Peace Reigns, But Asia Is Stockpiling ArmsAmy Borrus
While most of the world is cutting its military forces, Asia is on an arms-buying spree. Asian countries from tiny Singapore to mammoth China are snapping up the latest in fighter aircraft, submarines, and missile gadgetry from the U.S., Europe, and Russia. In the most eye-popping deal yet, Taiwan recently received Washington's blessing for a $ 6 billion purchase of 150 General Dynamics Corp. F-16 fighters, and soon after ordered $ 160 million worth of U.S. antisubmarine helicopters.
If defense companies are cheering, Asia analysts are not. Some worry that such sales will fuel an arms race that could turn up the heat on a host of smoldering regional disputes. "It's extra tinder," says James C. Clad, senior associate at the Carnegie Endowment for International Peace. "These weapons will dramatically increase a country's ability to throw its weight around if things go bad."
`HYPOCRITICAL.' The Bush Administration faces a tough choice with arms exports. Though the sales are popular with voters and the Pentagon because they preserve jobs and military production lines, they undercut the credibility of American efforts to limit sales elsewhere. "It's hypocritical," charges Andrew J. Pierre, author of a forthcoming book on the global arms trade. In retaliation for the huge F-16 sale to Taiwan, an angry China has decided to boycott an upcoming meeting of the U.S., Britain, France, and Russia on limiting arms sales to the Middle East.
But sales to Asia are likely to soar as the region's fast-growing economies allow its militaries to soup up aging arsenals. Most defense budgets in the region are growing at 5% to 10% over inflation. The buildup is also driven partly by fear that China and perhaps Japan may try to fill the vacuum left by the withdrawal of some U.S. forces.
Once an afterthought, Asia is now prime turf for arms merchants. Already, Singapore, Thailand, and Indonesia want to buy more F-16s, and Malaysia is interested in subs. Along with the U.S., competitors for Asian business include France, Britain, Germany, and Italy. "Exports may spell the difference between survival and being swallowed up, so you'll see hardball over every sale" in Asia, predicts Joel Johnson, a vice-president at the Aerospace Industries Association of America.
Asia's relative calm also makes arms sales less controversial than they would be in, say, the Middle East. Although there are a few wild cards such as Burma and North Korea, intraregional trade is booming and security cooperation is growing. "Hopefully over time, there'll be a network of relations resilient enough so that no power will try to flex its muscle," says Jonathan D. Pollack of Rand Corp.
The biggest potential troublemaker is China, which is talking to Russia about everything from missile-guidance technology to long-range bombers. On a recent visit to Hong Kong, James R. Lilley, the U.S. Assistant Defense Secretary for international security affairs, warned that the Chinese buildup was "a cause for concern for the U.S. and China's neighbors." While the F-16 sale was timed to win votes, U.S. officials say it was also designed to warn Beijing to cool it.
But it's not at all clear that sending arms to Taiwan will check Beijing's buildup. In fact, an increasingly wealthy China is signaling a readiness to spend heavily on upgrading its military no matter what. With more and more weapons flowing into the region, the risk is greater that minor skirmishes could escalate. Washington may some day come to rue its nonchalance about weapons exports to Asia.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.