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27 June 19. Indian Budget 2019: New assault rifles to bulletproof jackets, defence sector has high hopes from Nirmala Sitharaman’s Union Budget. Finance Minister Nirmala Sitharaman will take centrestage on July 5, when she will announce the Union Budget 2019-20. Forces have high hopes from Finance Minister Nirmala Sitharaman that she will loosen the purse strings to meet the challenging requirements of modernising the armed forces as she gets down to preparing the first Budget of Modi 2.0. Before becoming Finance Minister, Sitharaman had handled defence and security experts feel that she is well versed with the expectations of the armed forces.
In the Lok Sabha elections, the BJP had centred its election campaign on national security and, with the Union Budget approaching, the defence forces have high hopes that implementation of some of the top-most manifesto promises will see the light of day in the Union Budget. The Union Budget is expected to address the shrinking resources for military modernisation and the consequent need for structural change in the armed forces.
While presenting the interim Budget on February 1, Union Minister Piyush Goyal had allocated Rs. 4,31,011 crore to the Defence Ministry. In his speech, Mr Goyal had said that for the first time the defence budget had crossed Rs. 3 lakh crore. A major chunk of the defence budget goes into manpower management leaving little scope for new purchases as the current capital outlay of little over Rs. 1 one lakh crore goes into servicing existing contracts.
Here are some expectations of the defence sector from the Union Budget 2019-20:
Irrespective of the constraints, the defence ministry has a task at hand to fulfil the requirements for new assault rifles, artillery guns, and bulletproof jackets for the Army to submarines and helicopters for the Navy and fighter jets for the Air Force (IAF).
Some big acquisition projects are lined up like S-400 air defence system from Russia worth 5.4bn dollars.
India is also looking to buy MH-60 Romeo naval multi-role helicopters from the US for 2.6 billion dollars apart from an air defence system and drones.
Even defence sector pundits are expecting that some investment in manufacturing and construction of tanks, armoured combat vehicles, defence planes, space ships, and warships are made.
According to Care Ratings, the budget allocation for steel industry is expected to give significance to domestic production of steel that involves high end value added steel like automotive steel for high end applications, electrical steel (CRGO), special steel and alloys for power equipment, aerospace, defence and nuclear applications, rails for railways among others. (Source: Google/https://www.freepressjournal.in)
25 June 19. South Africa’s state defence firm struggling to pay wages. South Africa’s state-owned defence group is again struggling to pay wages because of liquidity problems, highlighting the gravity of its financial position despite government efforts to turn it around. Denel Chief Executive Danie du Toit told staff in a memo sent on Monday and seen by Reuters that they would only receive 85% of their salaries for June, with the remainder of their wages delayed.
Public Enterprises Minister Pravin Gordhan, who oversees Denel, told parliament on Tuesday that a lender had come to the rescue of the arms firm and that full salaries would be paid.
Denel makes ammunition, missiles and armoured vehicles for the South African armed forces and customers in Africa, the Gulf and Europe.
It made a 1.7bn rand (£93.7m) loss for the 2017/18 financial year after being plagued by years of mismanagement.
Denel has since adopted a new strategy and says it has a healthy order book of contracts, but it has so far failed to secure the significant cash injection it wants from the state.
South Africa’s public finances are stretched by the need to rescue other ailing state firms, like loss-making power company Eskom and South African Airways (SAA).
Eskom and SAA have both received government funds since President Cyril Ramaphosa took office in February 2018, but executives at both companies have lobbied for greater support. Denel struggled to pay salaries to some staff in September last year, but it has since resumed full payment.
It has offered severance packages to staff and is trying to renegotiate onerous contracts and exit parts of its business to cut costs and return to profitability. (Source: Reuters)
24 June 19. India, U.S. nearing industrial security pact for defence tech transfers. India and the United States are closing in on an industrial security agreement that will allow the transfer of defence technology, sources said on Monday, ahead of U.S. Secretary of State Mike Pompeo’s talks in New Delhi this week to promote strategic ties. Disputes over trade and protectionist moves have escalated between the two countries in recent months, but defence ties remain strong with Washington seeking to build Indian capabilities as a counterweight to China.
India has bought weapons worth more than $15bn from the United States over the past decade as it seeks to replace its Russian-origin military and is in talks for helicopters, armed drones and a bigger Indian plan for local production of combat planes together worth billions of dollars.
To allow for transfer of technology for building combat jets locally and other joint ventures, the United States had sought guarantees for the protection of classified information and technology.
A draft of the agreement called Industrial Security Annex is now ready and will go up before the Indian cabinet for approval in the next few weeks, sources aware of the India-US defence negotiations said.
It would be the first time New Delhi has entered into such a pact with any country, although the United States has such agreements in place with several countries, one of the sources said.
Lockheed Martin and Boeing are both in the race for a deal estimated at over $15bn to supply the Indian air force with 114 fighter planes to replace its ageing fleet of MiG 21 jets.
The planes have to be built in the country as part of Prime Minister Narendra Modi’s Make-in-India drive to cut expensive imports and build a domestic industry. Pompeo will arrive in New Delhi on Tuesday and will hold talks with Modi and his Indian counterpart Subrahmanyan Jaishankar the following day. After years of hesitation, India signed an agreement in 2016 to allow both countries to access each other’s military bases and a second one last year on secure military communications. A third accord on sharing geospatial information is still in the early stages, the source said. These are all foundational agreements designed for closer military cooperation, the source said. (Source: Reuters)
24 June 19. Digging in: China redoubles push in the South China Sea. Recent satellite imagery has revealed renewed Chinese assertiveness in the South China Sea with the deployment of fighter aircraft to Woody Island. The deployment comes amid growing tensions in the Middle East drawing the attention of the US, raising the question – how does Australia respond? China’s pursuit of regional primacy has prompted the nation to pursue the development of an integrated system of natural and man-made island fortresses. Dominating and controlling foreign access to the South China Sea through which approximately US$5trn worth of maritime trade passes annually serves as a potent anti-access/area denial (A2/AD) system as a buffer for expanding China’s designs for south-east Asia.
The growing deployment and respective capabilities of China’s armed forces, particularly the force projection capabilities of the People’s Liberation Army Navy (PLAN), and the People’s Liberation Army Air Force (PLAAF) in particular have prompted increased concern from established regional powers, including Japan, Korea and Australia.
Additionally, smaller regional nations with competing territorial claims and ancient fears of Chinese expansion, namely Vietnam, the Philippines and Indonesia, have all raised growing concerns about China’s militarisation and reclamation programs in the South China Sea.
In response, the US announced its ‘pivot’ towards the Indo-Pacific under the former Obama administration in 2013 moving to reassure regional US allies like Australia, Japan and emerging allies like Indonesia, the Philippines and Vietnam that the pre-eminent global power was committed to the enduring freedom and stability of the region.
Despite these early reassurances and renewed investment in the strategic capabilities of the US military under the Trump administration – the global responsibilities of the US, particularly in the Middle East, and the potential for conflict with Iran has once again draw the attention of the US providing an opportunity for China to enhance its military presence in the South China Sea.
Malcolm Davis, senior analyst at ASPI, set the scene, telling Defence Connect, “If war does break out between the United States and Iran I would expect to see nations like Russia and China move to exploit a distracted US – with China’s moves likely to be made in the South China Sea.”
Taking advantage of a distracted US
China has actively sought to counter traditional American and allied capabilities in both the South China Sea and the broader Indo-Pacific. This has included developing traditional power projection capabilities like aircraft carrier strike groups, increasingly capable fleets of nuclear and conventional powered attack and ballistic missile submarines, upgraded strategic bomber forces, highly capable fighter aircraft, and advanced ballistic and cruise missile systems.
Each of these platforms serves as an integral component within China’s rapidly developing ‘system of systems’ and broader joint power projection and A2/AD networks – this balance of traditional force structures, supported by asymmetric platforms, has served as a potent deterrent in the region.
“China’s forward deployment of the J-10s to Woody Island will enable China to more broadly extend their control of the airspace over the South China Sea. Woody Island enables an expanded air control capacity over aircraft based at Hainan Island and could potential preclude a Chinese push toward the Spratly Islands, challenging Vietnam’s interests,” Dr Davis explained.
The forward deployment of these aircraft, broadly comparable to the latest block of Lockheed Martin F-16s and the Royal Australian Air Force Classic F/A-18 Hornet fighter aircraft, comes in line with Chinese developments at both the Spratly Islands and Fiery Cross Reef, which has seen the construction of immense military facilities that accommodate nuclear-bomber capable airfields, deep water ports for Chinese naval vessels, intelligence, surveillance and reconnaissance facilities and batteries of advanced anti-ship cruise missiles (ASCM) and advanced integrated air and missile defence systems.
Australia has moved to support enduring US-led freedom of navigation patrols throughout the region as part of Operation GATEWAY, which is Australia’s commitment to preserving regional security and stability in south-east Asia – with a specific focus on both the north Indian Ocean and South China Sea. It is important to recognise that should the US be distracted by conflict in Iran, Australia could be required to play a bigger role in the region.
“I don’t think at this point in time the Australian government would push for a new Australian freedom of navigation operation in the event of war with Iran – this would not only see a distracted US, it would also see the US expecting a contribution from Australia which would serve to stretch Australia’s significantly smaller military capabilities,” Dr Davis explained.
“At this point in time it is a case of ‘watch this space’. We are far from seeing the end of the situation with Iran – which will only get more complicated as the nation edges ever closer to withdrawing from the Joint Comprehensive Plan of Action (JPCA) and developing its own nuclear capability. As I stated, I would expect to see nations like China and Russia push to exploit strategic distractions in the Middle East.”
Indo-Pacific Asia is at the epicentre of the global maritime trade, with about US$5trn worth of trade flowing through the South China Sea and the strategic waterways and choke points of south-east Asia annually. Meanwhile, the Indian Ocean and its critical global sea-lines-of-communication, are responsible for more than 80 per cent of the world’s seaborne trade in critical energy supplies, namely oil and natural gas, which serve as the lifeblood of any advanced economy.
Australia is not immune to these geo-political and strategic factors and, as an island nation heavily dependent on sea transport – with 99 per cent of the nation’s exports, a substantial amount of its strategic imports, namely liquid fuel, and a substantial proportion of the nation’s domestic freight depending on the ocean – it is a necessity to understand and adapt and introduce a focus on maritime power projection and sea control. (Source: Defence Connect)
28 June 19. Establishing a second ‘Fortress of the Pacific’ – Developing Darwin. Darwin has long served as one of Australia’s key staging points for launching operations into south-east Asia and the broader Indo-Pacific. As China has expanded its ballistic missile and long-range strike capabilities, America’s traditional ‘Fortress of the Pacific’ – Guam – is now exposed, paving the way for Darwin to emerge as a strategic ‘hub’ comparable to a civilian variant Hong Kong.
Since former US president Barrack Obama announced a reinvigorated US presence in the Indo-Pacific as part of the ‘Pacific Pivot’ in 2013, Darwin has emerged as one of the key focal points for US strategic planners and the Australian Defence Force as the nation responds to an increasingly assertive China and rapidly evolving economic, political and strategic environment.
Located in close proximity to the strategic sea-lines-of-communication (SLOC) of Malacca, Sunda and Lombok, Darwin is also Australia’s gateway to the Indo-Pacific, serving as a launching point for Australia’s economic and strategic engagement with the region. While the broader economic potential of Darwin is heavily underutilised, the strategic potential of the city is equally underutilised, particularly given the rise of Indo-Pacific Asia and China in particular.
Currently, Darwin and its immediate surrounds host a range of Australian Defence Force infrastructure, across the services, including:
- Larrakeyah and Robertson Barracks;
- RAAF Bases Darwin and Tindal; and
- HMAS Coonawarra.
Building on this, both Darwin and the Northern Territory have become increasingly important in the long-range strategic planning of both Australian and American strategic thinkers. An annual rotation of US Marines, known as the Marine Rotational Force-Darwin (MRF-D), forming the basis of the Obama administration’s ‘Pacific Pivot’ and commitment to enhancing regional capacity – with a specific focus on building Australia’s amphibious warfare capabilities.
Additionally, both Darwin and the Northern Territory frequently play host to multinational capability building exercises such as Exercise Diamond Storm, Exercise Southern Jackaroo, Exercise Hamel and Exercise Lightning Focus – reinforcing the strategic importance of the state and city in long-term strategic planning, so much so that rumours have recently been circulating about the potential of Darwin and the Northern Territory will play host to a larger US Marine Corps presence.
Despite this, the Australian Department of Defence moved swiftly to counter the rumblings, declaring, “The Department of Defence has not engaged in any classified or unclassified planning with respect to developing, funding or supporting an alternative military, commercial or mixed-use port at Glyde Point or elsewhere in the vicinity of Darwin.”
However, the growing responsibilities and role of both the US and Australia will require a major overhaul of Darwin and its capacity to serve as a major staging point for tactical and strategic multi-domain force multipliers.
Infrastructure upgrades and consolidations
As greater US forces continue to rotate into the Indo-Pacific. US military assets, particularly large force structures like carrier and expeditionary strike groups, deployed bomber forces and forward deployed expeditionary land forces will require greater access to reliable and secure basing, maintenance and sustainment infrastructure and facilities – providing a range of local economic benefits.
The dispersed nature of the Northern Territory defence infrastructure, combined with the large-scale basing requirements of forward-deployed US military assets, provides an opportunity to hit reset on key defence infrastructure – particularly accommodations, ship mooring and basic, and in some cases in-depth, maintenance and sustainment and airfield requirements – to develop a series of joint military facilities capable of supporting long-range, sustained combat operations throughout the Indo-Pacific.
An example of this could include the major redevelopment of naval facilities in Darwin to accommodate both Australian and American expeditionary strike groups, with specialised moorings to accommodate a US Navy Nimitz or Gerald R. Ford Class supercarrier and supporting naval task group – providing an alternative basing arrangement to the comparatively vulnerable facilities existing in Japan and Guam.
The unique requirements of these facilities also provide opportunities for the long-term development of a domestic Australian nuclear energy industry with the potential for introducing nuclear-powered submarines. Building on this, the increasing role of the US Marines and their amphibious expeditionary strike groups and corresponding multi-domain combat elements will require increased accommodation and basing facilities beyond the existing Larrakeyah and Robertson Barracks facilities.
Meanwhile, the continuing importance of air power and the increasing rotation of air combat platforms would also require extensive upgrades and modernisation for RAAF Base Tindal, which would assume all the air combat basing and operational responsibilities of RAAF Darwin – consolidating defence capability and providing avenues for developing defence industry ‘centres of excellence’ providing additional long-term economic benefits.
For Australia, the Cold War-era ANZUS treaty and the guarantee of US strategic and tactical security is the core of Australia’s position in the rapidly evolving Indo-Pacific region – enabling a greater deal of Australian tactical and strategic autonomy in the face of rapidly developing high-intensity regional capabilities. However, this relationship is not solely a one-sided affair, as the position of Australia provides the US with an invaluable linchpin straddling the Indian and Pacific Oceans.
Dr Malcolm Davis, senior analyst at the Australian Strategic Policy Institute, reinforced the importance of the strategic partnership between Australia and the US, telling Defence Connect, “The US-Australia strategic alliance, under ANZUS, is the most critical component of Australia’s approach to defence policy. In a period of growing strategic risk and uncertainty, particularly given the rise of China, the alliance forms the essential foundation of Australia’s defence but also is an important relationship for Washington.”
Australia’s security and prosperity are directly influenced by the stability and prosperity of the Indo-Pacific, meaning Australia must be directly engaged as both a benefactor and leader in all matters related to strategic, economic and political security, serving as either a replacement or complementary force to the role played by the US – should the US commitment or capacity be limited. (Source: Defence Connect)
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