The Weekly Wire: For Your Situational Awareness 6/5/20

 In Weekly Wire

South Korea

On June 3, the South Korean government announced it is looking to make additional cuts of $244.9 million to its 2020 defense budget. The budget reduction will free up funding to support wider measures to mitigate the economic impact of the COVID-19 pandemic. The $244.9 million cut will be drawn from procurement ($126 million) and operations ($133 million), though an additional $14.8 million will be added to train soldiers in newly acquired work-from-home IT technologies. The plan, which is still to be approved by parliament, will add to the $1.2 billion cut announced in April 2020. The combined total reduction would equate to a 3.5 percent decline to the planned 2020 spending. It should be noted that even with this reduction, total spending would remain higher than in 2019. However, with reductions focused on procurement and O&M budgets, there will be a knock-on effect with program delays anticipated. Local media reports have suggested that the procurement of ship-to-air missiles from the US has been delayed. It is believed that this refers to the planned procurement of SM-2 Block IIIB missiles, announced via the Defense Security Cooperation Agency in May 2019. Shipbuilding is also expected to be affected, particularly the next generation patrol boats. The construction of a facility for ground-based tactical missiles is also likely to face delays.

Norway

On May 29, the Norwegian Ministry of Defense announced plans to boost defense investment as a way to both support Norwegian industries and build on the armed force’s capabilities. This decision comes after Norway released its Long-Term Defense Plan 2020 in April, in which the plan would continue increasing defense spending along the same lines as the previous Long Term Defense Plan released in 2016. Under this new announcement, Norway will increase defense investment spending by roughly NOK 1 billion ($104 million) to upgrade the country’s corvettes, tanks, and invest in research and development. Norway is also allocating NOK 500 million ($52 million) towards upgrading the Royal Norwegian Navy’s Skjold-class corvettes, anticipated to take place between 2020-2024. The 2020 Long Term Defense Plan stated that these corvettes would continue to be in service until 2030, indicating that Norway will likely seek their replacement by the end of the decade. Additionally, the Royal Norwegian Army will upgrade its CV90 tanks and acquire 20 more new CV90s between 2020-2023. The expected cost for the CV90 upgrade is NOK 600 million ($62 million). While Norway will also boost R&D funds, it is only allocating an additional NOK 20 million ($2 million) for development.

Taiwan

On June 2, Taiwan’s AT-5 advanced jet trainer conducted a preflight taxi test in preparation for a flight test later this month. The AT-5 is part of an effort to revitalize Taiwan’s local aerospace industry, which has deteriorated since the development of the F-CK-1 fighter upon which the AT-5 is based. Many of the engineers who worked on the F-CK-1 have since retired, leaving a significant gap within Taiwan’s aerospace industry. Deliveries of 66 AT-5 are planned by 2026, after which Taiwan is considering the development of a fighter aircraft. Although Taiwan wants this future fighter to be 5th generation, it will be very difficult for Taiwan to obtain the necessary technology for such an aircraft. Taiwan may still press on with the program with reduced requirements as the country tries to build up its local defense industry. This acts as a hedge against the future possibility of the US deciding not to sell advanced weapons to Taiwan.

India

On June 2, India announced that it will procure an additional 156 BMP-2K Sarath Infantry Combat Vehicles. The vehicles are to be locally manufactured as part of the “Make in India” initiative. The vehicles will be supplied by the state-owned Ordnance Factory Board under a contract worth $145 million. The vehicles will be delivered beginning in 2023 and be issued to the Indian Army’s mechanized infantry battalions. The Indian Army currently fields approximately 1,500 BMP-2K/K2 platforms, having locally produced over 2,500 since 1987. This order follows a batch of 362 vehicles ordered in 2014, and comes as the Indian government ramps up its support and prioritization of local defense manufacturing as a bulwark against economic impacts from COVID-19.

Italy

On May 28, Italy confirmed that it will procure 40 Centauro 2 wheeled tank destroyers. The contract for the 8×8 vehicles will be the second order, following an initial batch of 10 ordered in 2018. The contract also includes a follow-on option for an additional 56 platforms, which would take the total number procured to 106. This remains lower than the initially stated 136-vehicle requirement. Including the follow-on option and a 10-year support package, the contract is worth $1.3 billion. The procurement is being funded using a combination of money from the Ministry of Defense, the Ministry of Economic Development and the Ministry of Economy and Finance. Italy has traditionally used funding from the Ministry of Economic Development to top-up procurement funds for local production, but the fact that Ministry of Economy and Finance funding is also being used suggests that Italy is continuing to use defense procurement as an economic stimulus.

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