Money-Saving Approach to Modernizing Arsenals Could Cost SE Asian Nations

The Stockholm International Peace Research Institute (SIPRI) recently released its annual survey of the world’s largest arms importers and exporters. But, sadly, the think-tank missed an opportunity to analyze trends in Southeast Asia. 

While arms imports and modernization continue, it would be unfair to call it an arms race.

Some countries are building up their naval and air assets, but most militaries in Southeast Asia remain land centric and largely focused on internal security. 

Overall, the region’s countries are cost-conscious about their imports. They often shop for bargains, and thus acquire systems or parts that do not work well with one another. 

Countries often fail to pay for servicing and maintenance of the weaponry. As a result, this tends to diminish their operational shelf life. While Thailand is a poster child for buying prestige items that it doesn’t need, most other states are more pragmatic. 

From 2016 to 2020, Thailand and six other countries in the 10-member Association of Southeast Asian Nations bloc were among the top 40 arms importers in the world, according to the data from SIPRI. Vietnam was close to the top of the list, ranked 16th in the world. Collectively these seven ASEAN countries – which did not include Cambodia, Laos, and Brunei – accounted for 8.4 percent of global arms imports. 

This marked a decline from the period of 2011 to 2015, when the seven accounted for 9.2 percent of global imports. This is in line with SIPRI’s findings, which saw an overall 8.3 percent decline in imports in Asia and Oceania during those two time-frames. 

Vietnam, which is trying to quickly modernize its military to cope with the threat of China, imported more weaponry than any other Southeast Asian country from 2016 to 2020. During that time, Vietnam accounted for 1.8 percent of global arms imports. 

That signified a 41 percent drop from its share between 2011 and 2015, the height of its modernization program, which saw a massive increase in Hanoi’s naval capabilities. Vietnam’s largest suppliers were Russia, which accounted for 66 percent of its imports, followed by Israel (19 percent), and Belarus and South Korea, which were tied for third, each accounting for 4.8 percent of imports. 

Singapore, ranked 17th in the world, accounted for 1.7 percent of global arms imports from 2016 to 2020, the SIPRI figures show. The United States was the city-state’s largest arm supplier (36 percent), followed by Spain and France, which accounted for 25 and 17 percent, respectively. 

Indonesia, Southeast Asia’s largest and most populous country, ranked 18th in the world, also accounted for 1.7 percent of global imports. Compared with 2011 to 2015, Indonesia’s share of global arms imports fell by 18 percent. The United States was Jakarta’s largest supplier, accounting for 23 percent of arms imports, closely followed by the Netherlands (19 percent) and South Korea (17 percent). 

Sales from the United States were dominated by a squadron of Apache attack helicopters, while surface warfare ships made up exports from the Netherlands, and submarines (both exported and licensed) dominated South Korean sales. 

Thailand, for its part, was the 23rd largest importer of arms from 2016-2020, accounting for 1.2 percent of global imports, according to SIPRI data. This represented a 44 percent increase, from 2011 to 2015. Apparently, coup d’états have consequences. 

Thailand’s largest suppliers were South Korea (26 percent), (China 22 percent) and Ukraine (12 percent). China has been aggressively trying to penetrate the Thai arms market after Thailand’s second coup d’etat in eight years, and has sold Thailand submarines, surface warfare vessels and main battle tanks. 

The Philippines was the 31st largest importer in the world, accounting for 0.8 percent of global imports. Although a minor player in the global arms market, the Philippines accounted for the largest growth in Southeast Asia between 2011 and 2015, when it accounted for 0.2 percent of global imports to 2016-2020 – a 229 percent increase. 

South Korea was the Philippines largest supplier, accounting for 42 percent of imports, followed by Indonesia. Jakarta, which has been aggressively selling its amphibious warfare ships to the Philippines, accounted for 17 percent of Philippine imports. The United States, which also supplied the Philippines with the same percentage of its arms imports, also transfers considerable amounts of weaponry to Manila under its surplus equipment program. 

Myanmar was the 33rd largest importer of weaponry in the world in 2016-2020, accounting for 0.17 percent of global imports. This marked a 40 percent decline from the 2011-2015 period. 

China supplied 48 percent of all Myanmar’s weaponry, followed by India (16 percent) and Russia (15 percent). None of these suppliers is likely to heed any U.N. calls for an arms embargo on Naypyidaw after the Feb. 1 coup d’etat. 

Finally, Malaysia, ranked 40th in the world, accounted for just 0.5 percent of global imports from 2016 to 2020, according to the SIPRI report. Though small, this was a 114 percent increase from 2011-2015. Malaysia’s main suppliers included Spain (32 percent), Turkey (17 percent), and South Korea (11 percent). 

Emerging trends 

There are two things to note about weapons imports across the region. 

First, the major modernization programs, especially those that were to quickly bring naval and air assets online in Vietnam, Indonesia, and Thailand, appear to be slowing.  

Second, Southeast Asian states are extremely cost conscious and have been trying to modernize weaponry on the cheap. 

Vietnam has been the most successful in negotiating licensing agreements for local production. Indonesia has tried to follow suit. Indonesia and Malaysia have tried to modernize their air forces with a second round of commodity barter agreements with the Russians; so far, to no avail.   

It’s interesting also to look at the flip side of the equation and to focus on the exporters. 

Singapore is the only country that can afford to import high-end weaponry from the West. American firms continue to lose market share. Most other countries are searching for low-cost suppliers, or countries that will license for local production. 

Overall, Russia remains the single largest supplier of weaponry to Southeast Asia. Russia accounted for 66 percent of Vietnam’s total imports and 15 percent of Myanmar’s imports from 2016-2020. It has recently entered the Thai and Philippine markets. 

Countries of the former Soviet bloc that still have production lines and can supply spare parts and ammunition for Soviet-era weaponry still have clients in Southeast Asia. Vietnam is Belarus’s largest export market. Ukraine also does steady business in the region. 

But there are new entrants to the marketplace. 

Of particular note is South Korea, the largest supplier to Thailand and the Philippines and the third largest supplier to Vietnam, Indonesia, and Malaysia. The Philippines and Thailand are South Korea’s second and third largest export markets, respectively. South Korea is important to the defense of Southeast Asia in ways that are simply not appreciated. 

Israel is another country to watch. 

It went from being a non-player in Southeast Asia to very quickly and aggressively supporting Vietnam’s modernization program. In addition to supplying Vietnam with short-range surface-to-air missiles, Israel is now producing several lines of small arms in country. Vietnam is Israel’s third largest client. 

Israel has previously sold weapons to Myanmar, Singapore, and Thailand, but has otherwise been unable to penetrate the growing Southeast Asian arms market, despite the fact that it sells high-end weaponry at competitive prices. 

Zachary Abuza is a professor at the National War College and an adjunct at Georgetown University in Washington. The views expressed here are his own and do not reflect the position of the U.S. Department of Defense, the National War College, Georgetown University or BenarNews.