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05 Jun 20. China could lose 95% of ballistic, cruise missiles under strategic arms control pact, says new analysis. China could stand to lose almost all of its ballistic and cruise missiles if it were to sign a new strategic arms control treaty, according to a new regional security assessment.
The analysis, titled “The End of the Intermediate Range Nuclear Forces Treaty: Implications for Asia,” is one of the chapters of the annual Asia-Pacific regional security assessment published by the International Institute for Strategic Studies think tank. IISS’ report was released June 5 and covered regional security topics such as Sino-U.S. relations, North Korea and Japanese policy.
China could lose 95 percent of its ballistic and cruise missile stockpile if it signs a treaty similar to the 1980s Intermediate-Range Nuclear Forces Treaty, according to the chapter’s co-authors Douglas Barrie, a senior fellow focused on military air power; Michael Elleman, the director of the Non-Proliferation and Nuclear Policy Program; and Meia Nouwens, a research fellow focused on Chinese defense policy and military modernization.
The treaty, signed between by the United States and the Soviet Union in 1987, banned all ground-launched ballistic and cruise missiles systems with ranges between 310 and 3,420 miles (500-5,500 kilometres). The U.S. withdrew from the INF Treaty in August 2019, citing Russian violations of the agreement with its development and fielding of the 9M279 missile, although Russia denies that the missile violated range restrictions.
However, the IISS report suggested the U.S. withdrawal was done with an eye toward China’s missile arsenal, which has grown to what is believed to be the world’s largest inventory of short- and medium-range ballistic missiles. IISS’ own figures estimate China possesses more than 2,200 missiles that fall under the INF Treaty’s restrictions.
These short- and medium-range missiles are important assets in exerting pressure on Taiwan, which China sees as a rogue province and has vowed to reunite with the mainland, by force if necessary, although it continues to describe its fielding of ground-launched ballistic and cruise missiles as solely for defensive purposes.
Given these missiles provide China with what Barrie described as a “comparative advantage” in the region, it’s unlikely the country would willingly sign a potential arms control treaty like the INF Treaty.
The U.S, for its part, has already started testing missiles previously prohibited by the treaty, and there have been suggestions that the country might deploy such missiles to the Asia-Pacific region to address an imbalance in such weapons between itself and its rivals without solely relying on air- and sea-launched cruise missiles. (Those cruise missiles existed under the INF Treaty, as they did not violate the pact.)
The report cautioned there is a two-fold risk in deploying such weapons to the Asia-Pacific. Chief among those: exacerbating Chinese concerns that the missiles will be positioned for use against it, increasing the potential for a response from China that could lead to an “action-reaction cycle of weapons development and deployment” and continued regional instability.
The U.S. is also faced with the quandary of basing any potential INF-busting systems, with regional allies and partners unlikely to accede to locating such missiles on their territory, partly because of the diplomatic and economic reprisals Beijing could inflict on them. And there’s precedent here: China targeted South Korea’s economy in response to and expressed its distaste at the deployment of a U.S. missile defense system on South Korean soil in 2017.
As for the U.S. territory of Guam, basing missiles there would limit their utility due to the distances involved.
The IISS report also raised questions about whether U.S. moves to develop and deploy weapons previously prohibited by the INF Treaty will bring China to the arms control negotiating table. However, the think tank conceded that not deploying such weapons is also unlikely to persuade China, noting that that Beijing has shown little appetite for participating in any form of strategic and regional arms control. (Source: Defense News)
05 Jun 20. US Army to define multi-domain ops with Indo-Pacific partners, including Australia. The US Army, in collaboration with Indo-Pacific partners like Australia, is looking to expand the use of its Multi-Domain Task Force across the Indo-Pacific region this year to test future warfighting capabilities and make it more rapidly deployable.
As part of a US Army Pacific-led pilot, the task force is being built to be mobile with a capable headquarters and robust communications that can quickly link it in with joint assets and partners in the region, said Lieutenant General Randy George, commander of I Corps.
LTGEN George explained during the virtual Indo-Pacific Landpower Conference 2020, “We want to build something that can take advantage of what we have for strategic movement, whether it’s by airlift or by sea to manoeuvre it.”
In the future, he added, a task force could be based at a forward location in the region, where, according to the National Defense Strategy, China, North Korea and non-state actors still pose a threat.
“Key terrain will always be a critical aspect and we must combine efforts to protect sovereignty, international law and the rules-based order,” LTGEN George added.
The task force includes elements from a fires brigade and an I2CEWS detachment, which is testing intelligence, information operations, cyber, electronic warfare and space assets to counter enemy anti-access/area-denial capabilities.
Last year, the task force exercised with similar multi-domain units from Japan and Australia, as it prepares to become a permanent task force at Washington’s Joint Base Lewis-McChord this fall.
The Army plans to establish a second stand-alone MDTF in Europe next year, and a third task force will stand up in the Pacific in 2022, I Corps leaders have previously said.
Leaders envision the specialised units to be about 500 personnel, including troops from other services.
One of the challenges the pilot currently faces is how to quickly work with sensors and shooters from all the services to present multiple dilemmas to an adversary.
LTGEN George added, “We’re often interdependent, but we’re going to have to become integrated to reach our full potential for a sensor-shooter agnostic force.”
With such an all-inclusive unit, the general said he initially expects there to be friction among other assets on how it can deliver its array of capabilities. In those exercises, he said, US and foreign militaries must share their successes and failures in executing multi-domain operations in order to move forward together.
The task force trained last year with the Japan Ground Self-Defense Force, which is developing similar concepts and capabilities called Cross-Domain Operations, during the Orient Shield exercise.
For the first time, Orient Shield was also linked with Cyber Blitz, an annual experiment hosted by Army Cyber Command from New Jersey’s Joint Base McGuire-Dix-Lakehurst that informs Army leaders how to execute full-spectrum information warfare operations.
Japan Ground Self-Defense Force director general of policy and programs Major General Masayoshi Arai added, “These accomplishments in synchronising cross-domain warfighting will contribute to not only strengthening the Japan-US alliance, but also serve as a significant effort toward peace and stability in the Indo-Pacific region.”
This comes on the back of Talisman Saber 2019 exercise, the MDTF was assigned to the Australian Army’s 1st Division, which oversees the country’s Deployable Joint Force Headquarters that includes ground, sea and air forces.
While the deployable headquarters has an information warfare unit that can demonstrate MDO effects, its commander, Major General Jake Ellwood, believes they will eventually create a unit similar to the US Army task force to bolster its efforts.
“If we leave an adversary wondering where our key strengths and vulnerabilities lie. The vast nature of these possibilities will leave them trying to defend everywhere, which, as we know, ends up being absolutely nowhere,” MAJGEN Ellwood said.
He also noted that MDO does not have to be constrained to competition, but it can also help in humanitarian assistance and disaster relief by synchronising community information to ensure support is fully maximised as well as dispel any misinformation.
General Paul LaCamera, Commander of US Army Pacific (USARPAC), said, “Our exercises serve not as provocations, but allow us to deter conflict. The intent is to preserve sovereignty in a free and open Indo-Pacific, not to force Indo-Pacific nations to make difficult economic or diplomatic choices.” (Source: Defence Connect)
04 Jun 20. Speculation of Military [Order] Rises As FC-31 Stealth Fighter Jet Appears in PLA Navy Recruitment Video.
After China’s FC-31 stealth fighter jet appeared in the most recent pilot recruitment video for the People’s Liberation Army (PLA) Navy, speculation increased that the aircraft could become China’s next-generation aircraft carrier-based fighter jet.
The PLA Navy’s pilot recruitment program for 2020 recently started, with students from all around the country gathering for a series of qualification tests in Zhengzhou, Central China’s Henan Province, state broadcaster China Central Television (CCTV) reported on Wednesday.
This year’s tests featured more subjects based on past years’ experience and also made COVID-19 prevention and control a priority.
The CCTV report featured a video which introduced the requirements to apply for the program, in which a cartoon figure of a pilot sitting in a FC-31 fighter jet is displayed.
Chinese military observers speculate that this is yet another official hint that the FC-31 might become China’s next generation aircraft carrier-based fighter jet.
According to the website of the PLA Navy’s pilot recruitment program, pilot cadets will study five years before graduation.
In these five years, the FC-31, which is still under development, could finish the necessary modifications and join the PLA Navy, as China’s third, more advanced aircraft carrier could also be commissioned around that time, observers predict.
Other observers expressed doubt over how much the cartoon figure reflects the PLA Navy’s plan. They say the video is likely made by CCTV and not the Navy, and it could be just a random picture.
Independently developed by the state-owned Aviation Industry Corporation of China (AVIC), the FC-31 is a single-seat, twin-engine multi-role stealth fighter jet available for export, but rumors persist that it would be commissioned into domestic military forces.
Recent photos circulating on Chinese social media show the FC-31 has been making new test flights as one prototype is painted in a new silver-gray coating, reports said.
Fu Qianshao, a Chinese air defense expert, told the Global Times that the development of the FC-31 is seemingly making rapid progress, and that he hopes it will eventually serve in the PLA.
The development of the FC-31 will continue, and modifications will likely be made based on test flights, including the installation of new engines and other devices, Fu said. (Source: defense-aerospace.com/ Global Times)
03 Jun 20. Putin signs nuclear policy reshape as arms control falter. Russian President Vladimir Putin has approved a new nuclear deterrent policy that would allow the country to use nuclear force in response to a conventional attack from a power.
The document, signed by Putin, allows the country to use its nuclear forces in several scenarios including one where attacks from conventional forces that ‘threatens the very existence of the state’.
The policy states that Russia’s nuclear deterrence is a priority, but that the use of the country’s weapons is only possible in response to aggression. Ultimately the decision to use Russia’s nuclear weapons resides with the president.
The new rules, set out in a document approved by Putin, detail four circumstances in which Russia can respond with its nuclear deterrent, including the instance when an attack with conventional forces jeopardises the “very existence of the state”.
Russia can also mount a nuclear response if it receives reliable information its adversaries are launching a ballistic missile attack on the country or one of its allies. The Kremlin policy document reads: “The receipt of reliable information about the launch of ballistic missiles attacking the territory of the Russian Federation and (or) its allies;”
Russia can also respond with nuclear force if it or its allies come under attack from nuclear forces. The document adds that Russia can also attack a country with nuclear weapons if an enemy attack affects the ability of the country to respond with nuclear force. The document reads: “- The enemy’s impact on important state or military facilities of the Russian Federation, the failure of which will lead to the disruption of the response of nuclear forces;”
Despite the change of tact in nuclear policy, Russian news outlet TASS reported that Kremlin Spokesman Dmitry Peskov said that the country would ‘never’ initiate a nuclear attack.
Peskov said: “Now, the entire document has been published, which stipulates what exactly might force Russia to use nuclear weapons. At the same time, it stresses that Russia can never and will never initiate [the use of nuclear weapons].”
The new policy replaces a former doctrine signed ten years ago and marks a departure from previous Russian nuclear rules by being published publicly by the government.
The new policy comes at a time when the future of nuclear arms control is increasingly fraught with the US rescinding from the Intermediate-Range Nuclear Forces (INF) Treaty and signalling its intention to pull out of the Open Skies treaty.
As it stands, just one treaty, New START (Strategic Arms Reduction Treaty), places limits on the nuclear arsenals of the US and Russia. New START is set to expire in 2021. While Russia has signalled it would agree to extend New START, the Trump administration is keen to negotiate a new arms control agreement that would also include China. (Source: army-technology.com)
27 May 20. Open Skies withdrawal looms over arms control future. The US decision to withdraw from the Open Skies treaty has cast a cloud over hopes of renewing the New Start treaty which limits the nuclear capabilities of the US and Russia, and the wider future of arms control agreements.
Last week, the US announced its intention to pull out of the treaty in six months, citing Russian violations as the reason. Analysts from the International Institute for Strategic Studies (IISS) and Royal United Services Institute (RUSI) told Air Force Technology that the decision would cause concern among other signatories and a bleak outlook for the future of arms control agreements.
RUSI UK Nuclear Research Policy Fellow Sam Dudin told Army Technology that the US decision could see other parties become less interested in working towards arms control agreements with the US. As arms treaties often require significant levels of diplomatic involvement, the Trump administration’s decision to unravel another major arms control treaty could make some countries less interested in working on future agreements.
Withdrawing from Open Skies would mark the third major arms control agreement the Trump Administration has backed away from the following the administration’s decision to withdraw from the JCPOA Iran nuclear deal and the Intermediate-Range Nuclear Forces (INF) Treaty.
Dudin, however, said that the future of arms control agreements would also be influenced by the result of the US Presidential Election this year, the result of which could see a return to normalisation within the arms control landscape.
Dudin said: “The ramifications for the wider arms control landscape will to a certain extent depend upon who wins the US Presidential election in November this year. If the Democrats win it might be possible to limit the damage done by the Trump administration to the wider arms control landscape. However, the New Strategic Arms Reduction Treaty (New START) is due to expire on 5 February 2021, 16 days after a new President would take office.
“Arms control treaties usually take years to negotiate – the only options for an incoming President would be to let the treaty expire or extend New START for up to five years without renegotiation. Extending the treaty could buy time to attempt to come to an agreement on various outstanding issues such as the inclusion of China in nuclear arms control talks, US ballistic missile defence and Russia’s novel nuclear weapon systems.”
On the other hand, a Trump victory in November could have the opposite effect and make the arms control landscape ‘bleaker’ according to Dudin. With the US having withdrawn from several agreements, Dudin said other countries would have little incentive to work with the US on future agreements.
Dudin said: “If the Trump administration goes ahead with formally pulling out of the Open Skies Treaty in six months, on top of previously pulling out of the INF Treaty and the JCPOA, this will act as a disincentive for countries to invest time and effort in arms control negotiations with the Trump administration.
“Appetite for any investment is influenced by the perceived chances of success. The Trump administration has not only signalled that they are uninterested in arms control, they have also actively unravelled two different arms control deals and are in the process of unravelling a third. This means that some countries will think twice before making that investment of time and effort.”
Although the US has left the door open to return to the agreement, on the condition that it sees Russia return to compliance, IISS senior fellow for military aerospace Douglass Barrie told Air Force technology that the experience of the INF cast a shadow of the US chances of returning.
Barrie told Air Force Technology: “From a wider arms control perspective this is clearly an unwelcome development, following in the wake of the collapse of the INF Treaty. And while Moscow has on occasion been evasive or obstructive in its behaviour in meeting its Open Skies obligations, this appears less of breach than that of the 9M729 (SSC-8 Screwdriver) cruise missile that caused the INF to unravel.
“Washington has at least notionally left the door open for it to remain in the Open Skies regime if it considers Moscow returns to compliance, but the outcome of the INF demarche does not bode well for a US return. Washington’s planned withdrawal appears to have been met with consternation by some of the other signatories that understandably want the US to remain in Open Skies.”
Dudin said that the decision showed the US pivoting its focus from Europe to the Pacific, a move that could show allies on the old continent concerns may not carry the same weight as they had done in the past.
Dudin said: “This will upset various European members of NATO, many of whom were already upset with President Trump over the US pulling out of the Joint Comprehensive Plan of Action (JCPOA), also known as the Iran nuclear deal. It is another demonstration that as the US continues its pivot to the Pacific, the concerns of European allies do not carry the weight in Washington that they used to.
“The US withdrawal will likely feed European concerns that their US ally is increasingly unreliable and unpredictable. These concerns partly explain, along with increased concerns over a resurgent Russia, the increased defence expenditure seen in several of NATO’s European member states over the last few years.” (Source: army-technology.com)
03 Jun 20. Philippines suspends abrogation of defense pact with US. Philippine president has suspended his decision to terminate a key defense pact with the United States, at least temporarily avoiding a major blow to one of America’s oldest alliances in Asia.
Foreign Secretary Teodoro Locsin Jr. said Tuesday he dispatched a diplomatic note to the U.S. ambassador in Manila informing the U.S. government that the Philippines is delaying its decision to abrogate the Visiting Forces Agreement by at least six months.
Washington immediately welcomed the move.
“Our longstanding alliance has benefited both countries,” the U.S. government said in a statement released by its embassy in Manila. “We look forward to continued close security and defense cooperation with the Philippines.”
President Rodrigo Duterte’s administration notified the U.S. government on Feb. 11 that it intends to abrogate the 1998 agreement, which allows the entry of large numbers of American forces for joint combat training with Filipino troops and lays down the legal terms for their temporary stay. The termination would have taken effect after 180 days, in August, unless both sides agreed to keep the agreement.
The waiting time will be suspended by at least six months and could be extended by another half a year, according to the diplomatic letter to the U.S., which cited unspecified “political and other developments in the region.”
Philippine Ambassador to Washington Jose Manuel Romualdez told The Associated Press by telephone that he and his American counterpart, Sung Kim, helped discuss what could be done after the coronavirus pandemic hit and hampered possible talks ahead of the agreement’s actual abrogation in August.
“We both were concerned about the deadline for the termination, which was coming close,” Romualdez said.
U.S. President Donald Trump’s expression of readiness to help the Philippines deal with the pandemic during a telephone call with Duterte in April fostered the Philippine decision, Romualdez said.
Key Duterte officials led by Locsin have cited the security and economic benefits the allies have gained from the treaty alliance.
Former Philippine Foreign Secretary Albert del Rosario said the alliance has deterred aggressive Chinese actions in the disputed South China Sea, including possible construction of structures in Scarborough Shoal, a disputed fishing area off the northwestern Philippines that China effectively seized after a tense standoff in 2012.
The Philippines has protested other assertive actions by Beijing in recent months in disputed waters where Vietnam, Malaysia, Taiwan and Brunei are also locked in increasingly tense territorial disputes with China.
Duterte has defended his decision to abrogate the pact with the U.S., saying the Philippines can survive and address a long-running communist insurgency and threats by Muslim extremists in the largely Roman Catholic nation’s south without American military assistance.
“Do we need America to survive as a nation?” Duterte asked in February. “Do we need … the might and power of the military of the United States to fight our rebellion here and the terrorists down south and control drugs?”
“The (Philippine) military and police said, `Sir, we can do it,’” Duterte said. (Source: Defense News)
03 Jun 20. RoK W300Bn of Defense Budget to be Cut for Extra Spending Over Coronavirus. The government is seeking to slash about 300bn won ($244.96m) from this year’s defense budget to fund an extra spending plan aimed at coping with the economic fallout from the coronavirus pandemic, the defense ministry said Wednesday.
The planned cut is to fund a third extra budget of 35.3trn won by readjusting this year’s annual budget and issuing state bonds to cushion the economic fallout from COVID-19.
A total of 315.8bn won is expected to be reduced, 153.6bn won from arms procurement expenses and 162.2 bn won from troop operations. But the actual budget cut will amount to 297.8bn won, as 18bn won will be newly added to the budget for soldiers’ education on the latest information and communications technologies, officials said.
The planned cut, with the amount to be fixed after parliamentary approval, comes after a 1.47trn-won reduction in this year’s defense budget in April to fund the second supplementary budget. Taken together, the reduction will constitute about 3.6 percent of this year’s defense budget of 50.15trn won.
Of the total, 70.6bn won will be slashed from the budget for the planned purchase of ship-to-air missiles from the United States.
“The US government and its manufacturer had initially planned to sign a contract this month to sell the missiles to South Korea, but their contract was deferred due to internal issues. So we are to return the funds for this project to the state,” an official of the arms procurement agency said. The purchase was to be made through a government-to-government “foreign military sale (FMS)” program.
Also on the list of budget cuts are the construction of around 20 230 ton-class next-generation patrol killers and the facility construction regarding tactical ground-based guided weapons, according to the ministry.
The additional budget cut has sparked concerns over the possible impact on the country’s defense capabilities.
“The budget cut can be seen as the defense ministry’s responses to nontraditional threats against the lives and the safety of the people,” the ministry said. “Most of the budget will be cut from projects to be postponed, so its impact on our readiness posture and the financial status will be minimized.” (Source: defense-aerospace.com/Korea Herald)
02 Jun 20. Sudan appoints new defense chief amid tensions with Ethiopia. Sudan on Tuesday swore in a new defense minister more than two months after the death of the former defense chief and amid tensions with neighboring Ethiopia.
Maj. Gen. Yassin Ibrahim Yassin was sworn in before Gen. Abdel-Fattah Burhan, head of the ruling sovereign council, according to a statement from the council. Yassin came out of retirement to take the position.
Prime Minister Abdalla Hamdok and the country’s chief judge Neamat Abdullah attended the ceremony, the statement said.
The ceremony was held in the capital Khartoum. Attendees were seen in a video posted online by the sovereign council wearing face masks as a preventive measure against the coronavirus, which has further weakened Sudan’s health system.
Yassin replaced Gen. Gamal al-Din Omar, who died in March of a heart attack in neighboring South Sudan, while taking part in peace talks between his country’s transitional government and rebel groups.
Yassin told reporters after the ceremony he would support Hamdok’s government and work hard to “achieve the goals … of the transitional period.”
Born in 1958 in Khartoum, Yassin, a career army officer, studied in Sudan’s military academy and obtained a bachelor’s degree in military science from Jordan’s Mutah University. He retired in 2010, according Sudan’s official SUNA news agency.
The swearing-in came amid tensions with neighboring Ethiopia over a cross-border attack allegedly conducted by a militia backed by Ethiopia’s military.
At least one Sudanese army officer and one child were killed in an attack on Thursday by an Ethiopian militia group in Sudan’s eastern al-Qadarif province, according to Sudan’s military. Another Sudanese officer and three civilians were wounded in the incident, according to the Sudanese statement.
Sudan is on a fragile path to democracy after a popular uprising led the military to overthrow former president Omar al-Bashir in April last year. A military-civilian government now leads the country to elections in less than three years.
The transitional administration faces towering challenges, including the dire economic conditions that fueled the protests late in 2018 that eventually led the military to remove al-Bashir. Sudan’s economy has been battered by decades-long civil wars and international sanctions.
Achieving peace with armed groups is crucial for the government as it would allow a reduction in military spending, which takes up to 80% of the budget, the prime minister has said.
Sudan has been convulsed by rebellions in its far-flung provinces for decades. The rebel groups have since the outbreak of the uprising against al-Bashir announced a cease-fire.
The Sudanese military said Tuesday that rebel fighters attacked its troops in the Jebel Marra area in the Darfur region.
It said in a statement that the attackers belong to the Liberation movement, which is led by Abdel Wahid al-Nur, and another group called the Sudanese Awakening Revolutionary Council. Al-Nur rejected the transitional government after al-Bashir’s ouster.
The military didn’t say whether the attack left causalities, but said it was a “blatant and clear violation of the cease-fire.”
There was no immediate comment from either group.
The August power-sharing deal has called for the government to reach a peace agreement with the rebels within six months. This deadline was not met and both sides agreed to extend the talks to reach a deal. (Source: Defense News)
02 Jun 20. Department of Defense Accepts Korean Ministry of Defense’s Proposal to Fund Korean National Employee Labor Costs. The Department of Defense has accepted the Republic of Korea’s (ROK) proposal to fund the labor costs for all U.S. Forces Korea (USFK) Korean National (KN) employees through the end of 2020.
The lapse of last year’s 10th Special Measures Agreement (SMA), in which the Republic of Korea partially shared the burden of stationing U.S. Forces on the peninsula, and the continued absence of a subsequent agreement, resulted in more than 4,000 Korean National employees being furloughed.
USFK expects all KN employees to return to work no later than mid-June.
In March, prior to the partial furlough, the DoD funded critical logistics contracts and partially funded KN labor to mitigate some of the risk associated with a complete furlough. This enabled USFK to accomplish their mission to maintain a robust combined defense posture.
Since the last SMA lapsed on 31 December 2019, the United States has unilaterally shouldered the burden for all costs associated with U.S. Forces in Korea. These include KN labor costs, logistics contracts, and construction project design and oversight costs. Today’s decision will provide over $200M in ROK funding for USFK’s entire KN workforce through the end of 2020. Additionally, it is a direct reflection of the United States’ commitment to readiness, to our Korean employees, and to the Alliance – “the linchpin of peace and stability on the Korean peninsula.”
This decision enables a more equitable sharing of the KN employee labor burden by the ROK and the U.S. More importantly, it sustains the Alliance’s number one priority – our combined defense posture.
In regards to the lapsed SMA, the Department of Defense believes that equitable burden-sharing between the governments of the United States and the Republic of Korea is in the best interest of all parties. We strongly encourage our Ally to reach a fair agreement as quickly as possible. The United States has shown considerable flexibility in their approach to the SMA negotiations, and requests that the ROK does the same.
Without an agreed upon SMA, critical defense infrastructure projects will remain suspended, all logistics support contracts for USFK will continue to be paid completely by the U.S., and burden sharing will remain out of balance for an Alliance that values and desires parity. USFK’s mid- and long-term force readiness remains at risk. (Source: US DoD)
02 Jun 20. Study reveals ‘value for money’ impact of Australian defence spending. Economic analysis conducted by AlphaBeta Advisers, in partnership with Thales Australia, has revealed detailed insights into the impact of how defence industry spending flows through the national economy and found significant benefits to Aussie SMEs and a strong economic benefit from sovereign industry capabilities.
In the first major study of its type, economic analysts AlphaBeta Advisers were given unprecedented access to data on hundreds of thousands of payments by Thales Australia to its Australian suppliers over a three-year period.
AlphaBeta lead researcher Dr Andrew Charlton said greater understanding of the value and impact of Defence spending in the Australian economy was critical as the government ramped up major acquisition programs under its Integrated Investment Program (IIP).
Dr Charlton explained, “Prime Defence contractors such as Thales are key to translating IIP spend into effective supply chain and investment programs because they provide a link between the Department of Defence’s investment and the many other Australian businesses in the supply chain, many of which may not be defence specialists.”
Defence Industry Minister Melissa Price expanded on this, saying, “It has always been this government’s intention that the $200bn we’re investing in a record build-up of defence capability flows through to the thousands of small businesses that make up our defence industry.”
In developing the 2016 Defence White Paper, Defence adopted an integrated approach to bring together for the first time the key elements of investment needed to deliver and sustain Australia’s defence capabilities.
The key elements include equipment, infrastructure, information and communications technology, science and technology, and workforce.
Establishing a 10-year IIP will facilitate the whole-of-capability and whole-of-life approach to investment reflected in the implementation plan for the First Principles Review: Creating One Defence. It will also support strategy-led prioritisation of proposals and greater agility in investment decisions.
The IIP was developed through a comprehensive Force Structure Review that assessed Australia’s defence capability needs to meet the challenges of the future operating environment into the 2030s.
“This analysis by Thales demonstrates how our investments are creating local jobs, and also building the critical defence capability we need to deliver a capable, agile Defence Force. We’ve been upfront with the prime contractors about their obligations to partner with Australian businesses, and Thales is leading by example,” Minister Price added.
In designing the future force, the Force Structure Review ensured alignment between defence strategy, capability and resources. The result is an affordable and balanced plan for a highly capable, agile and potent Australian Defence Force and Defence capability more broadly, to meet our future requirements.
Thales Australia CEO Chris Jenkins said the data-driven approach demonstrated there was a triple-dividend for Australia from increasing spending on Australia’s advanced industrial capabilities.
Jenkins said, “First and foremost, Australia’s sovereign defence industry capabilities are vital to delivering a capability advantage to the Australian Defence Force.
“Secondly, these sovereign industry capabilities build Australia’s self-reliance and the capability of the broader Australian advanced manufacturing sector.
“Thirdly, as this data clearly shows, there is a substantial jobs and economic activity benefit from spending more of the Defence dollar in Australia. It delivers thousands of jobs spread through hundreds of business across the nation.”
Finally, Jenkins explained the importance of the findings, saying, “This analysis provides strong evidence in support of the government’s policy of requiring high levels of Australian industry capability (AIC) in its acquisition and sustainment programs. There is a strong correlation between sovereign industry capability and the greatest benefit flowing to Australian suppliers. ”
Thales in Australia is a trusted partner of the ADF and is also present in commercial sectors ranging from air traffic management and ground transport systems to security systems and services.
Employing around 3,900 people, Thales in Australia recorded revenues of more than $1.39bn in 2018 and export revenue of over $1.6bn in the past 10 years.
Thales Australia has a history of patient investment to build advanced in-country capability across manufacturing, critical systems and services. Close collaborative relationships with local customers, Australian SME suppliers and research institutions combined with technology transfer from our global business enables Thales to tailor high quality solutions for Australian and export markets. (Source: Defence Connect)
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