V27N4 - Defence Collaboration: Policy Implications for Singapore

Defence Collaboration: Policy Implications for Singapore
by LTC Vijay Kumar

The international defence industry throughout the world has been increasingly characterised by defence collaboration on a bilateral and multi-lateral basis. From engaging in defence collaboration with reluctance, the necessity of co-operation is no longer questioned. This is nowhere more evident than in the United Kingdom (UK) and Germany. Both governments have always explored collaborative possibilities prior to deciding to go on its own. During the last decade, the US Congress and Department of Defence have shown a growing interest towards international participation in weapon systems development. This signals more than anything else that the future of national defence industries will be towards international collaboration. The main drivers for defence collaboration have been economic, political and military considerations. Defence collaboration between states is not a smooth process. Participants have to overcome numerous hurdles. This includes minimising inefficiencies arising from duplication, consensus on work share and the technical specifications. This notwithstanding, the benefits outweigh the costs and with the increasing trend towards globalisation, reverses in this trend are not expected.

The Singapore defence industry is not immune to this wave towards defence collaboration. The smallness of the industry should provide added impetus towards this direction to leverage on the latest technologies and gain access to a much broader market for the products. Hence, it is not if but how to leverage maximum benefits from defence collaboration to maintain the technological edge of the Singapore Armed Forces (SAF) and to provide another dimension in our strive towards creating an external economic wing. This paper is an attempt to apprise and recommend policies conducive for defence collaboration.

Defence Collaboration-Models

Detlev Petry, based on his experience of armament co-operation in Germany has identified four models of co-operation.¹ These include:

The above models are a reflection of the complexity in defence collaboration. For the purpose of this paper defence co-operation or collaboration is defined as mostly government-to-government sponsored industrial co-operation with pre-determined work-share agreement.⁵ The success of defence collaboration hinges on many factors or pre-conditions. These include the ability to harmonise the tactical and technical requirements, the presence of a joint research and development programme to provide a technological understanding and a distinctive and enduring will for co-operation.

Drivers for Collaboration

The impetus for defence collaboration is provided by the combination of economic, military and political factors. The end of the Cold War was an especially defining moment for the defence industries in the west. Declining defence budgets and redundant capacities provided only one choice for the major defence industries; collaborate or be eliminated. This has led to rational utilisation of the scarce financial resources through the consolidation of technical capabilities, sharing of developmental expenses and the larger production costs.⁶

The focus of the Joint Strike Programme (JSF) in the US is also driven by the question of affordability. As a result, barriers are being eliminated to facilitate sharing the burden of the high costs of research and development efforts and to permit US industry and government to acquire much needed intellectual property rights.⁷ An added benefit from the American point of view is that it opens markets for the US industry while at the same time snapping away from competing foreign industries, especially from Europe.⁸ Hence, the economic benefits of defence collaboration include cost reduction in research and development,⁹ and lower production costs due to increased volume.

The other driver of defence collaboration is the military and the evolving doctrine given the varied demands on the armed forces. The objective is the establishment and improvement in interoperability and increased standardisation of military equipment. This is particularly significant in view of the increasing military integration in the form of multi-national units.¹⁰ The need for coalition warfare with the former Soviet Union provided the impetus in the past. Today, the increasing prominence of non-traditional security issues continues to provide the impetus. The most prominent example is the requirement for joint action in the former Yugoslavia as part of the United Nations effort to support humanitarian operations.¹¹

Politics is an important factor for defence collaboration in Europe. Unified by the Soviet threat for over four decades, joint response became critical to Western Europe. Such common experience has made Western Europe a security community.¹² Not identifying each other as potential aggressors has provided the motivation and has made arms collaboration much easier than would otherwise be possible. Such co-operation in the very sensitive military sphere is an important political contribution to the further development of transparency and confidence building between states.

Whilst politics is and will continue to be a major impetus for arms collaboration in Western Europe, the opposite is prevalent in the Asia-Pacific. Differences within ASEAN over the Spratly Islands,¹³ has allowed China to absolve herself for failing to finalise the code and adopt a bilateral approach to the dispute.¹⁴ Furthermore, the deterioration in relations following the Asian Economic Crisis was ample proof of how the surface was deceptively brittle.¹⁵ Professor Ron Matthews has noted the unpredictability of MalaysiaSingapore relations such as the recent tensions over the rail link between the two countries and Kuala Lumpur's failure to participate in the recent Five-Power Defence Agreement military exercise.¹⁶ Given such unresolved bilateral and multilateral disputes, politics within ASEAN will continue to be a major impediment to defence collaboration though the economic and military logic for collaboration is clearly evident. Figure 1 illustrates the main drivers for defence collaboration:

Challenges to Defence Collaboration

With increasing globalisation, economics will continue to be the main driver for defence collaboration. However, very often the full benefits could not be realised due to a number of factors. The 'square root' formula says that the development costs rise in rough proportion to the square root of the number of participants.¹⁷ For example in the Eurofighter programme, duplication of production facilities based on the 'just share' principle and 'unnatural' division of work on the software modules and the head-up display resulted in subsequent integration problems and less savings. Absolute research and development costs are also higher though relative costs are lower.¹⁸ Resulting from this, the UK National Audit Office Report on the Eurofighter recommended that projects should emphasise the need for value for money rather than have work share as an overriding factor.¹⁹ The setting up of OCCAR (Organisme Conjoint de Co-operation en matiere d'Armement, Organisation for Joint Armaments Cupertino) is also an initiative to facilitate armaments co-operation between participating states with emphasis on value for money.²⁰

In addition, the laborious process undertaken to sort agreement between the partners very often results in compromises. For example, JSF will necessarily be a compromise aircraft, born out of different and in some cases contrasting requirements. Under such circumstances, the resulting extensive trade-off exercises (under the dominating issue of affordability) routinely produce either an overall mediocre multi-role combat aircraft, or a single-role aircraft with reduced capabilities to perform other roles.²¹ Such an approach is perfectly acceptable and indeed logical from the US perspective.²² However, for the other participants the economics associated with acquiring a single multi-role type of aircraft may now not be possible. In addition, the smaller partners will continue to remain hostage to the requirements of the US and her armed services.

Many of the challenges could be minimised if countries were able to identify military requirements far enough into the future so that requirements and time schedules can be harmonised sufficiently to permit co-operative research, development, testing and production. Unless this is done, defence collaboration efforts will continue to be hampered by such impediments.

Defence Industry in Singapore

Singapore's defence industry is a strategic element supporting the SAF.²³ Often referred to as the sixth component of the total defence concept,²⁴ it has three main roles: to meet the needs of the SAF by enhancing technological capabilities, provide quality products and services at competitive prices to the SAF and contribute to the economy through the External Wing and profits. These roles have driven the local defence industry to develop defence equipment both in collaboration with foreign defence establishments and on its own.²⁵ This has broadened and deepened the technological capability of the defence industry. More importantly, this has well positioned the local defence industry to leverage on the benefits of pursuing a strategy of defence collaboration to enhance the Defence Industrial Base. In fact, Singapore has understood the need for defence collaboration much earlier to leverage on the advance technologies and other advantages afforded through defence collaboration. In line with the above objectives, the strategy of the local defence industries in defence collaboration is as follows:

In the assessment of this paper, the main areas for defence collaboration for Singapore are in the areas of research and development, joint production and finally joint upgrade and maintenance. It is pertinent to emphasise that these three areas are not mutually exclusive but are mutually reinforcing.

Owing to Singapore's limited resources, technology must be exploited in providing a force multiplier effect. We have to be more proactive and innovative in exploiting technology to have technological capabilities to maintain, acquire, upgrade and develop systems for the SAF. However, given a limited budget of S$2.66b (1.8% of GDP) for research and development in 2000, there is a need to enter into several long-term co-operative arrangements on defence research and development with the defence establishments of other countries to reduce costs, share risks and significantly shorten the time taken to realise advanced technologies.²⁶ The focus of such efforts should be on a conscious mix of selected world-class abilities combined with a broad capability as opposed to an incoherent scatter of abilities.

Presently, Singapore has extensive defence collaboration with South Africa. With South Africa, a memorandum of understanding has been signed on Defence Cupertino in Technology.²⁷ Whilst these should be continued, the local industry should aim to develop collaboration in research and development on technologies that will have a greater bearing on the SAF defence strategy and doctrine. These include:

JSF is easily one of the largest international projects, with many technological spin-offs for future use. Presently, a minor partner with a contribution of US$3m, we should aim to be a substantial partner in research and development in order to benefit from the possible technology transfer. This together with the experience in upgrading the F-5 and Skyhawks will position us to offer similar upgrades to other countries using F-16s in this region on an individual or a collaborative basis.

Singapore's policy on collaboration in research and development should therefore take a long-term view encompassing the SAF's long-term needs and future requirements and those which allow us to collaborate in joint production and which offer joint upgrades in the future. Foreign investment policy should also encourage collaboration in civilian industries that have spin-offs for the defence industry.

The other important area for defence collaboration is in
joint production. Given the experience and success in defence
related endeavours such as the Bionix,²⁸ the local defence industry is well positioned to enter into collaborative ventures to meet
the requirements of the SAF and also to develop export
potential. The policy with respect to joint production should be
as follows:

Given the high costs of advance defence equipment and the opportunity costs of high defence expenditure, upgrading existing weapons systems to extend the life cycle is proving to be an attractive option throughout the armed forces in the world. In fact, it is no secret that even in the developed states, all major weapons systems undergo at least one major mid-life upgrade. The experience gained in upgrading our F-5³³ and skyhawks and our participation in the JSF development position us well to undertake collaborative ventures to upgrade and install subsystems aboard the F-16 fighters in the region. We can pursue such collaborative ventures with Israel, another partner of the JSF development. Alternatively, we can jointly negotiate the upgrade for the F-16s in this region with the US. Such co-operation is bound to result in benefits in terms of price, transfer of technology and other advantages due to the greater bargaining power.

We should also pursue collaboration in maintenance such as between Logistics Instrumentation Services and Technology (Thomson-CSF) and Keppel Engineering to provide logistics and maintenance support. Our strategic location allows us to exploit this. This together with the experience gained in locally developing the LSTs and Patrol Vessels allows us to collaborate in providing maintenance facilities. Similarly, we should continue to gain a greater share in maintenance of aircraft, including commercial aircraft. Possibilities of collaborative ventures in these areas will not only enhance market share but also, provide spin-offs.

There are now indicators signalling a move towards defence collaboration in this region.³⁴ Deputy Prime Minister and Defence Minister of Singapore,
Dr Tony Tan has stated that "there is much scope for bilateral and multi-lateral co-operation in the region" and "co-operation among the defence establishments remains relatively under-developed".³⁵ Though not accepted due to various reasons,³⁶ the prevalence of non-traditional security concerns and the experience from the East Timor crisis would be the motivations towards this direction. The International Maritime Bureau on Piracy has also identified Indonesia as the most piracy prone area in the world. Such non-traditional security concerns call for a multi-lateral approach, coalition and joint approaches to tackle the problems. So politics may become a driver of defence collaboration in this region, amidst at a much slower rate.

The economic benefits arising out of defence collaboration include savings on foreign exchange, greater employment and developing the Defence Industrial Base through technology transfers. The militaries in the region can also benefit from customising the weapons systems to their specific requirements. One possible area is the replacement of the AMX-13 light tanks. Given our close and
jungle terrain, light tanks will better meet our requirements as opposed to heavy tanks. With the international market dominated by heavy tanks, a collaborative venture within ASEAN may prove to be promising.

The other area for regional collaboration efforts is in meeting the naval and maritime police requirements for offshore patrol vessels and coastal patrol craft. Given the prevalence of piracy and illegal immigrants, the ability to patrol and control the seas surrounding becomes very crucial. Our experience in locally developing the LSTs³⁷ and patrol vessels³⁸ show the local defence industries' ability to design, build, integrate and deliver sophisticated warships and combat systems for the SAF. Alternatively, such requirements can be jointly procured from major defence companies to give us greater bargaining power in terms of price, transfer of technology and other advantages. In this regard, Rolls Royce, a British gas-turbine manufacturer, is seeking partnerships with local shipbuilders to establish warship design and production capability here.³⁹ The company is offering its propulsion-systems expertise to shipbuilders, such as Singapore Technologies Engineering, to set up their own warship industry. This is the recognition of our appetite to design and build warships locally, and even export them and the opportunities must not be missed.⁴⁰ Such collaborative ventures if possible must be done with regional partners to reap greater economic benefits.

The international trend is clearly towards defence collaboration driven by political, economic and military factors. States ignore this trend given impetus by the increasing phenomenon of globalisation only at their own peril. Hence, it is beyond doubt that Asia will replicate this trend of international defence collaboration.

In the case of the Singapore Defence Industry, complete self-reliance may not be possible. This should not stop us from pursuing self-reliance on vital and basic weapons systems such as ammunition and basic weapons (SAR 21, Ultimax 100 and artillery systems). However, collaboration as a strategy in major weapons systems and high-tech areas must be continued to minimise costs in research and development, technology transfer to maintain the edge and to increase market share. Taking a long-term view in these areas will allow us to master the technology to meet out specific needs and subsequently incorporate them in future production and development of our weapons systems.

Whilst we continue to look for possibilities in the west for defence collaboration, the opportunities available within the region should not be ignored. However, the many challenges to defence collaboration within the region will make the road ahead toward armaments co-operation not an easy, but a necessary one, especially in the longer term.

Endnotes

1 Detlev Petry, "Armament Co-operation: the BWB's Experience", Military Technology, November 2000. page 17-21.

2 This model is efficient with the single partner completely responsible for the implementation of the programme based on a government-to-government agreement. This model is increasingly rare as national interests seldom permit one state to be given the pilot status.

3 It is not normally the objective to jointly develop a common product in the partners' armed forces in the short-term. This, however may be the long-term goal of the co-operation.

4 Another example is the Production and Logistics Agency, tasked with managing the development, procurement and logistics of European fighter aircraft.

5 In recent years however, private defence enterprises have engaged in defence collaborative ventures across boundaries sometimes without government support.

8 Ibid, page 28. The UK is a collaborative Development Partner, the Netherlands, Denmark and Norway are Associate Partners, Russia, French and British firms are participating in the "Fee for Service" scheme and Singapore is a sales customer with access to technical information.

11 With the proposal to set up the European Armed Forces, there is an increasing need to have commonalties not only in terms of weapons systems for interoperability but, common doctrine and training approaches and for logistics efficiencies.

12 Refers to a group of states that no longer expect to use force against each other. Originally coined by Karl Deutsch, the test of a security community is not the absence of conflict per se, but an ability to resolve conflicts without resort to force, as well as the absence of significant preparations for war (such as arms race) among a group of states. Security Communities can be "amalgamated" in which the sovereignty of the members is superseded by a supranational authority, or "pluralistic" in which states retain their sovereignty, but no longer view war as a legitimate way of dealing with one another.

13 The Code of Conduct was not signed during the ASEAN summit in Singapore because of differences. Hanoi wanted to include the Paracels to which Malaysia objected as this is between China and Vietnam.

14 The security concern involving six of the ASEAN member states is the Spratlys Islands dispute that is the major flashpoint in Southeast Asia although the likelihood of outright war remains distant. The inherent characteristics of the dispute, in particular the manner in which claims have been asserted through the use of force by the various claimants point to a potentially destabilising situation. There have been several instances of creeping encroachments & fortification of outposts by ASEAN states on each other's claims over the Spratlys Islands. Further, the lack of agreed institutional framework for the peaceful settlement of the dispute resulted in Intra-ASEAN misunderstandings and a lack of consensus. Michael Leifer has noted that ASEAN have long been unable to assume a common position on China and this has actually allowed China to adopt a divide and rule policy by advocating bilateral talks.

15 Prime Minister Mahathir Mohamad warned Singapore in a rally at Johore Bahru, "We don't have a large military to attack others. We have tried to be good neighbours. But don't take us for granted." There were also unconfirmed intelligence sources indicating that Malaysia contemplated armed action against Singapore. The Straits Times, 6 August 1998 and Amitav Acharya, "Globalisation, Interdependence and Regional Stability"(unpublished).

16 Ron Matthews, "Singapore Buys Longbows and Grows Its Defence Industry", Asia-Pacific Defence Reporter, Dec 1999.

17 Global costs for a four-partner project will be about twice those of a single-nation project. Hence, the formula implies a net saving to each nation of about half the costs of a single nation development.

18 This is due to additional administrative procedures, language barriers and compromises resulting in delays.

19 "UK report highlights problems facing collaborative projects", Jane's Defence Weekly, May 1998.

20 Ezio Bonsignore, "OCCAR+ WEAO = EAA", Military Technology, March 1997, page 88. The aim of OCCAR includes achieving better cost effectiveness through rationalising management and procurement procedures, improving the competitiveness of the European industrial and technological defence base and discarding any pretension of obtaining "just return" over each and every co-operation programme to replace it with an equitable return to be achieved over several programmes along the years.

21 James Elliot, "JSF for Everybody", Military Technology, March 1998. page 28. The JSF is assessed to have the same manoeuvrability as the F-16, top speed of 1.4-1.6 mach (slower than the mach 2 of the F-22), slower sustain rate and operations weapons load is also low. Hence, it is a strike fighter and not an air-superiority aircraft. This implies that an escort is needed for protection. Whilst add-ons in the future could not be ruled out, this could be due to compromises made to reduce costs and to meet a wider market.

22 All the services plan to use the JSF primarily for ground attack and only secondarily for air combat missions; the JSF is, thus, conceived in view of an overall combat environment, whereby air superiority will be provided by the F-22 and the F/A-18E. In addition, the JSF is also intended to take full advantage of US advances in the field of C3I and data handling, including for instance relying extensively on mission data provided by external sources.

23 The mission of the SAF is to deter attacks against the national territory and if deterrence fails to secure a swift and decisive victory. To fulfil this role, it is crucial that the SAF maintains the technological edge to function as an effective force and overcome the constraints of her small geographical size, defence budgets and human resources. As technology evolves over time and finds new applications in the military, the SAF must constantly keep abreast of these changes. We must explore and adapt such technologies for use in our order of battle, where they are relevant and cost-effective. In this manner, the SAF can stay ahead of changes in the modern battlefield and fulfil its mission.

24 The other components of total defence are political, economic, social, psychological and military.

25 These include the Bionix Infantry Fighting Vehicle (IFV), the endurance class of Landing Ship Tanks (LST), the Offshore Patrol Vessels (OPV) and the FH 88/2000 155mm Artillery.

26 Collaboration will result in the birth of new technology within a relatively shorter time than would be the case if we were to be build up their own from scratch.

27 "Singapore signs Military Cupertino Agreement With South Africa", Pioneer, January 1998.

28 Christopher F Foss, "Singapore Now Armed with Bionix", Jane's Defence Weekly, August 1999.

29 The foreign components in the IFV includes Boeing M242 Bushmaster, General Electric HMPT 500-3EC automatic transmission, and Detroit Diesel 6V92TA engine.

30 We should pursue as a minor partner in developing and producing sub-systems such as radar, flight controls and head-up display units.

31 The SAF is looking into the possibility of using a pilotless aircraft for long-range naval surveillance. Defence researchers here have just completed a study on an unmanned aerial vehicle (UAV) - an airborne radar and communications station. It took 30 aeronautical and electronic engineers - from the Defence Science and Technology Agency, DSO National Laboratories and Singapore Technologies Aerospace - three years to finish the project.

31 Chan Kay Min, Navy may use unmanned radar planes, 11 May 01, The Straits Times.

32 Indeed, in some specific cases their superior marketing leverage is openly acknowledged as the key reason for British companies being invited to join a given programme.

33 "Local Defence Industry Makes Presence Felt at Asian Aerospace 98", Pioneer, April 1998, page 7.

34 The former Prime Minister of Singapore, Mr. Lee Kuan Yew has suggested greater military Cupertino and multilateral exercises within ASEAN as far back as September 1982. Dr K.U. Menon, "An ASEAN defence community: real or imagined?" Asia-Pacific Reporter, April 1991.

35 "Interview with Deputy Prime Minister and Defence Minister Dr Tony Tan", Asian Defence Diplomacy, Vol. 7 No. 2 February 2000.

36 This was not accepted due to different threat perceptions and fear of inviting counter reactions from others. For example the Indonesian defence minister Edi Sudrajat rejected ASEAN peacekeeping force citing difference in military doctrine

38 "Four more Patrol Vessels become operational", Pioneer, April 1998, page 7.

1. Acharya Amitav, "Globalisation, Interdependence and Regional stability"(unpublished).

2. Chan Kay Min, "Navy May Use Unmanned Radar Planes", 11 May 01, The Straits Times.

3. Chan Kay Min, "Battle for RSAF Jet Order Hots Up", 9 May 01, The Straits Times.

5. Foss Christopher F, "Singapore Now Armed with Bionix", Jane's Defence Weekly, August 1999.

6. Petry Detlev, "Armament Co-operation: The BWB's Experience", Military Technology, November 2000.

8. Hooton E.R., "British Defence Exports: Results and Prospects", Military Technology, April 1998.

10. Dr Menon K.U., "An ASEAN Defence Community: Real or Imagined?" Asia-Pacific Reporter, April 1991.

11. Matthew Ron, "Singapore buys Longbows and Grows Its Defence Industry", Asia-Pacific Defence Reporter, Dec 1999.

12. Rodan Steve, "Israel Warned of Dangers in Low R&D funding", Jane's Defence Weekly, December 2000.

14. "UK Report Highlights Problems Facing Collaborative Projects", Jane's Defence Weekly,

16. "Singapore Signs Military Cupertino Agreement With South Africa", SAF Pioneer, January 1998.

17. US Congress, Office of Technology Assessment, "Holding the Edge: Maintaining the Defence Technology Base," OTA-ISC-420. Washington D.C.: US Government Printing Office, April 1989.

18. "Interview with Deputy Prime Minister and Defence Minister Dr Tony Tan", Asian Defence Diplomacy, Vol. 7 No. 2 February 2000.

21. "Local Defence Industry Makes Presence Felt At Asian Aerospace 98", SAF Pioneer, April 1998.

LTC T Vijayakumar is currently a Deputy Director in the Defence Policy Group. A Guards officer by vocation, he was previously a CO of a Guards unit and the Dy Comd of the Infantry Training Centre. He graduated with a Bachelor of Arts from NUS in 1985 and obtained an MSc (Strategic Studies) from NTU-IDSS in 2001. LTC Vijayakumar attended the Command and Staff Course at SCSC in 1995.