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South-east asia

economic insecurity puts military spending on hold

By John B Haseman, consultant,
South East Asia affairs, Grand Junction, Colorado, US.

The Northrop Grumman E-2C Hawkeye airborne early warning/command-and-control is being used by many countries including Singapore and Taiwan

South-east Asia is a very different region to what it was only a year ago. No longer a collection of robust economies with annual growth rates of over seven per cent, instead the region is beset with economic downturn, devalued currencies and a crisis of confidence at home and overseas.
It began in Thailand where rampant building resulted in an oversupply of empty hotel rooms, condominiums and office towers. Combined with corrupt banking and investment practices and lax regulation, the economic crisis quickly expanded into a regional and worldwide crisis of confidence. Economic dominoes fell; Malaysia, Indonesia, the Philippines. Even Singapore's currency slid against the dollar.
The intervention of the International Monetary Fund (IMF) and promised collateral financial support from inside and outside the region will bring a correction. The region is too dynamic, its population too accustomed to the advantages of economic growth and global economic co-operation for the economic malaise to last long. But IMF loans bring with them draconian economic policy changes that will result in painful adjustment for many of the region's countries. From a security standpoint it is fortunate that the region is free from dangerous rivalries; no country in the region faces an external security threat. Domestic unrest, the only real threat to many regional players, is minimal and easily contained. But nonetheless there are security implications in the economic malaise that besets southeast Asia.

Thailand's light aircraft carrier Chakri Naruebet is fitted with the Harrier fighter aircraft

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The GKN SIMBA.50 CAL, currently being considered by Malaysia

The most immediate consequence is that there is less money available for capital purchases of military equipment and weapons systems. For example, Thailand has shelved indefinitely several acquisition plans based on its previously buoyant economy, including requirements for submarines and military communications and imaging satellites. An F/A-18 Hornet purchase from the US also will be delayed at least two years. While no announcement has been made, many observers believe Indonesia will postpone or cancel its planned barter trade purchase of Russian Sukhoi (Su-30K) aircraft. Having made the important political point that the country is not dependent on American equipment purchases complicated by US Congressional political criticism, Indonesia does not urgently need the Russian fighters. In the Philippines, the ambitious military upgrade programme passed by its congress several years ago still has not been funded and is not likely to get funding under current economic conditions.
Some major recent acquisitions have gone forward. Thailand's light aircraft carrier Chakri Naruebet and Singapore's plans to acquire Swedish submarines apparently have been unaffected by the economic slowdown.
Politically the major changes in the region have been political violence in Cambodia and the expansion of the Association of Southeast Asian Nations (ASEAN) by the addition of Laos and Burma (Myanmar) to full membership.Cambodia's Second Prime Minister Hun Sen ousted his coequal First Prime Minister Prince Ranariddh in a violent July coup d'etat. Accusing the Prince of illegal contacts with the Khmer Rouge, Hun Sen forced Prince Ranariddh into exile. But the violent upheaval postponed the planned accession of Cambodia into ASEAN membership and drew international concern as the spectre of violence in Cambodia loomed once again.

ASEAN's expansion was expected, but Burma's admission drew criticism from western democracies over Burma's human-rights violations and repression of political opposition.
ASEAN faces a number of new challenges.
First, it must contend with the region-wide economic slowdown that has implications for co-operative development programmes as well as individual national development plans. And it has to bring its new members toward economic parity through incentives and concessions to help the economies of Vietnam, Laos and Burma to cope with financial and trade policies incumbent upon all members.
Second, ASEAN is subject to increased scrutiny on human rights. By admitting Burma ASEAN has assumed the burden of maintaining its reputation as an effective regional organisation in the face of criticism from many of its western dialogue partners.
Third, ASEAN must struggle with the security implications of economic slowdown and under-funding of military modernisation programmes. Since ASEAN relies on a series of bilateral military co-operation agreements rather than a single military pact, the security of the region depends on the security postures of the member nations. With modernisation plans postponed or slowed, the region's security posture is lessened in comparison to potential geopolitical rivals, particularly China whose ambitious military modernisation programme has not been affected by Asia's economic slowdown. Domestically the region's countries must guard against internal instability caused by the rise in unemployment and resulting turmoil of disaffected workers.
And finally the issue of political succession becomes increasingly important. Leaders in several countries are either approaching the legal end of their tenure in office or may be approaching a transition era. Security in the region will depend on their success in dealing with the challenge of economic change

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