Thursday, October 8, 2009

Asian Naval Programs Confident Despite Economy

Defense News


Asian Naval Programs Confident Despite Economy

By Wendell Minnick

SINGAPORE - Confidence in Asian naval and maritime defense markets appears undaunted by the economic crisis savaging defense budgets around the world.

At a preliminary news conference May 11 for the International Maritime Defense Exhibition (IMDEX), scheduled for May 12-14 here, Bob Nugent, AMI's vice president for advisory services, and IMDEX consultant, said "confidence with the Asian market" remains "buoyant" despite the global economic downturn.

"Looking at the global market by regions, the Asia-Pacific area is strong, and we expect it to move past NATO countries to become the second largest source of future naval spending," he said.

Two trends stand out in the Asia-Pacific region, Nugent said: the types of fleets regional navies are building, and that naval spending in the region continues to steadily grow.

Many Asian navies are advancing toward a "third-generation status," which has evolved from patrol and missile craft operating in local waters to a more "well-rounded regional" naval force that includes subsurface, surface and air missions.

Also, naval spending is moving with "evolutionary progress," Nugent said, rather than a "pattern of stop-and-start building programs aimed only at specific conflict scenarios.

"In other words, we see a marathon of sustained naval development that has paralleled economic growth in the region."

Nugent said AMI forecasts spending on new ship construction in the Asian market over the next five years would "roughly equal" U.S. spending, around "$60 billion in 2008 dollars."

China, Japan and South Korea would lead the region over the next two years, with India "stepping up investment" and expected to move into the "top three" over the next five years. Singapore and Australia have substantial naval programs planned, and Malaysia, Indonesia and Thailand have "consistent investments in naval capabilities over the same period."

During a separate Lockheed Martin presentation, the issues of Sea Lines of Communication (SLOC) and energy security were identified as the drivers of Asian naval procurements.

Lockheed's Dan Howard, senior adviser, Asia-Pacific, said projected economic growth was driving the quest for energy, and because Asian dependence on crude oil from the Middle East is expected to exceed 75 percent by 2010, Asian navies have no choice but to beef up security along the SLOC, he said.

"Over 15 million barrels a day are shipped through the Strait of Malacca," said Howard. There are "numerous maritime 'chokepoints' " that could be threatened by piracy, "disruptive rerouting and civil strife along energy routes."

Howard also identified the emergence of a proliferation of anti-ship missiles in Asia.

"Some countries are building high-speed, low-observable ships armed with anti-ship missiles capable of shutting down SLOCs," he said.

Howard pointed to advances being made in China with the development of an anti-ship ballistic missile that could target aircraft carriers and an expanding inventory of anti-ship cruise missiles.

"China could choke SLOCs to death," he said.

One sign Asia is seriously considering the missile threat is the increasing number of Aegis ballistic missile defense systems. Korea currently has three Aegis-equipped ships and has the "potential for three additional ships."

Japan has six commissioned, with a "potential" that Tokyo will consider an additional two Aegis-equipped ships in the future.