ASEAN Defense: 6) Yingluck to focus on building-up Thailand’s arms industry but what of the ASEAN’s concept plans?

/ September 16, 2011

  • By Stingray, Thai Intel’s national security journalist

Last month, when Yingluck gave her government’s policy to the Thai Parliament, to debate on, and to officially take office after the policy address-during her address, Yingluck, said, quote: “I will develop Thailand’s internal arms industry.”

Thailand’s weapons purchase, for ages, have been locked up by foreign suppliers and local representatives. Even in government to government contracts-there have always been facilitators. Thailand’s defense spending, since the 2006 coup, have sky rocket-resulting in a massive in flood of foreign weaponry-purchased at countries with a track record of corrupt arms dealings-such as the Ukrain-with even Sweden, seeing its fighter aircraft sales-rocked with corruption at some countries.

Meanwhile, as Thailand rely nearly exclusively on foreign weaponry, other countries such as Indonesia, is rocketing ahead in indigenous arms industry-signing agreement with S. Korea, for example, to build a wide range of arms-from fighter jest to submarines. Even Malaysia, is involved in a massive local armored personal carrier industry.

Thailand, meanwhile, have namely focused its efforts on small naval patrol crafts and experimented with rockets. In fact, it was during Taksin administration, that Thailand’s own arms industry, took off-with the establishment of a target of developing a local missile industry.

However, recently, ASEAN countries got together, to establish a mandate, to jointly develop an ASEAN defense industry. The following is from the Center for Strategic and International Study.

The following is from CSIS:

Can ASEAN Integration Deliver in Defense Technology?

Sep 15th, 2011

by admin.

 In May 2011, the defense ministers of the Association of South East Asian Nations (ASEAN) agreed to adopt the concept paper on ASEAN Defense Industry Collaboration (ADIC), which aims to “to encourage the development of industrial and technological strength, and to seek opportunities to promote technological sharing” and reduce annual defense imports from non-ASEAN members from $25 billion in 2010 to $12.5 billion by 2030. While a unique and ambitious development, ADIC will need to overcome significant challenges and incorporate key elements if it is to succeed.

The first challenge is the recurrence of conflict in the region, including territorial disputes at borders such as between Cambodia and Thailand and the dispute over the Spratly Islands in the South China Sea, which in the past has hindered other forms of defense collaboration. The second is governments’ desires for full reciprocity in defense trade despite the imbalance in national defense industrial capabilities. (Thailand, with eight percent of its defense imports coming from ASEAN members between the years 2000 and 2010, is the only exception.) Only two ASEAN members, Singapore and Indonesia, have a significant defense industrial base, and only one, Singapore, is represented on the list of top 100 global defense companies. Singapore exports its defense goods and services to several countries, whereas Indonesia exports almost exclusively to three: Malaysia, Pakistan and South Korea. Moreover, Singapore’s exports are diversified, encompassing aircrafts, ships, armored vehicles and artillery, while Indonesia’s exports consist primarily of transport and patrol aircraft and helicopters. None of the other ASEAN members have significant defense industrial bases.

In light of these challenges, it is unsurprising that the region remains heavily dependent on defense imports. And while the ADIC concept represents a first step towards changing the current dynamics, it lacks two key elements. The first is a mechanism by which to grow the ASEAN members’ defense industrial bases in a manner that meets regional demand. This will require a coordinated effort to share at least some of the defense requirements of individual defense ministries, in itself no trivial task. It will also require that those requirements then be met by an ASEAN member. Lastly, it will require investments by governments, the private sector, or a combination of both to build the relevant defense industrial bases.

The second element that ADIC must develop is a policy enabling effective intra-ASEAN trade in defense goods and services. Such a policy would ease export control requirements as well as customs regulations. Taken a step further, policies would be implemented requiring member nations to give preference to companies from other member nations when making defense acquisition decisions. Only if a capability could not be acquired from an ASEAN member would national governments be allowed to approach suppliers from non-ASEAN nations.

When it comes to an industry as closely linked to national security as the defense industry, governments are less likely to participate in international collaborations. To succeed, ADIC will need to overcome the above-mentioned challenges, and doing so will require the inclusion of key elements that require a strong political commitment and a coordinated implementation strategy. For a broader breakdown of these issues, readers can see at our recently published DIIG Current Issues No. 25 ASEAN Defense Industry Collaboration here.

Guy Ben-Ari is Deputy Director and Fellow of the CSIS Defense-Industrial Initiatives Group (DIIG). Sneha Raghavan is an intern with the CSIS Defense-Industrial Initiatives Group.

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