The Weekly Wire: For Your Situational Awareness 7.12.19

 In Weekly Wire
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Demographics Puts Pressure on Military Recruitment in the Indo-Pacific

Aaron Lin, Senior Market Analyst

When discussing military modernization, it is easy to focus discourse on new equipment and shifting strategy. As US-China competition increases in the Indo-Pacific, regional powers have been spending immense sums of money on importing military equipment. But these large acquisitions belie the personnel problems the region’s armed forces face. The United States’ largest regional partners and China face a problem of recruitment from a population that is rapidly aging. There are simply fewer able-bodied people to recruit for military service, which raises the question of whether the new weapons being purchased will have enough people to operate them at adequate levels of readiness and proficiency.

Last February, Taiwan’s National Development Council noted that at least 20 percent of the country’s population would be 65 or older as soon as 2026. Different scenarios project that Taiwan will record zero population growth sometime between 2020 and 2027. But this problem is not confined to Taiwan. Japan and South Korea are two of the world’s most rapidly aging societies. Some young South Koreans have tried to take advantage of various exemptions, sometimes going as far as starving themselves in order to get medical exemptions from service. High profile debates in South Korea over whether Korean celebrities should receive service exemptions is only a small part of a larger service exemption issue. Japan on the other hand is considered to be the world’s oldest country, with 28 percent of its population already reaching 65 years of age or older.

These recruitment issues stretch beyond simple end strength. The Australian frigate HMAS Perth began an extensive mid-life upgrade in 2017 and was due to return to service after about a year. However, the ship has not been able to return to service due to difficulties finding enough sailors to crew the ship. It may take as long as until 2021 to return the ship to service. This raises questions about how Australia expects to operate its future fleet, which is highlighted by an eventual 12 submarines, double the six in service now. The growth of unmanned platforms and autonomous systems would appear to be a potential solution, but this raises issues of its own. These technically complex systems still require maintenance, if not more intense maintenance than the systems they are replacing. Finding technically proficient recruits means providing enough incentives (often costly) to attract talent away from the lucrative private sector. Even China has been grappling with these very issues for at least a decade, when the PLA increased starting salaries for new officers and NCO by 80 to 100 percent.

Overcoming these demographically driven recruitment problems, not to mention some cultural aversion to military service in Asia, will likely be a costly endeavor. Increasing unmanned systems and autonomy presents a partial solution that may come as an opportunity not just for those who can develop these systems but provide comprehensive training and support services for these increasingly complex systems.

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Sweden

Several news sources reported over the weekend Sweden’s intentions to join the UK’s sixth generation fighter program dubbed “Tempest,” though Sweden will make the announcement official during the Royal International Air Tattoo in late July. Sweden’s Saab expressed interest in Tempest last year when the UK revealed the program details during the Farnborough Air Show. In 2018, Saab’s CEO Hakan Bushke stated that Saab was considering both the Franco-German Future Combat Air Systems program and the UK’s Tempest program, though admitted the company was in “much more intensive discussion with the Brits than the other consortium.” The UK Ministry of Defense is working with BAE, Rolls Royce, MBDA, and Leonardo’s UK-based operations to develop the next generation fighter. Defense collaboration between the UK and Sweden is not new as BAE once had a 35 percent stake in Saab before selling its share in 2004. Both companies previously worked on earlier versions of the Gripen, making Sweden’s decision to move forward with the UK fighter program understandable. Several other countries interested in working on the Tempest fighter program including Japan, Italy, and Turkey.

The development of a joint European fighter program was meant to be an inclusive collaboration instead of having competing European fighter programs. But the UK’s decision to leave the European Union cast doubt on the country’s ability to engage in significant defense collaborations, prompting both France and Germany to move forward with the Future Combat Air System development without the UK. Germany’s Airbus and France’s Dassault are leading the efforts for the fighter program. Spain recently joined the Franco-German collaboration after signing an agreement during the 2019 Paris Air Show. Following France and Germany’s announcement to collaborate on a new fighter, the UK pushed forward with establishing its own fighter program, allocating $2.5 billion for development through 2025. It first unveiled a model of the Tempest fighter during the 2018 Farnborough Air Show.

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India

On July 5, India released the first budget since Prime Minister Narendra Modi’s reelection in May. Analysts considered it a cautious budget, with the government choosing to build on existing economic reforms—rather than audacious new initiatives—to reduce the country’s budget deficit and stimulate growth. India allocated $57.9 billion for defense in 2020, an increase of less than one percent compared to last year. Nevertheless, India will retain the fourth-largest military budget in the world behind the US, China, and Saudi Arabia. The procurement account increased 4.8 percent to $10.9 billion, after two years of declining investment. The O&M budget for fiscal year 2019 reflected the impact of the crisis with Pakistan earlier this year, registering an 18 percent annual increase.

Romania flag

Romania

Naval Group and Santierul Naval Constanta’s joint bid was declared the winner of the Romanian corvette competition. The $1.4 billion contract covers the production of four Gowind corvettes, the modernization of the Romanian Navy’s two T22 frigates, and the construction of maintenance and training centers. The four corvettes will feature the Setis Combat Management System, Thales radars, and MBDA missiles. The first ship is expected to be delivered by 2022. The selection of MBDA’s Exocet Block 3 anti-ship missiles for the corvette competition puts the firm in a favorable position for Romania’s coastal defense system. Romania wants to use the same anti-ship missiles for its new corvettes, frigates, and coastal defense system, however the coastal defense program is still ongoing and it is yet to be determined whether the concept of using one specific anti-ship missile across multiple platforms will materialize.

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UK

On July 9, the UK Ministry of Defense announced that it will invest up to GBP130 million ($162 million) on three Directed Energy Weapon (DEW) technology demonstrators. Under the current plan the three systems will undergo trials in both land and naval environments in 2023. The investment will cover the demonstrators themselves as well as the establishment of a new Joint Program Office. The decision moves the UK forward its initial investment in DEW systems, contracted by the Defence Science and Technology Laboratory under the Dragonfire program. Dragonfire, delivered by a UK consortium led by MBDA, QinetiQ, and Leonardo, is due to undergo ship-based trials later in 2019. It is likely that the new program will seek to increase the power of the system beyond the 50-kW laser provided by Dragonfire, with a view to using the system for C-RAM and counter drone functions.

Ukraine flag

Ukraine

On July 8, Ukraine requested to buy military equipment through the US foreign military sales (FMS) process for the first time. Ukraine has been receiving aid from the US since the Russian seizure of Crimea in 2014, though the US only began to provide weapons starting in 2018. Additionally, the US Department of Defense will provide an additional $250 million in aid to Ukraine. However, Ukraine is now seeking additional equipment through the FMS process – but the exact nature of that equipment has not been disclosed.

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