By Avascent Analytics team
Japan’s F-3 program is one of the largest fighter development programs outside the United States, and a lot is riding on it for Japan. But how much budget space is there for defense research & development (R&D), and for the F-3 in particular? Senior Market Analyst Aaron Lin examines potential budget scenarios and options to fund Japan’s F-3 in his latest data story. Click here to read more.
A quick look at the biggest stories of the week
Southeast Asia • US • India • Japan • Belgium
Avascent Analytics is introducing a new segment to the Weekly Wire called “Beyond the Headlines.” Each week, we will provide an in-depth look on various defense topics, ranging from country-specific defense news to emerging technologies impacting defense.
Benjamin Goodlad, Analysis Manager
On September 7, Bangladesh and the Philippines ordered a total of 100 KAPLAN medium tanks from FNSS and PT Pindad with contracts expected to be in place either by the end of 2018 or early 2019. Each country has expressed a requirement for around 50 KAPLAN tanks which have been co-developed by Indonesia and Turkey. Indonesia is also due to procure the vehicles, however the exact requirement in terms of quantity is yet to be defined. It is likely that the KAPLAN will replace the Scorpion 90 vehicles which currently provide the light tank capability for both the Philippines and Indonesia.
More broadly in 2016, Indonesia received the first Leopard 2A4 tanks from Germany, joining Singapore to become one of only two countries in Southeast Asia to operate a Main Battle Tank (MBT) weighing more than 60 tons. Indonesia plans to acquire 61 Leopard 2A4s. Traditionally, direct fire capabilities in Southeast Asian armies have been provided by lighter platforms, more suited to the climate and terrain found in the region. These platforms range from the light Scorpion, weighing 8 tons which is in service with 5 countries in the region, to the T-62 in service with Vietnam with a weight of 37 tons. The current trend for armored platforms is towards heavier weight, with a requirement for greater protection. However, with the mobility requirements set by the terrain in the region unchanged, the likelihood of heavy platforms being introduced remains low. Instead, Southeast Asian countries are expected to look towards medium vehicles in the 25 to 35-ton class range, which are still able to provide better levels of protection while maintaining mobility. This trend can already be observed with both Indonesia and the Philippines looking to procure the KAPLAN medium tank, developed by Indonesia’s PT Pindad and Turkey’s FNSS. Weighing between 30 and 35 tons, the KAPLAN has a CMI 3105 turret armed with a 105mm gun providing greater firepower than Indonesia’s Scorpion 90 vehicles, while also requiring the same three-person crew.
Despite KAPLAN appearing to be the first platform of this type to achieve success in the region, there are other platforms based on Infantry Fighting Vehicles that could also meet requirements in Southeast Asia. PT Pindad are not the only supplier in the region that can offer a medium tank capability, with Singapore’s ST Kinetic able to mount the same CMI Cockerill 3105 105mm turret onto its Next Generation Armored Fighting Vehicle (NGAFV). The region is also a potential target for suppliers from Europe. General Dynamics European Land Systems unveiled the ASCOD Medium Main Battle Tank at Eurosatory 2018, which, while heavier at 42 tons, boasts a 120mm main armament through its HITFACT turret. BAE Systems offer the CV90120 which can weigh between 26 to under 40 tons depending on the level of armor.
The next few years could also see an exportable US design emerge through the Mobile Protected Firepower program. The US Army requirement is for a platform with a maximum weight of 32 tons with either a 105mm or 120mm gun. General Dynamics Land Systems has entered a vehicle based on the ASCOD chassis whilst SAIC have partnered with ST Kinetics to offer the NGAFV. BAE Systems on the other hand has opted to enter a design based on the US M8 Armored Gun System rather than the CV90. While there is a significant increase in weight from the Scorpion to any of these medium platforms, it is likely that suppliers offering medium firepower capabilities will target Scorpion users in the region.
Science Applications International Corp (SAIC) is acquiring one of its competitors in the government technical services market through a $2.4 billion purchase of Engility Holdings, comprised of $1.5 billion in stock and $900 million in assumed debt. The move would be the latest in a recent wave of consolidation across the government services industry as corporations look toward mergers and acquisitions to not only generate growth, but also generate the necessary scale in capabilities, past performance, and experience to compete with potential giants forming within the industry. This acquisition follows the recent $9.7 billion purchase of CSRA by General Dynamics IT and the formation of Perspecta Inc from the legacy holdings of Computer Science Corporation, HP Enterprise Services, Vencore, and Keypoint Government Services. The purchase makes SAIC the second-largest government services contractor, behind Leidos, whose own acquisition of Lockheed Martin Informational Systems & Government Services division kicked off the current wave of consolidation in the market.
On September 6, the US and India signed the Communications Compatibility and Security Agreement (COMCASA), which will permit Washington to export more sensitive military technology to New Delhi and allow encrypted communications to be transmitted in real-time between both countries. The deal was signed by Defense Secretary James Mattis and Defense Minister Nirmala Sitharaman during the bilateral 2+2 Strategic Dialogue in New Delhi. COMCASA is the result of over a decade of negotiations. The delay was a function of India’s concerns that the agreement would grant the US a veto over New Delhi’s foreign policy choices and enable US spy operations. Despite lingering distrust of US intentions, India has purchased over $15 billion worth of American defense equipment in the last decade. The United States now accounts for 12 percent of India’s total defense investment, and American firms are active participants in competitions worth an additional $24 billion.
On September 10, the US State Department approved a possible sale of up to nine E-2D Advanced Hawkeyes to Japan, which could cost up to $3.1 billion including associated support and services. This follows Northrop Grumman’s recent contract award for $164 million to build Japan’s fourth E-2D. Japan has spent over $630 million on these first four E-2Ds. E-2Ds will also form a key part of Japan’s Cooperative Engagement Capability (CEC). CEC will be integrated onto Japan’s two Maya-class destroyers that will enter service in 2020-2021. Japan’s Air Self-Defense Force currently operates 13 E-2Cs, which were delivered between 1982 and 1993. Despite the E-2Cs age, earlier statements have called for the E-2D to expand the airborne early warning and control fleet rather than replace all E-2Cs, which this State Department approval does suggest. One possible scenario would be to retire the eight E-2Cs received in 1982-84 and keep the five received in 1992-93 in service alongside the new E-2Ds for another 10 years.
On September 10, the US Ambassador to Belgium urged the Belgian government to make a decision about replacing its F-16 fleet with F-35s before the current offer expires on October 14. Belgium currently has 59 F-16s, but they have been in service for several decades and have already undergone one mid-life upgrade. The US extended an offer for F-35s, but Belgium has yet to accept it. The US Ambassador’s statement implied that if Belgium does not take the current offer, then the next one may involve higher prices or delayed delivery dates. Other alternatives to the F-35 include the Eurofighter Typhoon, the Rafale, or upgrading its current fleet of F-16s.
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