Thursday, September 17, 2009

Thailand Grapples With Procurement Following Coup



Thailand Grapples With Procurement Following Coup


Since the September military coup that ousted Thai Prime Minister Thaksin Shinawatra, the interim government has faced a variety of restrictions from Washington and internal wrangling that makes procurement decisions difficult until democracy is restored in December elections.

Thailand’s military budget had suffered since the 1997 Asian economic crisis. But the military-controlled parliament in December passed a 2007 defense budget of $34 billion, four times the 2006 figure of $8.6 billion. Though details are unclear, most of the increase appears to be allotted for salary hikes, recruitment and the possible procurement of small arms and other equipment to deal with a growing Muslim insurgency in the south. Since the coup, bombings and assassinations have jumped in that area.

Major procurement plans are on hold until after the elections, tentatively planned after the king’s 80th birthday in December. Local analysts say the military will not approve any major foreign arms procurement until after the election.

Before the coup, the military was preparing to purchase 33 Black Hawk helicopters to replace aging Bell UH-1H and Bell 212 helicopters. The Army also is looking at the Stryker Light Armored Vehicle to replace its aging inventory of more than 300 M113 and 100 V-150 Commando armored personnel carriers (APCs). The Army will receive 76 Chinese-built NORINCO WMZ-55B1 six-wheel-drive APCs in barter deals involving dried logan fruit.

The Army has been criticized for the April 2006 decision to buy the French-built Caesar truck-mounted 155mm howitzer. It ordered only six systems from the former GIAT Industries, now Nexter, and sources said the Army may have to cancel the order. A local defense analyst said the Army simply could not use six; the minimum number should have been 24.

“What is the Army going to do with only six? You need that many just for training.” he said.

The small order reflects old procurement procedures that many say need to be modernized and streamlined.

“Part of their problem is they use annual budgets and have limited short-term procurement programs. The GIAT sale is a good example. The U.S. would like to help them modernize and add transparency to their procurement system,” said the U.S. official.

A Thai military analyst complained that the military procurement system is wracked by corruption and ineptitude.

“We have a lot of procurement irregularities. The U.S. is controlled by anti-corruption regulations, but not other countries. Corruption is a big issue here,” the analyst said. “It is systematic and sophisticated. There is an implicit understanding among military officials that they have to take care of their futures. Retirement benefits will not do it.”

Archaic procurement procedures and corruption go a long way in explaining why the military has such an odd collection of equipment from different nations. For example, the Navy is made up of U.S.- and Chinese-built frigates and the Army has a combination of Chinese and U.S. APCs and tanks, including the M60, M48, T-69 and T-59 tanks. The mix makes interoperability difficult, sources here said.

The Air Force also is debating the procurement of a squadron of fighters to replace its aging F-5 fighters. Currently, the Air Force has three squadrons of F-16s procured under the Peace Naresuan program, begun in the late 1980s under the U.S. Foreign Military Sales program.

Sources here said possible competitive fighters include the U.S. F-16 and F/A-18, the Russian Su-30, French Mirage and Saab Gripen. There is a remote chance China would allow Bangkok to barter food for fighters, with a possibility of J-10s being offered.

“Barter trade favored the Russians and Chinese, but increases in the defense budget will allow for more options,” said a U.S. government source here.

Thailand has exchanged fruit for firearms in the past.

In 2005, Thailand made a deal with China for 96 NORINCO WMZ-55B1 six-wheel-drive APCs at $300,000 apiece in a deal involving 100,000 tons of dried logan fruit. That same year, Thailand and Russia discussed exchanging $25 million in rice for four Mi-17 transport helicopters.

Currently, the Navy has no major ship procurement plans, but upgrades and new helicopters are high on the agenda. In April, the U.S. Defense Security Cooperation Agency announced the possible sale of six Sikorsky MH-60S helicopters to the Navy for an estimated $246 million. The helicopters will be used for search and rescue, maritime defense and utility lift missions.

In May, the Navy announced the procurement of three Thales Nederland MIRADOR electro-optical weapon control systems for its coastal patrol craft.