Barrie, Senior Fellow for Military Aerospace, IISS
NATO defence ministers will use their 2-3 February meeting in Brussels as an opportunity to take stock of the Alliance’s ‘smart defence’ initiative, with the initial results of their work to be unveiled at the NATO Chicago Summit in May. Conceived as a response to both US criticisms of its European partners and the current squeeze on defence budgets, the initiative is intended to sustain NATO’s capabilities by means of greater multinational collaboration while allowing for more efficient defence spending.
Addressing the IISS in London on 19 January, Ludwig Decamps, Director of Strategy, Head of the Smart Defence Support Team, NATO, explained that the aim is to present ‘an ambitious but realistic package’ in Chicago. He identified ‘prioritisation, cooperation and specialisation’ as central components of the initiative now being pursued by the Alliance as it tries to maintain defence capabilities and sustain its relevance.
A task force has, said Decamps, identified 200 areas which would be suitable for either bilateral or multilateral programmes under the initiative. These include surveillance, unmanned aerial systems, and counter improvised explosive device development. This work is being refined with potential projects being grouped into ‘clusters’ including intelligence, surveillance and reconnaissance, training, and sustainment.
Decamps said the Alliance had to ‘change the way [it does] business’, and, even more importantly, mindsets had to shift. ‘Multilateral cooperation should become the mainstream’ as the Alliance tries to sustain its capability, he contended. He recognised that multilateral procurement projects had a mixed record, and that this would need to be improved.
A further challenge lay in attempting to resolve concerns over national sovereignty and specialisation. He argued, however, that ‘specialisation is happening, whether we like it or not’, and pointed to numerous European member states that were already ‘salami slicing’ their capacity and readiness. ‘Specialisation by design’, said Decamps, would allow the Alliance to keep a coherent capability across the war-fighting spectrum.
