Asia-Pacific Economic Recovery Speeds Arms Procurement Revival

In a remarkably short time, most Far Eastern countries affected by the 1997-98 currency collapses now appear to have started vigorous recoveries. With a few exceptions, financial stability is beginning to re-emerge, although some significant structural problems in terms of banking finance remain to be resolved. In some areas these are complicated by local political problems, which hopefully may now remain isolated, to prevent a recurrence of the recent economic domino collapse.

Overall, the original rationales for defense re-equipment in the area have remained unchanged, although some of the more ambitious programs and planned procurement time-scales are being scaled-down or extended. Accompanying plans for associated expansion of indigenous defense industries are being similarly stretched, particularly in those countries dependent on International Monetary Fund aid. From the current situation, however, it seems that Asia-Pacific's pre-1997 share of world arms imports of 22% - second only to the Middle East - may remain generally unchanged into the millennium.

Malaysia
Among main Asia-Pacific purchasers, Malaysia has achieved most of its seventh 1996-2000 five-year plan targets, including expanding links between procurement and industrial offsets or counter-trade. Aimed at improved self-reliance rather than self-sufficiency, these featured in the RMAF's $738 million contract for 10 BAe Hawk Mk 108 combat trainers and 18 single-seat Hawk Mk 208 light multi-role fighters, received in 1994-95, and continued with its $600 million 1994 order for 18 MiG-29N/UBNs. Delivered from April 1995, these now include Vympel R-77M (AA-12 "Adder") medium-range active radar-guided AAMs, among other weapons, which introduced new levels of technology in the Asia-Pacific area. Malaysia has also been negotiating purchase of another 14-18 "Fulcrums", which could be upgraded MiG-29SMT/UBTs, although Sukhoi Su-30Ks or Su-35s are being evaluated as possible alternatives.

A 1993 $1.6 billion RMAF order for eight two-seat MDC F/A-18D Hornet multi-role fighters, plus 51 AIM-7M Sparrow and 110 AIM-9S Sidewinder AAMs, 50 AGM-56 Maverick ASMs and 25 AGM-86 Harpoon AShMs, also incorporated a $250 million 10-year industrial offset plan. Buyers are also being sought for the RMAF's 23 remaining withdrawn MDC A-4PTMs, to supplement its restricted budget. Among later RMAF requirements, 1995 orders for six Airtech CN-235M-220 twin-turboprop tactical transports of up to 32 sought as DHC-4 Caribou replacements, were placed in a $100 million joint industrial aerospace co-operation program with Indonesia.

In return, Indonesia was to buy 20 Malaysian-built SME/Datwyler MD3-160 AeroTiga piston-engined basic trainers and other commodities, but although all six of the RMAF's CN-235s were built by April 1998, the first three were delivered only in August. Three more followed in November, program completion, including 20 similar SME trainers to replace RMAF BAe Bulldogs, having been delayed by joint economic problems. These resulted in the RMAF receiving only 12 of its 20 AeroTigas, at Alor Setar air base, while Indonesia obtained six MD3-160s, from its similar original requirement.
Initial contracts were reported from the Langkawi air show in late 1999 with Malaysia's Airod group to upgrade the RMAF's 14 Lockheed C-130H Hercules. Two will receive a 15 ft fuselage stretch to -30 standards, with Lockheed Martin assistance, plus options on two more, to supplement the RMAF's sole new-build C-130H-30. Three others will undergo GATM avionics upgrades, for completion from January 2001. Airod had previously modified two RMAF C-130H-MP maritime patrol aircraft as air-refueling tankers, and two further conversions are planned.

Other Malaysian procurement has been limited to only two Sikorsky S-70A Black Hawk helicopters, four special-mission Raytheon Beech King Air B200T MPAs, and, more recently, six LHTEC-powered GKN Westland Super Lynx 300 frigate-based ASW helicopters costing $165 million. Planned procurement of eight Denel Rooivalk attack helicopters has been deferred pending funding availability, but 40 Ulan Ude-built Mil Mi-17s costing $200 million are being proposed, in conjunction with technical support from SME Aviation, to replace 31 RMAF Sikorsky S-61A transport helicopters.

Indonesia

Massive currency devaluations experienced by Indonesia in the 1997-98 Asian-Pacific economic crisis have been compounded by political instability, and human rights infringement allegations, particularly in East Timor. Resultant EU and US arms embargoes on Indonesia led to suspension by the UK government last September of BAe's export licenses for deliveries of Hawk Mk 209 single-seat light combat aircraft to the Indonesian Air Force (TNI-AU). Expiry of the embargo in mid-January was expected to release the remaining seven Hawk 209s from a second batch of 16, costing $265 million, following the first 16 in 1996-97.

Indonesia had earlier acquired 20 two-seat Hawk Mk 53 advanced- and eight Mk 109 lead-in fighter trainers from 1980 onwards, some reportedly operated in the East Timor area. Orders had also been placed with Russia in August 1997 for 12 Sukhoi Su-30 multi-role fighters, and eight Mil Mi-17-1V helicopters costing around $650 million. With standard retractable air-refueling probes, the Indonesian Su-30 order included eight unique single-seat versions similar to the Su-27SK, plus four two-seaters. A Komsomolsk (KnAAPO)-built prototype single-seat Su-30KI has been extensively test-flown, but production has been deferred, together with Mi-17 procurement, pending funding availability.

Related major IMF-imposed cuts in IPTN funding also appear to have delayed planned Indonesian procurement of five CN.235MPA maritime patrol aircraft, from total requirements for 24. IPTN production of 16 NAS 332 Super Pumas for the TNI-AU has been similarly stretched, and its upgrade of eight air force Northrop F-5Es and one F-5F from SABCA kits, after recent delivery of a prototype of each from Belgium, may also be slowed. Delivery of two ex-US Navy two-seat TA-4J Skyhawks combat trainers took place in September after refurbishment by New Zealand's Safe Air company.

Thailand

Halving of Thailand's 1998 military spending from 168 billion baht (now $4.5 billion) to 80 billion baht since its currency collapse, resulted in cancellation of the Royal Thai Air Force's $392 million order for eight Boeing/MDC F/A-18C/D Hornets, costing $74.5 million in initial deposits. In early 1999, the Thai government allocated around $130 million from $317.5 million US repayments to buy 18 surplus USAF GD Block 15 F-16A/Bs, plus two spare airframes, for the RTAF. After refurbishment, these will supplement and provide attrition replacements for the 36 similar aircraft bought by Thailand from mid-1988, with additional weapons and support equipment.

The RTAF plans to spend about $60 million from US repayments on further low-cost upgrades of about half of its 35 or so Northrop F-5E/Fs by Israel's Elbit Systems, although no contract has yet been finalized. As in Elbit's F-5S upgrade for Singapore, that for the RTAF will include new digital avionics and twin multifunction color cockpit displays, plus a HUD and Rafael Python 4 advanced AAMs, but retaining the original Emerson fire-control radar to minimize costs.

For similar reasons, RTAF proposals to acquire 50 surplus Luftwaffe Dassault/Dornier Alpha Jet twin-turbofan advanced trainers/light ground-attack aircraft, stored in Germany since withdrawal in July 1997, were later halved. Although low-houred, and nominally priced at $27,000 each, the German Alpha Jets require major overhauls, increasing their total cost to around $70-80 million. A maximum of Bt1.275 billion ($34.14 million) approved for RTAF Alpha Jet procurement, mainly through barter, will therefore involve only 25 aircraft, including five for spares, plus training and support equipment. After refurbishment by Dornier Luftfahrt in Munich, these will re-equip two RTAF light attack units currently operating about 25 Rockwell OV-10 Broncos by 2004.

Recent equipment supplies to the Thai forces have included two Airtech CN-235-220S twin-turboprop transports from IPTN production, for the paramilitary Royal Thai Agricultural Aviation Division (KASET), supplementing five earlier CN.235s deliveries. Still unfulfilled are requirements for more transports, tankers, AEW&C aircraft, 38 light utility transport aircraft and 36 transport helicopters for the Thai army. Late 1998 plans to exchange three of eight Thai Army Boeing CH-47C/D Chinooks for three or four Bell UH-1Hs from Singapore seem to have been abandoned.

Vietnam
Russian aid has been sought through a further military co-operation agreement signed in Moscow late last year, for continued expansion of the Vietnamese Air Force. Exclusively equipped with Russian aircraft, the VNAF is also organized on VVS lines, and is planning to treble its current strength of 12 Sukhoi Su-27SK/UB advanced air superiority fighters. Through Russia's Rosvoorouzhenye state arms export agency, Sukhoi had been discussing orders for a second batch of 12 Su-27SK/UBKs with Vietnam, but late last year, VNAF interest had reportedly switched to a similar number of Su-30K two-seat multi-role combat aircraft. Equipped for air-refueling, these would probably be built by the Irkutsk Aviation Industrial Association (IAPO), for a fly-away unit cost of $30-35 million.

These will follow earlier deliveries of seven KnAAPO-built Su-27SKs and five Su-27UBKs from IAPO, which have recently been operating alongside some 27 VNAF Sukhoi Su-22M-4 "Fitter K" strike-fighters and Su-22UM-3K "Fitter G" combat trainers at Nha Trang. VNAF negotiations have also been reported with VPK MAPO and Israeli companies concerning possible upgrades of the 150 or so Vietnamese MiG-21bis/UM fighters in current Vietnamese service. Most further procurement is expected to be from CIS sources.

Philippines

The Philippines' five-year Ps50 billion (then $1.9 billion) Armed Forces Modernization Program (AFMP), launched in December 1996 to start an already halved but still ambitious 15-year Ps164.5 billion ($4.07 billion) defense re-equipment plan, has been severely curtailed since the area's economic crisis. Currently on hold is the Philippine air force's main initial requirement for up to 24 new or surplus long-range multirole fighters, for which the Dassault Mirage 2000-5, F-16, F/A-18C/D, IAI Kfir 2000, Gripen and MiG-29 had been evaluated, to expand PhilAF combat aircraft strength.

This was exactly doubled from late 1997 acquisition of four surplus South Korean Northrop F-5As and a single two-seat F-5B for a nominal sum, and 12-16 more are being sought from Canada, Saudi Arabia, Taiwan, and elsewhere. US funding of some $25 million has reportedly also been offered to the Philippines for its acquisition of New Zealand's 19 upgraded multi-role MDC A-4K/TA-4K Skyhawks, to expedite RNZAF F-16 procurement.

Badly-needed support aircraft offers have included six ex-RAF C-130Ks from Lockheed Martin for nominal costs, to supplement 10 or so PhilAF C-130B/E/Hs for tanker/transport roles. Also unfulfilled are requirements for ground radars, six maritime patrol aircraft, for which Alenia's new twin-turboprop ATR42MP Sea Surveyor and Bombardier's Dash 8 Triton are being evaluated, plus 12 medium-lift, 12 SAR and nine ship-based patrol/ASuW helicopters. Replacements are also needed for some 60 Bell UH-1H utility helicopters. Under Project Layang, Philippine Aerospace Development and PhilAF's R&D Center is converting 18 piston-engined SF.260 basic trainers with 350 shp Allison 250-B17D turboprops.

Cambodia

UN control of Cambodia's armed forces in 1993 was followed by their scaling-down and reorganization, with aid and equipment mainly from Chinese, North Korean and Russian sources. Upgrades by Israel Aircraft Industries from its 1996 $15 million contract of nine Cambodian Air Force MiG-21bis fighters and two MiG-21UM two-seat combat trainers from 19 on establishment, plus return of four completed "Fishbeds", have recently been suspended because of payment problems.

In addition to avionics and structural upgrades of the MiG-21s, IAI's contract included the supply of six refurbished Aero L-39 jet-trainers, delivered in 1996. Cambodia is believed to have paid to receive its first two upgraded prototype MiG-21s, including a "Fishbed B" trainer, in January 1997, and Israel is negotiating for settlement of the balance. In mid-1998, agreement was also reported with Russia's Kazan company to refurbish Cambodia's four Mil Mi-8 transport helicopters for operation alongside seven more recently-acquired Mi-17s. Two Mil Mi-26s were also reportedly ordered, but little funding is available for further procurement.

Brunei

Even with the world's highest per capita income from its oil resources, Brunei has not been able to ignore prolonged cost cuts in this commodity, reflected in its failure to date to finalize its long-expressed commitment for four BAe Hawk 100 lead-in fighter-trainers and six single-seat Hawk 200 light strike/interceptors, with options on six more. These are due to follow four Pilatus PC-7 Mk 2 turboprop basic trainers delivered in 1997.

Other recent procurement has included 1995 orders for three IPTN-built CN-235MPA maritime patrol aircraft, with Boeing Argo missions systems avionics, and a CN-235M tactical transport, plus 1998 contracts for three more. Texas Instruments AN/APS-134 radar, FLIR Systems AN/AAQ-21, Marconi Sky Guardian ESM and Cossor 3500 IFF, were specified for Brunei's MPAs. Four Sikorsky UH-60L Black Hawk transport helicopters ordered in the same year, have also been delivered. In 1998, Brunei became the 23rd customer for Matra BAeD's Mistral V-MANPADS/MPC short-range air defense missile.

Japan

Main Japanese Air Self-Defense Force (JASDF) procurement currently involves joint development and production of the F-16C/D-derived Mitsubishi F-2 (FS-X) ground-support fighter with Lockheed Martin, to replace 59 Mitsubishi F-1s. Flight-testing of four XF-2A/B prototypes, with locally-assembled Ishikawakima-Harima Heavy Industries 29,000lb F110-GE-129 turbofans and a bigger co-cured one-piece graphite-epoxy composite wing, started in 1996. Development is now about a year late, wing and fin cracks having followed vibration when carrying four Mitsubishi ASM-2 anti-ship missiles. Production is planned, with 40% US participation, of 130 F-2s, with imminent initial deliveries to the JASDF's 3rd Air Wing at Misawa, continuing through 2010.

Planned JDA procurement in the FY2000 military budget of 4.935 trillion yen ($46.8 billion), with overall program target totals in parentheses includes: JASDF, nine F-2s (130); nine Kawasaki T-4 advanced jet-trainers (212); the first two of the JASDF's 50-aircraft BT-X basic trainer requirement, to be selected between the Beech T-34-derived turboprop-converted Fuji T-3kai (T-7) and the Marubeni-backed Pilatus PC-7 Mk II; two Raytheon Beechjet T-400 TC-X crew trainers (11); two Raytheon Hawker 800SM U-125A HS-X SAR aircraft (27); one Mitsubishi/Boeing CH-47J Chinook MLH (19); and two Mitsubishi/Sikorsky UH-60J Black Hawk SAR helicopters (46). Upgrades are also funded of two of JASDF's 13 Northrop Grumman E-2C Group 0 Hawkeye AEW&C aircraft.

FY2000 Maritime Self-Defense Force (JMSDF) requests comprise seven SH-60J Seahawk ASW helicopters, plus upgrades of nine earlier deliveries (c100); three Raytheon/Beech TC-90 King Air 90 trainers (38); and one Kawasaki/MDH OH-6DA light helicopter (17). Funding was again excluded for the proposed Shin Maywa US-1Akai US-X flying-boat upgrade with R-R/Allison AE2100J engines and Dowty R414 six-blade composite propellers, FBW controls, pressurized upper hull, Thomson-CSF Ocean Master nose-radar and EFIS.

Ground Self-Defense Force (JGSDF) procurement will include four Kawasaki OH-1 scout helicopters (150-200); seven Fuji/Bell UH-1J utility helicopters (60+); two CH-47J Chinook MLH (52); three UH-60JA utility helicopters (c70); and one Raytheon/Beech LR-2 (King Air 350) liaison/recce aircraft (20).

Following recent JASDF acceptance of four GE CF6-80C2-engined Boeing 767-27C AWACS aircraft with Northrop Grumman AN/APY-2 dorsal radar from $1.61 billion contracts, the B-767 is also competing with Lockheed Martin's KC-130J for a long-standing 80 billion yen ($758 million) requirement for at least four tanker/transport aircraft, to acquire an air-refueling capability.

A linked JASDF requirement is its planned C-X replacement of 28 Kawasaki C-1 twin-turbofan tactical transports by a longer-range (up to 2,700 nm) type. Kawasaki is currently evaluating an indigenous C-1 successor with a 25 tonne payload and four 35,000 lb thrust turbofans, against foreign production military transports, for 2005-06 service.

Funding requirements in the next five-year Mid-Term Defense Build-Up Plan, from April 1, 2001, include upgrading the JASDF's 200 plus Boeing/Mitsubishi F-15J/DJ air superiority fighters; acquisition of up to 100 new AH-X attack helicopters to replace 84 Fuji/Bell AH-1S Cobras from 2006; supplementing its Raytheon Patriot Advanced Capability-2 ABM systems with PAC-3 missiles; replacing its GDC Pomona SM-2MR/SM-3 Standard fleet air defense missiles; participating in the US Theater Ballistic Missile Defense research project; and launching four military reconnaissance satellites in 2002.

Republic of Korea

After a remarkable economic recovery, FY2000 RoK defense budget requests have increased to W14.439 trillion ($12.69 billion), including W5.34 trillion for procurement, as part of a W26.7 trillion four-year military modernization program. Main procurement proposals include RoKAF requests for another 20 license-built Lockheed Martin KF-16C/Ds. These supplement previous RoKAF orders for 110 F100-PW-220/229-powered Block 32/52 F-16Cs and 50 F-16D-32/52s, delivered between 1986-2000 through the Korean Fighter Program.

After two years' delays through economic problems, the F-X requirement for replacement of RoKAF's 18 MDC RF-4Cs, 115 F-4D/Es and 195 Northrop F-5E/Fs by an initial 40-60 new twin-turbofan fighters is receiving priority. Service entry now planned from 2004-05 requires an early choice between such contenders as the Boeing F-15E(K), Dassault Rafale, Eurofighter Typhoon, and Sukhoi Su-35/37. Deferred RoK requirements include four AEW&C aircraft costing $3 billion, aerial tankers, 20 Lockheed Martin C-130J transports, 30-40 new attack helicopters from a relaunched AH-X program to replace 60 Bell AH-1S, and follow 138 KAL-built Sikorsky UH-60Ps, and surveillance UAVs. Delivery starts in April of eight twin-turbofan Hawker 800XPs modified by Raytheon and Lockheed Martin for RoKAF ELINT/SIGINT and radar surveillance roles.

Lockheed Martin and KIA Heavy Industries (formerly Samsung Aerospace), plus Daewoo and Hyundai, are involved through the Korean Aerospace Industries Corporation (KAIC) in the RoKAF's F404-GE-402-engined KTX-2A/B next-generation supersonic advanced-trainer/lead-in fighter program. Costing $2 billion from its 1997 start, KTX-2 development has been delayed by economic problems. Its configuration has now been finalized, however, and first flight is planned for June 2002. LMTAS is developing KTX-2 avionics, fly-by-wire flight-control system and wings, while Messier-Dowty is supplying the landing-gear. In addition to RoKAF requirements for 97 KTX-2s, replacing 30 USAF Northrop T-38As leased from early 1999, up to 600-800 more could be exported. RoKAF students will graduate to the KTX-2 from 85 indigenous PT6A-62A-powered Daewoo KT-1 turboprop tandem trainers now being built, plus 20 armed KO-X forward air control versions.

SAM-X and M-SAM requirements emerged late last year for 48 launchers to re-equip two RoK Nike Hercules air defense battalions and 110 I-Hawk launchers with new 100/60 km range SAM/ABM systems, for 2003 deployment. A four-target simultaneous engagement capability is also sought from short-listed SAM/ABM contenders, which include 14 Raytheon/Lockheed Martin Patriot PAC-3 fire units costing $4.2 billion, EUROSAM Aster-based Land system, and Russia's Antei S-300V (SA-12 "Gladiator").

For shorter-range air defense, K-SAM development of Thomson-CSF's Crotale NG was started jointly in 1989 by Daewoo, as prime contractor, with Samsung Electronics contributing the fire control system, and Lucky Goldstar Precision the missile. In January, Thomson-CSF confirmed a 50% shareholding in Samsung Electronics' military business, plus a $230 million contract for Crotale NG surveillance and fire-control radars for the K-SAM Chonma program. Other recent RoK missile procurement includes 100 AGM-142C/D Popeye ASMs costing $1 million each.

Taiwan

While the US formally recognized Beijing government authority in 1979 over a unified China which included offshore Taiwan, it also guaranteed Taiwanese security, and to provide sufficient weapons to maintain an adequate self-defense capability. Despite certain ambiguities in US relations with Taiwan, accompanying Clinton administration policies to achieve a strategic partnership with China, Washington is currently considering Taiwanese equipment requests to achieve airborne-early-warning, anti-air, anti-submarine and amphibious defense capabilities. House support was also voted in February by a large majority to expand US military assistance to Taiwan, which is already targeted by about 100 short-range ballistic missiles, estimated to increase up to 650 by 2005.

Taiwanese AEW capabilities are being enhanced by a $400 million mid-1999 FMS contract for two Northrop Grumman E-2T Hawkeye AWACS aircraft. These will supplement four earlier E-2Ts, as refurbished ex-USN E-2Bs, but with later Lockheed Martin AN/APS-145 dorsal radar, instead of the original General Electric APS-138 system. Upgrades to similar standards are planned for the earlier E-2Ts, to support the Republic of China Air Force's (RoCAF) 120 multirole LANTIRN-equipped Block 20 F-16A MLUs and 30 two-seat F-16B-20s costing $6 billion, delivered from 1996-99.
In the same period, these were reinforced by 48 air defense Mirage 2000-5EIs and 12 two-seat 2000-DI combat trainers, ordered from France in November 1992. As the first M2000-5 export customer, Taiwan's $5 billion contract included 960 medium-range active radar-homing MICA AAMs, ordered even before France; 400 MATRA Magic 2 close-combat AAMs; and associated support equipment. Foreign fighter availability then resulted in the RoCAF's own Indigenous Defense Fighter program for the medium-range Chung Shan Sky Sword III AAM-armed AIDC Ching-Kuo being curtailed at 130 aircraft, instead of 250 originally planned. AIDC is also working on a prototype Northrop F-5E upgrade to Bristol/Eidetics Tiger 2000 standards, to modernize 40 RoCAF aircraft to similar standards, leaving 62 F-5E/Fs available for disposal.

NT$300 billion ($9.45 billion) has been allocated to Taiwan's Chung Shan Sky Bow SAM program to develop an ABM capability, and supplement three Raytheon Patriot T PAC-2 SAM firing units, plus US offers for six more. US clearance is also being sought by Taiwan to acquire PAC-3 ABMs and Aegis early-warning radar, with tentative agreement already achieved to supply Raytheon AIM-120 AMRAAM medium-range active radar-guided AAMs.

Bell Helicopter Textron in Texas is producing another 13 OH-58D Kiowa Warrior armed scout helicopters ordered in 1997 from a $21.7 million Taiwanese army FMS contract. Delivery is scheduled by July 2001, to supplement 26 RoC Army Aviation (RoCAA) OH-58Ds, 30 Bell TH-67 Creek training helicopters, and 42 Bell AH-1W Super Cobra attack helicopters received from 1993, plus 17 RoCAF Sikorsky S-70Cs. From NT340 billion ($10.7 billion) FY2000 military budget plans, nine Boeing CH-47SD Chinook medium-lift helicopters were ordered in January from a $300 million FMS contract, to supplement three RoCAA Boeing 234 MLHs from 2001. About 25 new utility helicopters are additionally sought from a total requirement for 98, plus 18 new tactical transports.

By John Fricker