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China Beware: India Tests Nuclear Missile That Can Reach Beijing

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India has successfully tested a nuclear-capable long range ballistic missile that can reach all major Chinese cities.

As expected, India conducted the first canister test launch of its Agni-V nuclear-capable ballistic missile on Wheeler's Island in the Bay of Bengal. The test was a complete success, the government said in a press release.

“India’s ICBM Agni 5 was successfully test fired from a canister today 31 Jan 2015 at 0809 hrs.” the statement said. “The missile hit the designated target point accurately, meeting all mission objectives.”

The Agni-V is a three-stage solid-fueled intermediate-range ballistic missile (IRBM) with a range of about 5,000 km while carrying a 1.1 ton payload. When inducted into India’s Strategic Forces Command, it will give India the ability to threaten all of China’s major cities with nuclear weapons, a capability that Delhi currently lacks. China has long boasted ICBMs capable of reaching all of India.

This was the third test of the Agni-V following ones in 2012 and 2013. However, the test on Saturday was the first time that India tested the Agni-V from a mobile launcher mounted on top of a truck. A canister launched missile has greatly survivability and can be launched much more quickly than ones at a fixed launch site.

As the press release explained:

“The earlier two flights of Agni 5… were in open configuration and had already proved the missile. Today’s launch from a canister integrated with a mobile sophisticated launcher, was in its deliverable configuration that enables launch of the missile with a very short preparation time as compared to an open launch. It also has advantages of higher reliability, longer shelf life, less maintenance and enhanced mobility.”

Avinash Chander, the outgoing chief of India’s defense technology agency, the Defence Research and Development Organisation, which designed the Agni-V, underscored the importance of the canister launch. “This is a momentous occasion. It is India’s first ever ICBM launch from a canister and is a giant leap in country’s deterrence capability.” Chander, who left office following the test on Saturday, said that the launch was the “best farewell gift.”

Indian Prime Minister Narendra Modi also praised the successful launch on Twitter. “Successful test-firing of Agni V from a canister makes the missile a prized asset for our forces. I salute our scientists for their efforts,” the Indian leader tweeted.

Indian media outlets reported that DRDO will conduct a few more tests of the Agni-V before it will be officially inducted into India’s Strategic Forces Command.

Image: DRDO

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Destination Beijing: India to Test 'China-Killer' Nuke Missile

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India is readying the first canister test of its so-called “China killer” long-range ballistic missile.

This week the New Indian Express reported that on Saturday the Defense Research Development Organization (DRDO), India’s top defense technology agency, will conduct the first canister test of its Agni-V at the Integrated Test Range (ITR) on Wheeler Island.

According to the newspaper, over three hundred scientists from various government agencies are currently preparing for the test. The report said that “During the test, Agni-V will be fired from a sealed canister mounted on a launcher truck. With a dummy payload, the missile will be pushed out of the canister by a gas generator after which the actual stage separations will occur as per the coordination.” 

The test has been postponed twice since December owing to President Obama’s India trip and a scheduling conflict with Prime Minister Modi, who had expressed interest in watching the test in person. It’s unclear if Modi will attend the test on Saturday, however, the test is expected to proceed as scheduled in honor of outgoing DRDO chief Avinash Chander, who is widely regarded as the architect of the Agni missile class. Chander was fired earlier this month over scandals regarding Indian defense contracts.

The Agni-V is a three-stage, solid-fueled missile that can travel 5,000 km while carrying a 1,000 km payload, making it India’s longest range missile. It is often referred to as India’s first intercontinental ballistic missile (ICBM) in local media. Although it demonstrates mastery of all the necessary ICBM technologies, technically it is only an intermediate ballistic missile as ICBMs have ranges of at least 5,500 km.

It was quickly dubbed the “China killer” by Indian media outlets when it was first tested in 2012 because it is the first Indian ballistic missile capable of holding most of China— including major cities like Beijing— under nuclear threat. China has long had the ability to reach all of India with nuclear-armed missiles, putting Delhi at a relative disadvantage.
This will be the third time India has tested the Agni-V following the first test in 2012 and another one in 2013. A month before the second test, Tessy Thomas, the director of the Agni Missile Project at DRDO, said that the Agni-V would be tested two or three more times before being inducted into the Indian armed forces.

This raises the possibility that the Indian military will receive the missile following Saturday’s test, should it prove successful. This is especially true given that this will be a full canister test of the missile, which is one of the most highly touted advances the Agni-V makes over its predecessors. As Times of India explained following the first test, “Unlike the earlier largely rail-mobile missiles, Agni-V can be easily stored in hermetically sealed canisters and swiftly transported atop launcher trucks by road. This will give the armed forces the required operational flexibility to pick and choose from where to launch the missiles.” TOI also noted that the Agni-V boasts “a ‘highly accurate’ inertial navigation system.

Once inducted into the armed forces, DRDO will go to work on equipping future Agni-V missiles with multiple independently targetable reentry vehicles (MIRVs), which will allow each missile to carry between three and ten nuclear warheads, each of one of which can be aimed at a different target. As The National Interest has noted in the past, China is also building MIRVed missiles, setting the stage for a dangerous arms race that could destabilize nuclear Asia.

Image: Wikimedia

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The Ultimate Nightmare: Why Invading North Korea Is a Really Bad Idea

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Earlier this month, Pascal-Emmanuel Gobry argued for a US invasion of North Korea.

Thankfully, the general response has been quite negative (here, here and here). Invading North Korea is a terrible idea, and it is worth laying out why in some detail. I do not intend this as a particular shot against Gobry – I do not know him personally – but rather against this general idea, as it does come up now and then.

In 1994, the Clinton Administration came close to launching a massive air campaign against the North (well-discussed here). Then in the first term of President George W Bush, regime change was the watchword and North Korea was on the “axis of evil.” If the Iraq invasion had worked out, it appears other states were on the Bush hit list. Neoconservatives (neocons) love to loathe North Korea.

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I should note, however, that in my seven years working in Korea on Korean security issues, I have never heard a reputable Korean analyst argue for preemptive attack in an op-ed, at a conference, on TV, and so on. Nor have any of my hundreds of students over the years argued for this. This is a Western debate that has little resonance with the people who would mostly carry the costs – already a big problem for Gobry's argument.

1. Moral Revulsion Is Not Enough:

Gobry, and President Bush who placed North Korea on the axis of evil, both share an admirably strong moral revulsion towards North Korea which motivates their hawkishness.

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Certainly that revulsion is warranted. There is little dispute that North Korea is the worst country on earth, although perhaps the emerging ISIS 'state' is giving it a run for its money. The moral argument against North Korea became clear as early as the 1950s, when Kim Il-sung solidified control of the North and turned it into a cult of personality so servile and vicious scholars began using the neologism “Kimilsungism” to describe it.

But there are of course many nasty, awful dictatorships. Perhaps none as awful as North Korea, but certainly huge numbers of people have suffered in many other states, both powerful and weak. Mao's China comes to mind, as does Cambodia under Pol Pot, or Zimbabwe and Syria-ISIS today.

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For a brief moment under George W Bush, after his second inaugural address, it looked as if “promoting freedom around the world” might actually become US foreign policy, thereby justifying widespread global military pre-emption. But that was always wildly impractical, and the American public rejected it immediately. And if there is anything we have learned from regime change in places like Iraq and Libya it is that the unintended consequences and bloodletting can be extreme.

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2. South Koreans really, really don't want to invade North Korea:

Much of the Western debate on North Korea assumes that South Korea will simply go along with whatever decisions emerge from Washington.

I thought the same before I moved to Korea. Like many, I figured that the ROK was a democratic ally standing “shoulder to shoulder” with the US for freedom, democracy, and so on. But South Korean foreign policy is far more realist. I have been arguing for a long time that South Koreans are not neocons and that they really don't want to up-end the status quo if it is likely to be costly.

Polls have shown for years that South Koreans fear the cost of unification, increasingly don't see North Koreans as a fellow people (for whom they should make a huge sacrifice), and don't think North Korea is a huge threat. The polls also show they dislike Japan almost as much as, if not more than, North Korea, they dislike conscription, and worry a lot that the US might do something rash and provoke a war.

Neocons like Gobry may see this as a moral failing – South Koreans slacking on the defense of democracy and their historic responsibility to end the world's worst tyranny. I will admit myself that I think South Koreans need to step up more on this. But that is ultimately for South Koreans to decide.

Far more South Koreans would like to see the two Koreas slowly grow together after North Korea has changed on its own (for example, by a coup, by Chinese pressure, or by internal breakdown). There are lots of hawks in South Korea (try here and here), but not even the most extreme argue for a preemptive invasion.

3. North Korea has Nuclear Weapons:

If the first two reasons are a little soft, this one strikes me as a show-stopper. The US has never fought a sustained conflict against a nuclear power.

Indeed, the very reason North Korea built nuclear weapons was to deter US offensive action. It is hardly a leap of logic to think that the North would launch once US ground forces arrived on its territory. Gobry assumes, far too blithely, that the US could find all the missiles and hit them before they launch. That is a helluva gamble, and certainly not one South Korea or Japan, the likely targets, want to make. At the very least, we cannot go over the heads of Seoul and Tokyo if we choose to seriously strike the North.

4. The (North) Korean People's Army Would Probably Fight:

This is a tricky debate, because we have no good opinion data on KPA morale. We guess at readiness based on drills and the ferocious-looking marches through Kim Il-sung Square and so on. But we don't know.

The neocon position in such situations is to again assume the best – that rogue state armies are paper tigers and would collapse quickly. Certainly the Iraqis did in 1991 and 2003. And I would agree that KPA would suffer revolts if pushed into an offensive against the South. But a US invasion would justify all the propaganda Northern soldiers have heard for decades. Overnight they would go from a conscript army used primarily as slave labor on construction projects to defenders of the nation against a long-foretold invasion.

Do we have any sense that the US military would be “greeted as liberators”? That is yet another huge gamble, because if we are wrong, it is a war against a state where almost every able-bodied male has extensive military training. Even in Iraq, the insurgency showed how tenacious third-world nationalism is and how easy it is for such feelings to ignite when faced with armed foreigners, however noble their intentions.

5. The People's Liberation Army Might Fight Too:

A US invasion would also set US-Chinese relations back by decades, and almost certainly push the US and China into a larger, violent, heavily militarized cold war throughout Asia.

Neocons who loathe China's repressive oligarchy might not care, but post-Iraq, that frightening insouciance about the world's second largest economy would almost certainly be a minority opinion in the West, and definitely would be among America's Asian allies who would carry most of the costs of militarized Sino-US competition.

Indeed, if the US invasion spun out of control – which is easy to envision given the North's nuclear weapons and the size of the KPA – China (and Japan) could easily get chain-ganged in. China went to war in 1950 to keep the Americans off the Yalu River, and that was a war the North started. If the US were to invade, America would suddenly look like an aggressive, aggrandizing power. It would be easy to see the PLA fight once again for essentially the same reasons.

6. Reconstruction would fall to the US:

Here is yet another Iraq lesson neocons seem blind to. When regimes like Libya or North Korea are decapitated, something new needs to be put in place.

Gobry's assumption is simply that South Korea would absorb ex-North Korea. And it probably would in more traditional collapse scenarios. But if the US were to proactively invade North Korea, it would be easy to see Southern and global opinion arguing that this is yet another mess made by belligerent Washington that it should clean up. And there is also the potential for a nasty insurgency by Kimist dead-enders, a point Gobry does not even consider.

Neocons really need to learn a few lessons from Iraq and the war on terror about the use of American force.

This piece was first posted on the Lowy Interpreter here.

TopicsSecurity RegionsNorth Korea

China's Worst Nightmare? Japan May Sell India Six Stealth Submarines

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For years China has excelled at antagonizing Japan. Now Tokyo may have the chance to extract some revenge.

According to Indian news outlets, the Narendra Modi government has approached Japan about building it six stealth submarines.

“New Delhi has forwarded ‘a proposal’ to Tokyo to ‘consider the possibility’ of making its latest diesel-electric Soryu-class submarines in India,” Times of India reported on Thursday, citing unnamed sources.

New Delhi’s Project-75-India to acquire six advanced diesel-electric submarines will be worth more than Rs 50,000 crore ($8 billion), and likely much more. France’s DCNS, Germany’s HDW, Russia’s Rosoboronexport and Spain’s Navantia are all expected to compete for the contract. Since the submarines will be built in India, foreign companies that wish to compete for the contract are expected to form a joint venture with an Indian shipyard.

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India’s proposal comes at a time when New Delhi and Tokyo have been steadily strengthening ties under the leadership of Modi and Japanese Prime Minister Shinzo Abe. Modi and Abe, both nationalistic leaders seeking to expand their respective countries’ regional profiles, are seen as enjoying a close relationship, which could help Tokyo’s chances in the competition. That being said, France, Germany and Russia have all built submarines for India in the past, TOI noted.

The proposal also comes at a time when Japan is seeking to break into the global arms market following the lifting of a decades-old, self-imposed ban on selling weaponry abroad. Since the ban was rescinded, Japan has already discussed selling India ShinMaywa US-2i sea-and-rescue amphibious planes.

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Tokyo is especially keen on breaking into the global submarine market, which is currently dominated by countries like Russia, France and Germany. Defense analysts believe Tokyo’s Soryu-class submarines will be a highly competitive alternative to their Russian, French and German counterparts. As frequent TNI contributor Robert Farley noted last September:

“At 4,200 tons submerged, the Soryu-class is considerably larger than either the [German] Type 214, [French] Scorpene, or improved [Russian] Kilo, and can carry a much heavier weapons load. This size also makes them quieter and longer-ranged than the other boats on the market. At current price expectations of around $500 million, the Soryus are not wildly more expensive than the other boats.”

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Already, Japan has been engaged in intense discussions with Australia over the latter’s program to purchase 12 diesel-electric submarines. Winning the Project-75-India contract would be a further boon to Mitsubishi Heavy Industries and Kawasaki Heavy Industries, which manufacture the Soryu-class subs.

Still, don’t expect to see India’s Navy operating Japanese subs anytime soon. India isn’t expected to tender a winner for two years, and it will be at least another 7-8 years after that before the first subs start rolling off the assembly line. Given India’s notoriously cumbersome defense acquisition bureaucracy, these timetables should be viewed as the best case scenario.

Image: U.S. Navy photo by Mass Communication Specialist 1st Class Jeffrey Jay Price.

TopicsSecurity RegionsAsia-Pacific

Japan's Record Defense Budget: Should Asia Be Concerned?

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Much has been made in the media (for instance, here and here) about the Japanese government’s “record” defense budget request for Fiscal Year 2015. With ¥4.98 trillion (roughly US$42 billion), it’d be the “largest budget ever,” according to a Defence Ministry official. Yet, while such statements imply a shift in Japan’s defence policy, the increase is much less radical and doesn’t indicate a more assertive strategic approach.

True, defense spending is increasing for the third consecutive year, meeting Prime Minister Shinzō Abe’s promise to reverse the decade of declining expenditure.

But defense spending will remain below 1% of gross domestic product (GDP). And the Abe government’s also increasing spending in other portfolios—it’s requested a record-high general budget of ¥96.34 trillion. So the higher defence spending doesn’t indicate Japan’s ‘remilitarisation’ as has been alleged by some of its neighbours, most notably China. Rather, the increase will allow the Japanese Self-Defense Force (JSDF) to continue working towards turning into a ‘Dynamic Joint Defense Force’—that is, a more mobile, networked JSDF investing in air-maritime denial capabilities in order to defend Japan’s archipelago whilst increasing interoperability with its US ally.

Consequently, the 2015 defense budget request provides funding for key capabilities already announced in the “National Defense Program Guidelines (NDPG) for FY2014 and beyond.” Big ticket items include the procurement of up to 20 P-1 maritime patrol aircraft; beginning work on a third Atago-class destroyer fitted with the Aegis combat-system for ballistic missile defence; and the acquisition of six additional F-35A Joint Strike Fighters. It also contains funding to enhance the JSDF’s mobility, ISR, and amphibious capabilities. That includes the acquisition of five tilt-rotor V-22 Osprey helicopters (17 planned in total) and the first of three RQ-4 Global Hawk UAVs. The MoD also announced its intention to buy up to 30 AAV-7 assault vehicles (also used by the US Marines) for its emerging amphibious brigade. Further, Japan will continue upgrading its F-15 and F-2 fighters, as well as adding another Sōryū-class submarine to its inventory (including work to improve the propulsion system).

Some critics have argued that the defence budget increase is still insufficient to meet the reform goals. But implementation of those goals is a long-term process and Japan’s defence spending needs to be understood within the current domestic political and economic context. Despite the Liberal Democratic Party’s (LDP) victory in December’s ‘snap election’, Abe’s political mandate for major increases in defence spending remains limited. Importantly, the election strengthened the position of the LDP’s coalition partner, the pacifist Komeito party which opposes more robust defence spending as a basis for a more active defense posture.

As well, while Japan still spends below 1% of GDP on defence, the total amount has to be seen in comparative perspective. Behind the US, China and Russia, Japan is the fourth largest spender in the Asia–Pacific region, and ranks seventh in the world in 2013 (above powers such as Germany and India).

Current spending on defense provides Japan with a significant capacity to maintain a modern, high technology force. Indeed, should Tokyo decide to increase its defence spending if the strategic environment deteriorates dramatically to, say, between 1.5% and 2.0% of GDP, it’d quickly climb up the global rankings. And contrary to conventional wisdom, Japan’s enormous government debt of around 240% of GDP isn’t such a problem for the country’s strategic solvency. Japan’s latent capacity to increase defense spending significantly in the future shouldn’t be underestimated.

Yet, at this point such a development is neither desirable nor necessary for Japan. A major defense spending increase would rattle the nerves of its Asian neighbors. The moderate increase in defense expenditure combined with targeted investments in air-sea denial capabilities aims to send a signal that Japan’s military modernization isn’t about upsetting the regional security order. The goal isn’t to compete with China’s military in terms of platform numbers and spending. Rather, by investing in a smaller, but highly sophisticated JSDF focused on the defense of Japanese islands, the aim is to pose significant challenges to Chinese military planners contemplating offensive operations to seize Japanese islands. Indeed, at present the JSDF would probably be able to defeat such an attempt even without support from the US.

Lastly, while JSDF modernization strengthens Japan’s leg within its US alliance by improving interoperability and boosting its islands defence capability, it can continue to rely on US’ offensive firepower as a means of deterring foreign aggression. That’s not “free-riding” as often implied but an arrangement that’s in the best interest of both parties, and indeed the region. In the absence of a radical shift in those domestic and external parameters, Japan’s defense spending won’t increase dramatically any time soon.

Benjamin Schreer is a senior analyst at ASPI. This first appeared in ASPI’s The Strategist Blog here.

TopicsSecurity RegionsJapan

Sorry, China: You Can’t Have It Both Ways on North Korea

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Chen Dingding’s recent article, “Sorry, America: China Can't Solve Your North Korea Problem,” argues unconvincingly that China is unable to change North Korea’s behavior—he leaves that job to Washington—but influential enough to shape the orientation of a unified Korea.    

Chen’s article is useful in its summary of the debate in China over how to deal with Pyongyang. He asserts that although some Chinese call for continuing to support the North Korean government and others call for abandoning it, the position that holds sway within the Chinese government is that China should “pressure” Pyongyang to stop nuclear testing, return to disarmament talks, reform the North Korean economy, and eventually dismantle its nuclear weapons. Chinese efforts in this direction would be welcome.

When Chen moves beyond reporting the atmosphere in Beijing to policy analysis, however, he is less insightful. 

The central thrust of his argument is the familiar Chinese line that the United States must do more. Based on his own assessment, however, China has decided to get tougher on the Kim regime during the same period that U.S. policy toward North Korea has been stagnant. More vigorous Chinese intervention has long been a U.S. goal. Therefore the United States is winning by doing nothing, seemingly successfully passing the buck to China to do the dirty job of “pressuring” the DPRK. 

Chen recommends that both China and the United States offer North Korea a “security guarantee plus economic assistance.” From the U.S. standpoint, this recommendation is a total throwaway. Washington has repeatedly stated it has no intention to invade Pyongyang, and this is believable since it has passed on many opportunities. There is zero support in America for economic assistance prior to progress in de-nuclearization. At the same time Chen calls for China to do the exact opposite of offering a security guarantee, saying China should also threaten the Kim regime with a “reform or collapse” ultimatum.

Chen claims that solving the North Korea problem “lies in the hands of the U.S.” because North Korean leaders worry relatively little about a deterioration of relations with China, but worry a lot that “America’s perceived malign intentions could threaten their survival.” This analysis does not jibe with Pyongyang’s repeated use of hyper-bellicose (even nuclear) threats against the United States and its South Korean ally as a tactic to get attention that the Kim regime hopes will lead to negotiations and handouts. A policy of extortion exhibits not fear, but rather confidence on Pyongyang’s part that the wealthy democracies will not opt for war.

Finally, while arguing that China lacks the leverage to discipline North Korea, Chen simultaneously displays disturbing hubris in asserting that a united Korea will not be a U.S. ally because “China has adequate capabilities to influence the eventual unification process.” The Chinese are unwise if they underestimate Korean anxiety about Chinese domination, and overconfident if they assume they can control a reunification process that might happen suddenly and would likely unleash the powerful force of pan-Korean nationalism.  

Denny Roy is a Senior Fellow at the East-West Center in Honolulu.  He specializes in Asia-Pacific security issues.  His latest book is Return of the Dragon: Rising China and Regional Security (Columbia University Press, 2013).

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Could Future Submarines Act as Underwater Aircraft Carriers?

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After reading Peter Briggs’ excellent posts on why Australia should build its own submarines (here and here), it occurred to me that we may be missing a more important element of the discussion. Recently, I was involved in considering the nature and implications of disruptive or game-changing technologies in warfare. A common theme was the unpredictable interplay of various and sometimes unrelated technologies in creating a capability leap. Often, the technologies driving a leap had existed or been in development for a long time prior to their convergence.

The discourse here in Washington is that we’re on the verge of a tectonic shift in the way military operations are conducted, and that there are important lessons from history that we should heed. Failure to do so risks our platforms becoming prematurely redundant or having to make costly design changes throughout the process.

Major military platforms are getting more expensive and taking longer to develop than ever before. In his article, Peter assumes initial sea trials in 2025 and full replacement of Collins by 2028. To give some perspective on how the world might have changed by then, consider that the kids graduating from college at that point will likely have been born after the release of the first iPhone. Assuming a traditional life cycle of major platforms, the subs will then need to meet Australia’s operational needs until sometime around 2050. In other words, over 100 years after the end of World War II.

Advances in a range of technologies could change the nature of submarine warfare in a number of critical ways. These technologies aren’t yet operational, but neither are they far off and we can be assured that significant resources are being poured into their development.

We’re starting to see the deployment of a range of military capabilities long consigned to science fiction. We can’t, and shouldn’t, define the requirements for our future military capabilities on idle speculation of what we might need in the future. But we should be considering, debating and analyzing the possible operational future environment and its implications for our requirements.

The potential value of the F-35 isn’t the strengths of the plane itself, but the way it networks with other combatants, sharing and coordinating targeting and other data. The design philosophy that underpins it allows for a new air concept that integrates manned and unmanned platforms, leveraging the inherent advantages of each.

Just as new detection technologies threaten submarines’ traditional advantages, developments in unmanned underwater vehicles (UUVs) create new opportunities. Consider, for instance a networked fleet of smaller manned submarines, optimized for stand-off passive intelligence processing, communications and targeting. They could be supplemented by a variety of unmanned UUVs that could safely penetrate deeper into denied areas and act as active intelligence gatherers and weapons platforms.

The manned platform could stay in an operational theater for longer, but at a safer distance from a target while the unmanned systems put themselves in harm’s way. The design philosophy and technical requirements for such a sub would be very different to the current generation. In some wargames I’ve participated in, it has been proposed that future submarines could act as underwater aircraft carriers for drones—not that it’s a new concept, or necessarily what Australia would be looking for.

No one can say exactly how any of a range of technologies could impact the operational requirements of future submarines, and we’re not alone in facing those challenges. If the operational lifecycle of the Collins fell in a different timeframe, we could try to extend its service life and wait to see how warfare evolves in the coming years. But our window for action falls on the precipice of change, burdening us with the need to apply even greater rigour to the process.

As we debate the best location and approach to manufacturing our next-generation submarines, we should be investing equal intellectual resources into considering alternative submarine operational concepts and design philosophies. Otherwise, we risk building a state-of-the-art, homegrown fleet of cutting-edge obsolescence.

John Watts is a senior consultant with Noetic Group, Washington DC, and is currently engaged in work on future warfare for the Office of the Secretary of Defense. This piece first appeared in ASPI’s Strategist blog here.

Image: U.S. Navy Flickr. 

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Beware: Collapsing Oil Prices Could Make Russia More Dangerous

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While Saudi Arabia benefits from a weak oil market, and Iran is coping with it, the collapse in the price of oil, coupled with Western sanctions, could prompt Russia to embark upon a more dangerous course in foreign affairs.

Those were the major conclusions of a panel discussion on the geopolitics of oil prices hosted by the Center for the National Interest in Washington, DC on Tuesday.

Chas Freeman, the former U.S. Ambassador to Saudi Arabia, initiated the discussion by explaining that conspiracy theories about the decline in oil prices are bogus. In his view, Saudi Arabia did not “have anything to do with the [oil] price collapse.” Rather, it was caused by a lethal combination of oversupply due to increases in oil production in places like Iraq, Libya and North America, as well as weakening demand due to a sluggish global economy—particularly in Europe and Asia.

While Saudi Arabia has not pushed prices downward, it also has done nothing to prop them back up. Inactivity has been its approach. This isn’t surprising, given that low oil prices suit Saudi Arabia’s economic interests just fine. Freeman explained that Saudi Aramco’s production costs are reportedly $5 or $6 a barrel, so it can easily weather lower prices.

By contrast, last year, Bloomberg reported that the break-even price for major U.S. shale projects ranged anywhere between $43.01 and $184.21 per barrel. While less dramatic, other oil producers—particularly those who rely on offshore sources—have far-higher production costs.

Thus, while Saudi Arabia can remain extremely profitable at the $45-per-barrel price, many of its competitors (and potential competitors) cannot. Over the long term, this allows Saudi Arabia to increase its market share.

Of course, beyond economics, low oil prices also suit Saudi Arabia’s geopolitical interests, principally by weakening its major adversaries such as Iran and Russia. Suzanne Maloney, an expert on Iran’s economy at the Brookings Institution, confirmed that Tehran is feeling the pinch from lower oil prices. For one thing, she noted that the collapse in oil prices had forced the Rouhani administration to revise down its budget figures, from those based on $72 per barrel to those based on $40 per barrel. Lower oil prices will also inhibit the Iranian administration’s efforts to continue reining in inflation, which has been one of its signature achievements thus far.

Still, the impact of falling oil prices hasn’t been catastrophic for Iran, and Maloney argued that it was unlikely to significantly impact Iran’s foreign-policy behavior, particularly with regards to the nuclear negotiations. Instead, one of the most interesting developments has been how falling oil prices have impacted the domestic debate in Iran about its future. Maloney marveled at how foreign investment was no longer a matter of debate in the formerly quasi-socialist Islamic Republic.

While falling oil prices might not significantly impact Iran’s foreign policy, the same cannot be said for Russia. In fact, Dimitri Simes, the President and CEO of the Center for the National Interest, warned that Russia might feel compelled to adopt destabilizing actions designed to prop up oil prices.

Simes stated that the Russian administration was “profoundly unprepared” for falling oil prices, having based its most recent budget on oil prices remaining above $100 per barrel. He blamed this, at least in part, on a bifurcation in Russian policy under Vladimir Putin. On the one hand, Russia’s economic policy had been based on integrating with the global economy, particularly Europe and the United States. On the other hand, Russia’s foreign policy has been increasingly adventurous, often putting it at odds with the EU and United States. Trying to pursue these two policies simultaneously was “totally unrealistic,” Simes argued, and as a result, Russia is in “a lot of trouble” economically.

While some in the West have cheered Russia’s economic downturn, and chastised Putin for it, Simes noted that he remains widely popular, as many Russians blame Western sanctions, not mismanagement at home, for many of their economic hardships. Furthermore, if the economic situation continues to deteriorate, and the free market fails to offer relief, Russia could use more traditional instruments of Russian power to prop up oil prices, such as “destabilization, covert action and of course military force.”

Freeman agreed, noting that “you can take supply out of the market by sabotage” or by destroying existing supplies. He also said he could imagine Russia and Iran at some point joining forces to artificially prop up the price of oil.

“I hope to God that doesn’t happen,” Freeman said.

Image: Wikicommons.

TopicsEconomics RegionsRussia

Japan Faces Massive Demographic Decline: Could "Womenomics" Help?

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On Oct. 20, 2014, Prime Minister Shinzo Abe accepted the resignation of two women in his Cabinet – Obuchi Yuko, minister of economy, trade and industry, and Matsushima Midori, minister of justice – amid scandal over campaign irregularities and financing. This followed their promotion to the Japanese Cabinet with much fanfare less than two months prior; this was a symbol of Abe’s ‘Womenomics’ policy, an adjustment effort to improve women’s advancement in society and their participation in the workforce. A foundation of this initiative is creating social conditions that make it easier for women to balance work and family. This policy goal not only constitutes a major component of Abe’s ambitious economic strategy, popularly known as ‘Abenomics’, but would also help offset Japan’s demographic crisis. Japan’s future as a major power depends on whether Tokyo can simultaneously incorporate women into the workforce and increase the fertility rate. The answer will be important not only for Japan but for other countries facing similar demographic challenges.

Declining Population and Work Force

A 2012 report by the Japanese National Institute of Population and Social Security Research (PSSR), using medium fertility projections, projects Japan will enter a long period of population decline, dropping from 128 million in 2010 to 86.74 million by 2060. The most pessimistic projection for 2060 predicts a population of 78.56 million.

The Japanese population is also rapidly aging. The 1960s postwar baby-boom led to an expansive population pyramid – a large, young working-age population that propelled Japan’s economic miracle. Today, people age 15-64 (working-age population) still make up the largest portion of the total population in Japan, but this demographic is increasingly pressured from above by the economic burden of the elderly. According to the PSSR 2012 medium-fertility estimates, the working-age population will decrease, falling from approximately 80 million in 2013 to 44.18 million by 2060. This shrinking working population will be expected to care for and financially support an expanding elderly population – a trend that will compound over time. Within 45 years the elderly (65 and over) will comprise nearly 40 percent of the total population, and the young-age population will face an insurmountable economic burden in which 1.3 workers must support each elderly person.

These trends will not only place an acute burden on labor-intensive industries such as healthcare, but the financial stress on families will have negative effects on the broader economy. For example, a decline in population will mean less consumer spending and great pressure on Japan’s GDP growth and wages, undermining Japanese competitiveness. This combination of a weakening economy and declining population will deter foreign investment in Japan, limiting a valuable tool for economic recovery.

Womenomics

Abe posits that Japan can revitalize its economy by encouraging more women to work through a suite of policies aimed at extending economic opportunity. Womenomics is critical for Japan because it seeks to increase the role of women in the economy, but there are many obstacles. First, the participation of Japanese women aged 25-54 is 70.8 percent as of 2013 according to the OECD, ranking 23rd out of 34 OECD countries. Second, there are wide disparities in wages between women and men. Abe admitted that Japanese women earn on average 30.2 percent less than their male counterparts in his article in the Wall Street Journal. Third, marginalization of women extends into the political realm. After the 2014 general election, only 39 out of 475 members of the House of Representatives are women. The Gender Equality Bureau Cabinet Office (GEBCO) report also shows the ratio of new female employees in the central government in 2013 was only 26.8 percent.

Inequality in the public sphere reflects similar inequality in the private sphere; the traditional division of labor remains firmly entrenched at home. According to a 2007 Cabinet Office opinion poll, 60 percent of mothers believed that a wife is responsible for 80-90 percent of child-raising work at home. The same report found that the more husbands participated in domestic duties, the more wives wanted additional children. The Abe Cabinet has set a goal of increasing childcare leave for men to 13 percent by 2020, but this would likely have marginal impact since only 1.72 percent of husbands utilized such services in 2009, according to GEBCO.

One important obstacle to change is the lack of childcare services. According to the Ministry of Health, Labor and Welfare, there are more than 20,000 children on the national waiting list for childcare. It therefore shouldn’t be surprising that only 38 percent of women can maintain their job after their first maternity leave in Japan (GEBCO).

The Abe Cabinet hopes to transform Japanese society to make it easier for women to live, work, and raise children simultaneously. The Womenomics Policy Package outlines six categories of women’s demands that have to be met and suggests solutions for each demand: (1) want to give birth to, raise, and care for children (and the elderly) safely, (2) want to participate actively in the workplace, (3) want to be involved with and/or start businesses in the community, (4) want a healthy and comfortable life, (5) want a safe and secure life, (6) want to be connected with people and information.

Womenomics also seeks to increase the percentage of women in leadership positions to at least 30 percent by 2020. The government set targets to double the number of female managers in national government positions and for women to hold 10 percent of senior manager or higher positions in the private sector by the end of FY2015. It is expected that this will lead to further reforms in the work environment.

The implementation of Womenomics has not been seamless. Numerical targets do not change a patriarchal corporate culture; superficial appointments do not prevent women from being disproportionately criticized when they fail because of the assumption that they are not qualified to be leaders. The resignation of the female Cabinet ministers is the most recent example of the prejudices against women in positions of power. The Abe Cabinet had been criticized for what was perceived to be affirmative action appointments, yet male politicians have a long history of making mistakes, and are provided the opportunity to learn from those experiences and remain or return to power.

Moreover, Womenomics is not the Abe regime’s priority. In December 2014, the Abe Cabinet discarded a bill making it obligatory for companies to employ and promote a certain percentage of female workers to avoid the divisive issue in the general election. Abe will compromise on policies for women if other issues are more important for him.

However, as long as Japanese society holds biases toward women, government intervention is necessary. Japan’s demographic problems can only be addressed by a concerted government effort toward institutional reform, followed by meaningful societal change.

Conclusion

If Prime Minister Abe wants Japan to be a “first tier nation,” he must prevent Japan’s aging society and declining birthrates from suppressing its economic growth. Otherwise, Japan will be forced to decrease expenditures and investments in the military, Official Development Assistance, education, and other vital areas necessary for it to maintain its international relevance. An aging and declining population will slow growth while increasing pressure on the government and working population to pay for the massive costs of elderly care. With the decline of Japan, Asia will lose a vibrant democratic innovator and investor.

Womenomics can ease Japan’s demographic problems and invigorate a sluggish economy. The government must not waver in its efforts to increase female participation in the workforce. As other countries face similar demographic problems, how Japan addresses its problems can serve as a valuable example for the region, and the world.

Tomoko Kiyota is chair of the WSD-Handa virtual working group on “Abe’s demographic policies: lessons for Asia.” This piece is a result of several months of research, writing, and international collaboration undertaken by: Annette Bradford, Rachel Ianacone, Henry Lawton, Tom Le, Seongmin Lee, Naohito Miura, and Daichi Uchimura. For additional information on the group, or for more about the activities of Dr. Haruhisa Handa and the Worldwide Support for Development, contact youngleaders@pacforum.org. This piece first appeared in CSIS: PACNET newsletter here.

Image: Wikicommons. 

TopicsDemography RegionsJapan

China: Getting Ready to Dominate the Indian Ocean?

The Buzz

After a PLA-Navy submarine docked twice in Colombo, Sri Lanka last year, there is anxiety among Indian analysts of a renewed thrust by China for a permanent military presence in the Indian Ocean. New Delhi’s policy and strategic circles are abuzz with rumours of a likely Chinese naval base in the Indian Ocean Region (IOR). Following reports of increased Chinese naval activity off India’s Southern maritime frontiers, New Delhi has even revived the proposal for an Indian Ocean Zone of Peace, in the hope that it would discourage Beijing from adopting a proactive maritime policy in the Indian Ocean.

Chinese maritime forays in the IOR aren’t a new phenomenon. For some time Beijing has been trying to expand its strategic footprint in the Indian Ocean. The increasing frequency of Chinese anti-piracy deployments and naval exercises, as well as growing investments in maritime infrastructure projects have burnished China’s image as a maritime player in the region. Yet, thus far, it seemed unlikely China had plans for establishing naval bases.

The recent spurt in Chinese naval exercises in the Indian Ocean, however, has led to whispers of a more pre-emptive PLA-N strategy. A string of naval deployments – including one with the 20,000-ton amphibious ship, the Chengbaishan, and another involving a nuclear submarine – has provided evidence that Beijing has its sights set on dominating the Indian Ocean. As a consequence, Chinese maritime basing in the Indian Ocean is no longer a strategic contingency to be taken lightly.

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The first, in a set of revealing events, is the recent docking of a Chinese submarine at Colombo. While there was much discussion of the geopolitical implications of the visit, key operational details escaped critical analysis. It is noteworthy, for instance, that the Chinese submarine did not dock at the Sri Lanka Port Authority (SLPA) berths in Colombo – mandated to accommodate military vessels – but at the Colombo South Container Terminal (CSCT), a deep-water facility built, controlled and run by a Chinese company, the China Merchants Holdings (International). The CSCT may be well-suited for submarine dockings, but it is also a “Chinese enclave” within a Sri Lankan administered harbor. The presence of the Chinese submarine at the CSCT constituted a violation of protocol, but Sri Lankan authorities were reluctant to describe it as such. The SLPA chairman’s explanation that the submarine needed the extra-depth at the CSCT seemed implausible, considering that the Ming-class diesel-electric’s limited draft rendered it apt for berthing at any of the available SLPA facilities. Moreover, as commentators pointed out, the submarine visit was preceded by the docking of two other Chinese naval vessels at CSCT that Colombo tried hard to keep out of the media glare. This strengthens Indian suspicions that PLA-N assets are being allowed privileged access to Sri Lankan ports funded by Chinese investments.

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Colombo is not the only Sri Lankan port with an exclusively Chinese facility. China also has a controlling stake at Hambantota port, where according to media reports Sri Lanka has agreed to grant Chinese state-owned companies operating rights to four berths in exchange for an easing of loan conditions. Apparently, Colombo handed over control of the port to China without issuing a commercial tender, a fact that took many in the shipping industry by surprise.

Similarly, in Maldives, the Ihavandhippolhu Integrated Development Project, or iHavan, reportedly rides on huge concessional loans and aid financing from China. The loans, apparently, have been awarded at such a high rate of interest that Male is almost certain to default, unless it is offered some kind of unilateral waiver. Yet, it is exactly what Beijing is expected to do, as part of a now established formula of relaxing loan conditions in exchange for control over maritime projects it helps finance.

This raises troubling questions about the motive behind China’s Maritime Silk Route, an umbrella term referring to maritime infrastructure projects in the Indo-Pacific region. Beijing, denies that the plan is a rebranding exercise for an existing “string of pearls” strategy aimed at encircling India. Still, with an impending $40 billion dollar investment plan, it seems highly unlikely China would have assumed responsibility for the onerous projects without the promise of future strategic gains.

Beijing has been in fire-fighting mode ever since a news report appeared in the Namibian in November 2014 alleging the existence of Chinese plan for naval bases in the Indo-Pacific region and the west coast of Africa. A Chinese government spokesperson claimed the report borrowed liberally from a commentary in a Chinese state-controlled news portal in February 2013 that advised the PLAN to build overseas bases and protect its energy line in the Indian Ocean. There is some truth to this contention.

What is more pertinent, however, is that the original article not only outlined a blueprint for the establishment of 18 Chinese “Overseas Strategic Support Bases” in the IOR, but also recommended three specific categories of such facilities: fueling and material supply bases for peacetime use (Djibouti, Aden, and Salalah); relatively fixed supply bases for warship berthing, fixed-wing reconnaissance aircraft and the naval staff ashore rest (Seychelles); and fully functional centers for replenishment, rest and large warship weapons maintenance (Gwadar in Pakistan). Describing the precise nature and functions of the future bases, the commentary suggested a methodology for acquiring the facilities. Access to fixed supply bases – as being planned in Seychelles – it said, could be gained by signing short-term or medium-term agreements, while the “fully functional centers” in Pakistan and other IOR states needed medium-and long-term MoUs.

It is the possibility of Chinese dual-use bases in the IOR that deserves the most attention. A commercial facility with low-level logistical support capability, a dual-use base is a risk-free way of establishing maritime presence in a region of interest. In 2013, Beijing is said to have expressed an interest in such a facility at Gwadar, thus validating claims that China may be looking for a low-level military presence in the IOR. Modern dual-use maritime facilities aren’t completely benign assets. As a recent US National Defense University report pointed out, a powerful nation like China has the ability to upgrade a commercial port to support military operations in conflict scenarios, and even use it as a cover for construction of secret munitions stockpiles and other port infrastructure. It is possible, therefore, that Beijing might be contemplating agreements that offer it the right to properly militarize dual-use facilities in times of conflict.

A “dual-use” base is also what China appears to be pursuing in Seychelles. In 2011, it was widely reported that Seychelles has offered China maritime basing for its ships deployed to the Gulf of Aden and the West Indian Ocean to combat piracy. While Beijing was quick to deny the existence of such a plan, it did not exclude the possibility of an overseas supply point, fanning fears that it desired a more permanent military presence in the IOR.

China’s pitch for benign security in the Indian Ocean appears to be an attempt to convince Indian Ocean states of the need for Chinese support and security arrangements. It is critical for the PLA-N to have a system of assured logistics, refueling, repair and replenish facilities in the Indian Ocean that would enable sustain operations over a prolonged period. A sustained “maritime presence” in the Indian Ocean Region, however, is all Beijing needs to strategically dominate the region. The ready availability of PLA-N assets for maritime security tasks has the potential to take the regional security initiative away from India. Not only would a Chinese naval presence in the IOR challenge the Indian Navy’s primacy as a net-security provider, it would also erode India’s strategic influence in the region.

A permanent PLA-N presence in the IOR without conventional “naval bases” could be a strategic master-stroke by Beijing, leaving New Delhi all at sea.

Abhijit Singh is a Research Fellow at the Institute for Defence Studies and Analyses (IDSA) at New Delhi and specializes in maritime security affairs. This piece first appeared in CSIS: PACNET newsletter here.

TopicsSecurity RegionsChina

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