GLOBAL DEFENSE MARKET

Rising Tensions Fuel Indo-Pacific Arms Sales

4/11/2022
By Meredith Roaten
A U.S. Marine Corps F-35B Lightning II conducts an aerial demonstration during the Singapore Airshow.

Defense Dept. photo

SINGAPORE — With tensions rising in the Indo-Pacific and China increasingly intimidating its neighbors, nations in the region are seeking capabilities that will set them up for success in potential future conflicts.

Although efforts to recover from the COVID-19 pandemic have slowed arms deals, the relatively low turnout at the Singapore Airshow in February didn’t stop attendees from laying the groundwork for enhanced military readiness.

“This is really the target market in the world right now,” said Daniel Darling, senior analyst for Australia and Pacific countries at market research firm Forecast International.

The region is a hotbed for gray zone warfare — military operations below the threshold of full-scale conventional warfare, Darling said.

“In particular, around Singapore, you have the South China Sea and the transshipment channels that bring a lot of pressure to resource-dependent nations,” he said.

In the Defense Department’s annual Chinese Military Power report, which was released in November, Beijing’s anti-access and area denial capabilities are strongest within the First Island Chain — which includes the area near Japan, Taiwan and the Philippines — but its leaders have ambitions to extend its reach even farther.

The People’s Republic of China “is beginning to field significant capabilities capable of conducting operations out to the Second Island Chain and seeks to strengthen its capabilities to reach farther into the Pacific Ocean and throughout the globe,” according to the report. The Second Island Chain encompasses the islands of Guam and Micronesia.

While the COVID-19 pandemic hurt defense budgets across the region, nations feel pressure to build up at least a minimal deterrent force against Chinese aggression despite the high costs, Darling said.

The pandemic “definitely inhibited … defense procurement spending growth but nonetheless, one thing to keep in mind is every country in some way is hedging around China,” he said.

If countries in the region are going to be ready to ramp up military operations to counter China, aligning their capabilities with the United States could be useful, industry executives at the Singapore Airshow said.

The stealthy fifth-generation F-35 joint strike fighter is a good example, according to Lockheed Martin. Operating the fighter jet opens up opportunities for new partnerships and alliances between international customers and the United States, said Steven Over, director of F-35 business development in the region.

“We don’t want to speak for the U.S. government, but I will tell you that the customers that we are offering the F-35 [to] view this as a coalition capability that is interoperable throughout the region,” he said.

By 2035, there will be more than 300 F-35s operating in the region, the vast majority of which will be owned by foreign partner nations, Over said.

“It’s really about providing a coalition capability to deter aggression,” he said.

Singapore has four F-35 jets, while closer U.S. allies such as South Korea, Australia and Japan have ordered more than 200 platforms combined, according to Lockheed.

Furthermore, strengthened relationships with allies and partners, is a crucial part of the joint all-domain command and control initiative that is a focus of the U.S. military. The concept encourages the development of technology that connects sensors to shooters to enable information overmatch in a contested environment. If allies have the same aircraft, it facilitates JADC2 capability, said Tim Cahill, senior vice president of global business development and strategy for Lockheed. However, additional work needs to be done to standardize requirements for technologies so it will be easier for nations’ legacy systems to work together.

“One of the things that we are doing as a company right now is actually investing at a broad level on what are the set of future standards, particularly for data,” he said.

Building software early on around platform data management will prevent costly add-ons down the road, he noted.

“The things that are really, really going to be expensive and important, it’s going to be that software that goes into each of those nodes, for example, and the platforms that you’re fielding that have got the basic sensor capability,” he said.

It should be relatively easy to convince allies to make upfront investments, said John Clark, vice president of international business development in the company’s missiles and fire control business division.

“The customers are still putting a high priority on being interoperable with U.S. military,” he said. “That’s helping us with making sure that systems talk to each other.”

However, military partnerships with the United States are not assured in every nation. For example, Singapore trains regularly with U.S. forces and permanently bases squadrons of its aircraft in the United States. But the country also has defense agreements with China. Singapore and Beijing signed a renewed defense agreement in 2019, which established a regular dialogue between defense leadership in addition to partnerships in logistics support.

One of the biggest deals of the Singapore Airshow happened before the doors opened. Indonesia confirmed an order for a fleet of 42 French-made Dassault Rafale fighter jets worth an estimated $8 billion.

Following the announcement, the U.S. Defense Security Cooperation Agency announced a possible foreign military sale with Indonesia for 36 F-15ID aircraft with a price tag of $13.9 billion.

Indonesia is a “force for political stability and economic progress” in the Asia-Pacific, according to a February statement from DSCA. “It is vital to U.S. national interests to assist Indonesia in developing and maintaining a strong and effective self-defense capability.”

Countries in the region are also looking for enhanced reconnaissance aircraft. Maritime patrol platforms are force multipliers because of their ability to cover large swaths of the Pacific Ocean and monitor sea approaches, Darling said.

At the airshow, Israel Aerospace Industries displayed a model of its patrol aerial vehicle, the ELI-3360, while a U.S. Navy P-8 submarine killer — built by Boeing — sat on the tarmac in a static display.

Meanwhile, the display of Israeli weapons systems at the airshow could signal trends in arms deals for Singapore — though the island nation is more focused on maritime capabilities than Israel, Darling added.

“Singapore tends to model their procurement processes on Israel, and they tend to watch what happens in Israel, because Israel is almost [always] in some form of conflict or high readiness level of military activity,” he said.

Elbit Systems unveiled a new variant of its Skylark 3 Hybrid small tactical unmanned aerial vehicle during the airshow. The drone can operate for up to 18 hours, using the combustion engine for speed and the electric engine for operating above its area of interest, according to the company.

While most sales at airshows are determined before the event, tensions between Ukraine and Russia leading up to the confab could have led to more customer meetings, Darling said. Before the gathering, Russia had not yet invaded its neighbor, but as of press time, the United States is levying major economic sanctions against Moscow.

“You’ll have more and more prospective buyers more interested in certain assets,” Darling said. Some customers are “now increasingly looking at an array of military equipment … and now they’re more interested than ever in looking at higher-end capabilities.”

Already South Korea, Australia and India are Indo-Pacific nations that are among the top 10 arms importers in the world, according to the Stockholm International Peace Research Institute’s 2020 report titled, “Trends in International Arms Transfers.”

Meanwhile, the show highlighted the strengthening of U.S. alliances in the region, including nations participating in the Quadrilateral Security Dialogue, which is a defense cooperative agreement between the United States, India, Australia and Japan. It’s a relationship that Boeing’s defense business is monitoring closely, said Leanne Caret, president and CEO of Boeing Defense, Space and Security.

The company’s representatives in each of the countries stay abreast of the local priorities as they relate to Quad activity, she noted. “It’s up to us as an industry to listen and make certain that we’re offering products and services that meet with those customers’ needs,” she said.

For example, Caret pointed to the Indian navy and air force’s search for multirole fighters. Boeing is planning to offer multiple platforms as potential options.

Meanwhile, countries in the Indo-Pacific are increasingly considering and investing in the sustainability of their aircraft, according to Caret.

Traditional government programs for weapon systems are taking too long, potentially jeopardizing the quality of the aircraft and future sustainment, she noted.

“If we can turn the conversation on how fast we get capability, … [customers will be able to better interact and operate] with allies, partner nations, and really deliver the assured force and capability that they want,” she said.

Boeing is working with an engineering company to improve efficiency in Singapore, said Ted Colbert, CEO of Boeing Global Services.

“We’re working right now on bringing together our data, their data, and building better preventive and predictive analytics and making space to support their customers,” he said.

Meanwhile, Singapore and other Indo-Pacific countries are recovering from the effects of the COVID-19 pandemic and building back their own aerospace production capabilities. Before the show, Rolls-Royce and GE Aviation announced they would hire more workers in Singapore to enhance aircraft production in the region.

Other Pacific nations such as Australia and Indonesia are attempting to build up their own indigenous defense manufacturing and production capabilities.

Much of the defense industrial base in the Asia-Pacific is limited in scope and comparable to the Turkish industrial base 15 or 20 years ago, Darling said.

Topics: Global Defense Market

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