Archive from July, 2012

China’s military build-up: a cause for concern?

It’s not hard to find examples of concerns about China’s military build-up. But how much should we actually worry about it? In my view, not as much as many commentators assume. It’s true that, at home, the Communist Party and its apparatus continue to be in charge of this huge state and fiercely determined to nip any signs of organised dissent or opposition in the bud, if necessary by force. It is also the case that even if there were—unimaginably—some kind of breakdown in the Party and governmental apparatus, no-one has any idea of what might follow.

And yet the social volatilities unleashed by Mao half a century ago continue to bubble under the surface. Every day there are reportedly hundreds of protests or riots against thuggish local Party authorities, which are often put down by force. The Bo Xilai affair is only one example of uncertainty, disarray and fierce competition within the Chinese leadership in the run-up to this autumn’s changes at the very top of the CCP. Obviously the military cannot remain unaffected.

One reason for China to keep and expand large security and military forces is the misguided nationalist sense that China has for too long been put upon by greedy or careless foreign countries. It is time to assert China’s general power and prestige. (Television recently showed a clip of President Hu Jintao meeting with UN Secretary-General Ban-ki moon. President Hu stood still in the middle of the carpet in the centre of the room waiting for Ban-ki moon to sidle obsequiously up to him. Clearly neither man had forgotten the behaviour appropriate for a Korean tribute-bearer being received by the emperor.) Read more

Another reason for creating stronger and more capable forces is to make China less vulnerable in a world where it lacks reliable allies but has major powers harbouring distrust or hostility towards it. Its military might also serves to overawe domestic dissent, not just in Tibet or Xinjiang but elsewhere.

Nor is it surprising that China should put special effort into modernising its air force and navy. These forces may be growing and improving, but size is not everything. China has had no navy of any consequence for the last six hundred years. It only began to grow and modernise around 1990 and it takes much longer than 20 years to build a truly effective navy with inbred traditions, habits of cooperation, and effective command and control systems. Computers do not replace long experience of human interaction, not least between captains and crews. Having an aircraft carrier, or even two, is not the same as having an effective fleet air arm. Similar points can be made about the air force, in spite of new developments of drones and space-related devices.

The future is always unpredictable. But it seems safe to say that for the time being any Chinese admiral or air force general who allowed—let alone encouraged—his force to ‘mix it’ with the US would need to have his head examined. It’s hardly surprising that China is also spending heavily on various asymmetric and other capabilities.

Not only that, but in operational and administrative terms, there is no such thing as a ‘Chinese Navy’. There are substantially separate South Sea Fleet, East Sea Fleet and North Sea Fleet forces and each has its own coastal defence and marine forces. There are many other organisations involved in maritime affairs. It is, of course, true that there are a Central Military Commission, a Party Politburo and especially a Politburo Standing Committee that governs everything. However, its members, especially at a time of serious domestic political turmoil, are overwhelmingly concerned with home affairs. Obviously, political competition at the centre also involves being seen to stand up for China’s ‘rights’ vis-a-vis foreigners, not least territorial ones. Beyond that, though, top leaders jostling for position have other things to worry seriously about than a few ‘foreign’ fishing boats around the Spratly islands or even foreign naval exercises in disputed areas of the Sea of Japan. Especially if, as now, so many people, and especially journalists, in Southeast Asia and Australia seem to be (from Beijing’s point of view, helpfully) terrified at the mere sight of a couple of Chinese patrol boats.

Much more worrying is China’s skill at cyber hacking and stealing industrial and security-related technologies. But even there, exploiting the technologies requires not just the technological and industrial infrastructure but a highly capable workforce. Whether, as yet, China has such a workforce (as distinct from small groups of seriously excellent scientists) is a much more important question than whether or when they might acquire a third aircraft carrier.

Harry Gelber is emeritus professor at the School of Government, University of Tasmania.

To shun or to embrace? Australia–US relations and China’s rise (part I)

There’s a conundrum facing the writers of the Defence White Paper 2013. On one hand, Australia’s geography places it at the southern end of East Asia and its economy places it in a strong trading relationship with the North East Asian economies, particularly China. These factors have seen Australia become increasingly linked to the region. On the other hand, Australia’s cultural predisposition and security ties are Western orientated, particularly to the United States. The question to be asked, therefore, is: are Australia’s national interests best served by pressing into the United States or by pulling away to accommodate China’s rise? This two-part post seeks to address this question.

Australia has been living for almost seventy years under the Pax Americana—that is, the rules based order that the United States sponsored after World War II. The United States sponsored the IMF, World Bank, United Nations and a global order from which many have benefitted immensely.

There is also a strong predisposition in Australia towards the United States. The very idea of ‘America’ has always been attractive to many Australians ever since the Great White Fleet visited in 1907. The idea of a liberal, democratic, free-market and rules-based order is what the United States has seemed to epitomise. America is a remarkable country and it is one that is easy to criticise, and it is often in the breach of the rules that we consider its actions. Americans themselves are very critical of their failings and readily point them out to each other and to the world. But it is hard to imagine any country, with all its failings, having a more positive influence on world order than the United States. Read more

The United States has its faults, but it is a country that Australia looks to, particularly for its military and intelligence ties. Richelson and Ball’s book The Ties That Bind describes the significance of the bilateral intelligence links, focusing particularly on the Joint Defence Facilities at Pine Gap. The title is an evocative description of a significant reality. The ties between Australia and the United States are not to be dismissed casually—they are extensive, broad, deep and longstanding. So Australians should proceed carefully when thinking about changing the direction of the ship of state in terms of defence alliance strategy.

That’s not to say that the way ahead is unambiguously positive; some worry about the future of American power. For example, there’s undoubtedly a concern about America’s economic growth trajectory. But growth is never just a simple straight line progression. Looking back at the United States in 1932 for instance, we saw a depressed economy, with bread lines, soup kitchens and widespread unemployment. America in 1945 was a country transformed. In 1979, America was apparently beaten by the Iranians and underwent a crisis of confidence, to the point where the President gave a dramatically downbeat speech on the subject. Only a few years later, the Berlin Wall came down and the United States led a dramatic liberation of Kuwait. In other words, discounting the dynamism of the United States would be foolhardy.

There are some enduring geostrategic features about the United States that are worth reflecting on. It sits astride the Atlantic and the Pacific oceans, giving it an incredible advantage in terms of trade with Europe and with Asia. It has access to the Panama Canal, the Mississippi River and the associated canal network that enables trade via the sea right into the heartland of North America and right up into the great lakes. It has a population that is dynamic and growing. It has an economy which has had a big slump but which has enacted significant banking reforms and is still growing, unlike large portions of Europe. It is remarkably vibrant. It is going through a very difficult time at the moment but it is a country that is not to be dismissed lightly.

On balance, however, most would agree that Australia should not be so close to the United States as to lead American policymakers to believe that Australia is an unquestioning follower. But the notion that Australia should distance itself from America because American power is waning should not be accepted unquestioningly, as there are significant pointers to America’s enduring significance to Asia-Pacific security concerns. This is perhaps something for Defence White Paper writers to consider.

Another might be a concern aired by some that by sticking too closely to the United States, Australia may unduly aggravate China and foster undue American bravado—an issue explored in my next piece.

John Blaxland is a senior fellow at the Strategic and Defence Studies Centre at the Australian National University.

Singapore and the US: not quite allies

Singapore and the United States are linked not only by important economic relations, but also by a burgeoning defence relationship. Most recently in June 2012 the US announced that it would deploy as many as four littoral combat ships to the city-state from 2013, as part of the Pentagon’s much-publicised ‘rebalance to the Asia-Pacific’.

Their security links date back to the late 1960s, when Singapore actively supported Washington’s war effort in Vietnam. While this continuity, and the closeness and depth of their defence links today, might give the impression that Singapore is a US ally, the city-state’s government has nevertheless pointedly eschewed that status, preferring the strategic autonomy deriving from a less formal—if still intense—defence nexus. Nevertheless, the relationship could pose dilemmas for Singapore.

Singapore’s support for the US’ regional security role and military presence originated in the appreciation of Singapore’s elite, led by Prime Minister Lee Kuan Yew, Foreign Minister S. Rajaratnam and Defence Minister Goh Keng Swee, that the interests of their small island state, sandwiched between much larger and potentially aggressive neighbours, as well as apparently endangered by communist North Vietnam and China, would be best served by preventing the regional dominance of any power. As Lee Kuan Yew said in 1966, it was vital for Singapore to have ‘overwhelming power on its side’. Singapore has built up its own armed forces primarily to prevent Indonesia and Malaysia from dominating its immediate locale; but at the grand regional level, Singapore’s small size and relatively limited diplomatic influence and military capacity have forced it to base its balance-of-power strategy on borrowing political and military strength from extra-regional powers, principally the US. Read more

The communist victories in Indochina in 1975 and Vietnam’s subjugation of Cambodia in 1978 reinforced Singapore’s view of the US as a vital external influence on Southeast Asian security. Despite frictions over trade relations, human rights and the supply of military equipment, the foundations were established during the 1980s for increasingly close bilateral security relations—a relationship that stepped up again when American forces displaced from the Philippines were given greater access to Singaporean facilities.

But this history doesn’t imply that Singapore would support any future US strategy aimed at containing China. A hardening strategic confrontation between the US and China might divide East Asian states into antagonistic camps according to their attitude towards Beijing, placing Singapore in an uncomfortable position. Despite its clearly Western-inclined positions on many international issues, for domestic political reasons it is extremely unlikely that Singapore could ever take the side of the US in a future crisis or conflict with China. Singapore’s population is 78% ethnic Chinese and includes several hundred thousand recent immigrants from the mainland. Particularly since the profit motive replaced communism as the guiding ideology of the People’s Republic, most Singaporean politicians, officials, business people and opinion-formers would find it difficult to conceive of China as a threat. At the same time, it is also important for Singapore to display a degree of sensitivity towards its immediate neighbours. While the city-state has over the years repeatedly made clear its resolution not to be intimidated by either Malaysia or Indonesia, it has no wish to unnecessarily provoke nationalist or Muslim sentiment in either country.

In 2003 Singapore reportedly turned down a US offer of Major Non-NATO Ally status (an offer that was accepted by the Philippines and Thailand). However, in October 2003 Singapore Prime Minister Goh Chok Tong and President George W. Bush announced the intention to conclude a bilateral Strategic Framework Agreement for a Closer Cooperation Partnership in Defence and Security (SFA). It wasn’t signed until July 2005, hinting at the complexity of intervening negotiations. The agreement’s details remain secret, but it’s known to include a Defence Cooperation Agreement (DCA) which provides for new areas of collaboration and reaffirms the importance of defence-technological collaboration and sharing between Singapore and the US. In more visible terms, the SFA also includes an extension of the earlier agreement covering access for US ships and aircraft to facilities in Singapore.

Since the SFA was signed, bilateral defence collaboration has further intensified, and Singaporean military units have deployed to Afghanistan as part of the US-led coalition forces there, and naval vessels to the Gulf of Aden on counterpiracy duties.

Stronger bilateral defence relations will benefit Singapore’s security in many ways. But it could sometimes pose dilemmas for the city-state. What if the US wanted to use Changi naval base to resupply a carrier battle group during a crisis with China over Taiwan? Or if the USN despatched littoral combat ships from Singapore to support the Philippines in a new stand-off with China? Scenarios such as these would require extreme adroitness on the part of Singapore’s political leadership and diplomats to ensure that the expanded security partnership with the US would not incur the obligations and costs that only an ally would usually be expected to bear.

Tim Huxley is executive director of the International Institute for Strategic Studies (Asia).

What are we to make of the new Defence Capability Plan?

Having announced its intention to publish a new Defence White Paper in the first half of 2013, the government has now taken the curious step of issuing a new Defence Capability Plan (DCP). That is, a new schedule for the approval of defence acquisition projects over the next four years. What’s curious is that a new DCP is normally the outcome of a Defence White Paper, rather than a precursor.

What’s more, given the short time since the substantial cuts to the defence spending in the May budget, the new DCP is at best a quick and dirty shoehorning of existing projects into the much-reduced funding envelope that’s available over the next four years. Moreover, how can the government be developing a new Defence White Paper but already know what capabilities it wants to pursue over pretty much the entire life of the document?

Logically, there are three possibilities; either the new DCP is worthless, the next White Paper is pointless, or both. Let’s hope that it’s the first of those options. The worst outcome would be a White Paper that ex facto justified the hastily cobbled together DCP.

In the meantime we have a new DCP to pore over. I’ll leave it to others to divine the implied shifts in strategy which the projects that have been included and excluded might imply—I’m not sure that strategy has much to do with Australia’s capability planning at the best of times. Instead, here’s my statistical analysis of the planned throughput of projects.

Under the two-pass process introduced back in 2003, defence projects are considered (at least) twice by the government; so-called ‘first pass’ and ‘second pass’ approval. At first pass the priority for the capability is confirmed, along with the range of options to be considered; at second pass an option is selected and given final approval. In the latest DCP, 25 of 111 projects are listed as having a combined or simultaneous first and second pass approval.

Because the DCP provides only multi-year bands for when project approvals are scheduled, it’s necessary to analyse the schedule using a statistical approach. Fortunately, with so many projects that gives a reasonable average result, so it’s possible to calculate the number of approvals required each year to deliver the plan.

The graph below (click to enlarge) shows the average number of projects planned and achieved for second pass approval since 2004—that is, the number of projects that have been green-lighted to commence. Two things are apparent. First, there have been continuing delays to the program; the actual number of projects approved in previous years has consistently been below the number planned. This matters because it means that the defence force will have to wait longer than planned for the equipment it presumably needs, and often means that ageing equipment has to soldier on longer than planned. Second, the number of approvals planned between 2013 and 2015 substantially exceeds recently achieved rates of approval.

Let’s now look at how first pass approvals have been going. As shown below (click to enlarge), the picture is even less encouraging. On past experience, there is little chance of the envisaged rate of approvals being achieved. (There are no planned figures are available for 2004-05 and 2005-06 because the first-pass milestone was introduced after the 2004 DCP was published.)

However, in putting together the graphs above, combined approvals have been counted as both a first- and second-pass approval. It may be that there is less work required when a combined approval occurs, meaning that the task ahead is less difficult than it might first appear. But whatever solace we take from that point must be tempered by the knowledge that there is a White Paper due in 2012–13 and an election in 2013–14, and past experience shows that such events seriously delay the approval of projects.

So where does that leave us? It will be interesting to compare the first post-White Paper DCP with the one just released. Unless there are significant differences between the two documents, the White Paper will have been an irrelevant waste of time—akin to the cheap magician’s trick of telling you the number you first thought of. At the very least, let’s hope that the new schedule of project approvals is more realistically aligned with past experience than what’s just been released.

Mark Thomson is senior analyst for defence economics at ASPI.

Killing the source: Uruzgan and The Liaison Office

The first step to victory is always working out the vital ground. Occupy that and you force the enemy to come to you. You’ve already achieved dominance and are halfway on the path to victory.

Unfortunately, when the battlefield is being fought for hearts and minds, the terrain becomes highly complex. It’s difficult to work out exactly which ‘ground’ is commanding, and what features are irrelevant. That’s why intelligence is so important. Without it, the commander can’t know how to direct their forces or where to fight.

This is particularly the case in situations such as in Uruzgan. Australian forces involved in reconstruction have been deployed here since 2006, but the social dynamics are shifting all the time. This is a prime instance of a battlefield where deciding where the human contours lie is a highly complex task.

Perhaps the best (although by no means the only) instance of this is the tribal nature of society. Like everyone, before I first travelled to the country I’d been aware of the difference between the Hazara and Pashtun people. What brought the distinction home to me, however, was a map pasted onto a wall at The Liaison Office in Kabul. A mass of coloured pins indicated the real diversity of inhabitants within the province. Read more

I learnt, for example, that the rivalry between the Achakzai (most populous), Popalzai (most influential), Barakzai and Babozai (all Pashtu sub-tribes) was paralysing reconstruction efforts. Many locals increasingly came to see the ISAF deployment as a just another opportunity to lever themselves into positions of power and personal wealth.

When I returned to Uruzgan in late 2011 this conflict exploded. Barakzai leader Daoud Khan was assassinated by one of his bodyguards. Although his father, Rozi Khan, had been accidently killed late one night in a confused engagement with the SAS, Daoud had been working cooperatively with Australian forces. His relations grasped weapons and threatened to retaliate against the person they believed was behind his killing—Matiullah Khan. Everyone in the province knew of Matiullah’s supposedly insatiable ambition cloaked in a demeanour of modest service. There were persistent claims he was creaming massive sums of aid money into his pockets through graft and bribes, only to re-distribute this to the poor, thus enhancing his personal prestige and position.

Over the course of an afternoon the local Afghan National Army Brigade Commander managed, by sheer dint of his own personality, to prevent open fighting breaking out in the streets of the provincial capital, Tarin Kowt. But these tensions still seethe—they remain lying just beneath the surface.

The crucial element of any counterinsurgency strategy is intelligence. Fortunately, after six years in Uruzgan, Australian forces have developed a considerable capacity in this regard. Nevertheless, no matter how sophisticated military resources actually are, military intelligence can’t be on top of everything. There will be some things assets won’t be able to reveal, simply because someone along the chain will be suspicious of the end user. But there will also be a plethora of vital information that won’t be collected simply because it may not appear relevant.

Unfortunately, Afghanistan is largely an information vacuum. The most elementary and vital nuggets of knowledge aren’t available without relying on external, non-military specialists. The Liaison Office provided this information, first for the Dutch, then for AusAID, the lead Australian agency in the province. The contract was worth a piddly $7 million over three years. This provided hundreds of educated and informed Afghan staff who shared our objectives and considerable goodwill. The service was invaluable.

Incredibly, AusAID’s now made a unilateral decision to cancel the contract. It’s decided it can do without knowing what’s going on, even though it will spend $250 million in the country next year. It’s a surprising move. Sir Humphrey might even say it’s ‘courageous’.

Nic Stuart is a columnist with the Canberra Times. A longer version of this piece appeared in the print edition of the Canberra Times and is reproduced here

Defence and expectation management

There has already been some debate about the insurance analogy on this blog. I personally like the theme as it makes it easy to explain Defence funding to those not familiar with what our defence forces actually do.

There was a time when almost every family in the land knew someone who was in the Defence forces, either past or present. Anecdotally, that doesn’t seem to be the case anymore. All they see are mainstream media headlines that Defence costs a bucketload, can’t handle money very well and stuff keeps breaking/is delivered late/doesn’t work properly. And oh, look—another review.

There is no rational, informed public debate outside the community that has an interest in the field. This can be the same for many fields though. Do you know the difference between AMA and Medicare scheduled fees for services? Why have many Masters programs at universities dropped from 12 unit points to 10? If you’re in the field that cares, you know. If it doesn’t directly affect your life, you don’t tend to know.

How defence is funded matters insomuch to the average person as it relates to opportunity cost in their lives; how many university places/hospital beds/roads built could that money have been used for. This is not to say that the average voter doesn’t care about defence but there is a lack of understanding about the political and economic nature of white papers in the wider community. Read more

What the public sees of Defence work is truly a mixed bag. Working against the Taliban in Afghanistan: over it. Working in Afghanistan for counter terrorism: sure. Support to Australians after natural disasters in floods in Queensland and fires in Victoria: send them faster!

According to the Lowy Institute Poll 2012 on Public Opinion and Foreign Policy, two-thirds of Australians (65%) now oppose Australian military involvement, with opposition increasing with age—from 58% opposition among 18 to 29 year olds to 74% among those 60 years and older. Women are also more likely to oppose Australian military involvement than men (69% compared with 60%).

However, the issue may be more about perceptions. Asked if they are ‘in favour or against Australian Special Forces staying on in Afghanistan to work alongside US Special Forces in more limited counter-terrorism operations’ after major combat operations are scheduled to end in 2014, most Australians (55%) are in favour. The results suggest that the public seems to make a quite striking distinction between the more traditional deployment of Australian ‘soldiers’ and Special Forces.

Australians generally support their armed forces but not necessarily the political reasons behind their deployment. They are much happier deploying their insurance policy at home than they are abroad for other people’s wars in the case of Afghanistan and Iraq. Timor and other regional peacekeeping efforts can be seen as our own backyard. But the Middle East deployment reasoning is tied up with our relationship to the US and the intangible threat that is international terrorist organisations, with many unceremoniously lumped under the recognisable al-Qaeda brand name.

Australians expect that their defence force insurance policy can handle anything that their government of the day asks of them. Given the chance, enough money and time, they probably could. But at the moment, they are being given none of these things in politics or mainstream public debate. The expectations in the community, in politics and in the Defence community need to be managed realistically.

Katherine Ziesing is the editor of Australian Defence Magazine, an independently published magazine on Defence capability and procurement. She is also a board member of the Sir Richard Williams Foundation, an air power think tank.

Graph of the week: JSF, it just grew and grew

This week’s graph is an update of analysis started by ASPI in 2006. Drawing on annual figures published by the Pentagon, it analyses the real cost growth in the projected cost of the F-35 Joint Strike Fighter (JSF).

The first graph (click to enlarge) is the raw figures of the projected average aircraft cost, adjusted for inflation. It’s not a pretty story. But it’s hard to tell from this figure whether this is anything out of the ordinary.

JSF average unit procurement costs

Source: US Dept. of Defense Selected Acquisition Reports 2001–2011

A bit of extra tweaking allows us to compare the cost growth in the JSF with the average for large American defence programs, and with another aircraft program—the development of the Super Hornet—which is generally regarded as an acquisition success story.

This is the same JSF data as in the graph above, but this time plotted as an index (in red, click graph to enlarge).The average historical performance of US weapon programs is in black and the Super Hornet program is in brown.

This all suggests that, while the JSF might yet prove to be a winner, it’s been a harder than average slog so far.

JSF development program cost estimation

Source: US DoD Selected Acquisition Reports 2001–2011 for JSF and Super Hornet data. The curve for the historical average performance is derived from data in Norman R. Augustine’s Augustine’s Laws (1983).

Andrew Davies is senior analyst for defence capability at ASPI and executive editor of The Strategist.

Defence and Tony Abbott’s Heritage Foundation speech

Tony Abbott’s speech at the Heritage Foundation in Washington last week had some messages for Canberra policymakers to help shape next year’s ‘blue’ Incoming Government Brief. The speech was oddly constructed as some commentators have said, but there were four interesting themes: one announced a new bipartisan approach with government and three pointed to emerging differences.

Abbott’s bipartisan point was about defence spending. The one line on spending in the prepared speech said: ‘we will seek efficiencies in defence spending but never at the expense of defence capability.’ In the Q&A, Abbott criticised the cumulative effect of spending cuts but stressed savings could be made as long as they didn’t damage military capability. He said ‘the last thing we want to do is dismay our friends and allies.’ He did not say that a Coalition government would reverse spending cuts.

This is a new element of bipartisanship—to cut defence spending in the four-year period of budget forward estimates. Some Coalition Speaker’s Notes obtained by Crikey ‘commit to restoring the funding of Defence to 3% real growth out to 2017–18 as soon as we can afford it.’ But 3% growth won’t restore what has been cut and Abbott’s comments suggest the Coalition prefers the government’s approach. No one in Defence should imagine they will get an easy ride under a Coalition government. Nor should the Coalition think that cutting Defence will be easy. If they do form government they will get a shock when the Incoming Government Brief advises that cutting future capability is the only way to stay within the new spending guidelines. Read more

So, to the emerging differences. The first was on values. Abbott said, ‘Australia’s foreign policy should be driven as much by our values as our interests.’ How that translates into diplomacy remains to be seen. But it points to a close US alliance relationship even though Abbott used a lot of his speech to tell the Americans to toughen up. Abbott also claimed ‘a vindication’ of Western values that underpin economic and political reform in the Asia–Pacific. While some have said this sounds old fashioned, one of the quiet successes of the last decade has been the revitalisation of the Five Eyes community of the US, UK, Canada, Australia and New Zealand. The Five Eyes concept has a pedigree in intelligence but beyond that the grouping is one of the most effective multilateral security institutions in the world. More could be done to strengthen strategic engagement between the five.

Abbott’s take on the ‘Asian Century’ amounts to a second difference with government. It will be an Indian and Japanese century, he said, as well as a Chinese one. It will also be an American century: Abbott talked-up the continuing relevance of the US in Asia and also dwelt on Indonesia’s rising significance. The theme of an Asia-focussed Labor policy versus a more internationalist Coalition approach could shape into an interesting debate. Much will depend on how—or if—Ken Henry resolves his treatment of the US in his Asian Century White Paper.

A third theme in the paper was how to manage the risk of conflict. Abbott rather bluntly said that alliances in the Asia–Pacific have ‘the potential to draw in America and its partners’ into ‘serious military conflict.’ The solution, he claimed was political reform and economic growth: ‘A China that was freer as well as richer would be the best guarantee of peace and stability in the Asia–Pacific.’ Not surprisingly Abbott lowered the volume on that during his China visit, although he still commented in his Beijing speech that the Chinese ‘still can’t choose their government’—a long way from the pragmatic Howard approach on China.

Abbott’s Heritage Foundation audience did not bite at the line that alliances might draw the US and Australia into conflict. Indeed in the rest of the speech Abbott made clear his commitment to the defence relationship. Some clarity is needed here. While the domestic defence debate fixates on the cost of military force, government and opposition should acknowledge that the defence organisation is not just a cost-overhead: it helps build stability in the region. Stability is the platform for growth, not the other way around.

‘We’re more than allies, we’re family’ Abbott said, but expectations of what we can and should deliver have been raised by a decade of difficult military operations. For all the talk of family the US will push Australia hard on defence spending regardless of who wins their Presidential election, or who wins our federal poll.

Peter Jennings is executive director of the Australian Strategic Policy Institute.

Reader response: risk, strategy and luck

Hugh White nicely joins the fray in focusing on the key difference between risks and threats: time. That is, a risk can turn into a threat over time, and vice versa. As Hugh says, risk may be the ‘foundation of defence policy’ but I think we should be sure about what choosing such an approach leaves out.

In an earlier post, I noted that risk management is not a strategy. As Hugh said more eloquently then me, risk management is ‘about preparing against the possibility that dangers might arise in future.’ This means having defence capabilities available just in case, ready to respond to particular events if they occur—and we really, really hope they don’t. By contrast, as strategy has a defined end, defence capabilities are developed and used to try to achieve that end.

If we see military forces as being used as instruments for pursuing ‘politics by other means’ in the best Clausewitzian tradition, then military forces are useful across the spectrum of peace and war. From our point of view as a rather smug status quo power, then we may wish to try to shape our future in a particular direction that ensures that bad things do not happen to us, using the military as one tool amongst many to that end. This is conceptually a long way from sitting and waiting for a tragedy to occur.

Some hold that risk management is more than just awaiting events—that is, it involves being so obviously prepared that this shapes another’s thinking and they are dissuaded from taking ‘risky’ actions. This however sounds somewhat like deterrence, a strategy focused on someone at some time to convince them not to carry out some act. In short, shaping the future into a particular kind of desired international order.

Risk is about preparing for possible dangers, strategy can be working to try to make them not happen. Which is better for us? To paraphrase Clint Eastwood ‘do we feel lucky’? Or should we at least try to make our own luck?

We should think carefully whether risk management is the best foundation for our defence policy as there may be alternatives worth exploring.

Peter Layton is undertaking a research PhD in grand strategy at UNSW.

Reader response: risk, threat and insurance

Paul Monk raises an important issue about that slippery word ‘threat’ and its place in defence policy. I don’t think he quite gets it right, but nor do I agree completely with Rod Lyon’s objections. It is an important debate, because it goes right to the foundations of what defence policy is about: if we can’t get this clear, we have little hope of getting the policy itself right. So by way of saying ‘welcome’ to The Strategist, here is my take:

Let’s start with Paul’s basic point, which I think is right. Defence policymakers often assume that the only place to begin is with a threat, to which defence capability then provides a response. That leads to muddle and embarrassment, because often there isn’t a clear threat to respond to, so they find themselves either conjuring one from the air, or deciding we don’t need armed forces after all. In Paul’s nice phrase, ‘hyperbole at one extreme and lazy skepticism at the other’.

The problem of course is that we do not just build forces to deal with evident current threats. We also, and more often, build them to deal with possible future ones. How do we capture that idea of possible future threats? Paul’s solution is to invoke the idea of defence capability as insurance against threats, rather than a direct response to them. It’s a step in the right direction, because it goes a little way towards capturing the idea of future threats that are not yet evident. Read more

But as Rod points out, it doesn’t really solve our problem in identifying threats—just pushes the problem into the future. My way of approaching this problem is a little different. This is going to seem a little semantic, but bear with me. It hinges on the distinction between ‘risk’ and ‘threat’. We often use these words as synonyms, but their meanings are in fact quite different. Look them up in the Little Oxford Dictionary and you will see what I mean. ‘Risk’ means ‘chance of bad consequences’ whereas ‘threat’ means ‘indication of coming evil’.

You can see where this leads. I think defence policy—for a country like Australia—is about risks not threats. That means it is not about responding to dangers we can see today, but about preparing against the possibility that dangers might arise in future.

How does this help? Well it directs our attention to the central importance of identifying risks as the foundation of defence policy. How we do this is way too big a subject for a blog post, so let me just illustrate how it can work by sketching the concept of risk gets us out of the ‘China Threat’ net that entangled the 2009 White Paper. China’s growing power does not threatenAustralia, WP09 could have said, but it does increase Australia’s strategic risks by overturning the US-led order which has been so central to minimizing those risks over the past 40 years.

And of course risk is what insurance is really all about.

Hugh White is professor of strategic studies at ANU and a visiting fellow at the Lowy Institute.

ASPI recommends: Augustine’s Laws

Over the following weeks, The Strategist is going to pore over its bookshelves to bring to you new and classic books for your essential reading list. The first entry is one of ASPI’s defence researcher’s all-time favourites. Reader nominations for this feature are welcome.

Augustine’s Laws

Norman R. Augustine, Augustine’s Laws – an irreverent guide to traps, puzzles and quandaries of the defence business and other complex undertakings. American Institute of Aeronautics and Astronautics, New York, 1983.*

Book cover for Augustine's Laws

In 25 words or less: why should you read this book?

Good books on defence project management are relatively uncommon. Good books on defence project management that are engaging and funny are even rarer. Read more

*The recommended edition of this book is the enlarged and expanded second edition. That edition is defence centric in its discussion, which works better with Augustine’s source material. Later versions were rewritten with a more general management focus, although the data sets were still mostly defence oriented.

**Attributed to American baseball legend Lawrence ‘Yogi’ Berra, this quote appears on the facing page of this book.

You can see a lot by observing**

In March this year, Defense News ran a story on an expected cost overrun in the USN’s Ford class aircraft carriers currently under construction. Projected to cost an already eye-watering US$11.76 billion dollars, the first of class vessel is facing an overrun of another billion dollars by the time it launches in 2015. Needless to say, the USN and the Congress are staring each other down about the expected blowout.

But neither side should be surprised. If they had read and digested Norman Augustine’s eponymous book of ‘laws’ of defence procurement, they would have seen it coming. The book has a chart of cost growth in American aircraft carrier projects which shows unit costs steadily increasing over time, as is the case for most military hardware. Running a ruler over the graph and plotting the expected costs and delivery date for the new class is straightforward. The result is a point that sits squarely on the long-term trend line. Seen in that light, the Ford class hasn’t had a cost overrun at all—rather, the planning figure was (yet another) triumph of optimism over experience (see graph below, click to enlarge).

Graph. Augustine’s Law IX—the ‘final law of economic disarmament’ in action.

Graph showing costs of an American aircraft carrier from 1920 to 2020

Augustine is a poacher turned gamekeeper, at various times being high up in defence industry or in a senior acquisition position inside the Pentagon. He’s an engineer by training, and that shows in his willingness to quantify conclusions and in his implicit devotion to evidence-based policy. As such, the book is full of valuable data that is used to demonstrate principles and trends in an engaging way.

And defence planners might well benefit from the lessons that he distils from the numbers. Despite the abundant evidence that he presents, the mistakes of history continue to be made anew by new generations of planners. The US Congressional Budget Office has observed that, in many cases, historical data provides a better basis for planning than the estimates made in the early days of projects.

Unless the next White Paper contains some very big surprises, Australia won’t be buying aircraft carriers any time soon. But we signed up the Joint Strike Fighter before the R&D had begun in earnest, and are now looking at a substantially bigger price tag than expected (of which more next week.) Again, Augustine wouldn’t be surprised. His study of 81 major projects finds that final costs exceed pre-R&D estimates by an average of 52%.

It’s not just costs that routinely overrun—Stephen Gumley commented during his tenure as Chief Executive Officer of the Defence Materiel Organisation that schedule was consistently more troubling to him than budgets. Augustine has a law for that as well. The average schedule performance of a large number of American R&D projects reduces down to the ‘law of unmitigated optimism’:

Any task can be completed in only one-third more time than is currently estimated.
(Law XXIII)

These aren’t just cheap shots (although there are a few of those sprinkled throughout) but deep truths, and some of the book’s conclusions go well beyond the realm of defence projects. By bringing together diverse data sets from a wide variety of disciplines, Augustine arrives at ‘laws’ that are general in their applicability, while being specifically relevant to defence planning. One such is the ‘law of insatiable appetites’:

The last 10% of the performance sought generates one-third of the cost and two-thirds of the problems.
(Law VII)

Another example, and one that might apply to the management of many a government department, concerns the relationship between the number of participants in an activity and the outcomes achieved. The diverse data set includes the number of air to air victories by RAF pilots in WWII, American football rushed touchdowns, academic paper authorship and arrest data for the Washington DC police. The resulting law is all too convincing:

One tenth of the participants produce at least one third of the output, and increasing the number of participants merely reduces the average output.
(Law XX)

Andrew Davies is senior analyst for defence capability at ASPI and executive editor of The Strategist.

*The recommended edition of this book is the enlarged and expanded second edition. That edition is defence centric in its discussion, which works better with Augustine’s source material. Later versions were rewritten with a more general management focus, although the data sets were still mostly defence oriented.

**Attributed to American baseball legend Lawrence ‘Yogi’ Berra, this quote appears on the facing page of this book.

Grand Strategy? What does that do for me?

Grand strategy is a big idea back in fashion as a useful way to think about and address important issues. But many grand strategic schemes advocated are complicated, incomplete, inappropriate and use arcane terms that perplex policymakers and non-experts alike.

Over the next few posts we’ll build a simple, minimalist framework for thinking more clearly and concisely about grand strategy. We’ll then apply the framework to thinking about two challenges Australia faces; withdrawing from Afghanistan and managing China’s emergence.

Why bother devising a grand strategy though? What does it do that something else doesn’t? Grand strategy is a way to try to get somewhere that you want to go. That may seem simple but can be better understood when compared against two well-known alternatives: opportunism and risk management. These are approaches that await events; they respond to other’s actions. They’re reactive but they can be useful.

Australia is good at opportunism, with notable examples (PDF) in both the Vietnam and Iraq Wars of jumping on board the American grand strategy and exploiting it for our own benefit. We’re also adroit at risk management; our last two Defence White Papers took a risk management approach of building up an armed force just in case a carefully chosen, particular risk eventuated. An insurance policy against a house fire if you will—and hope there’s not a flood, as it might not pay out! Both approaches depend on others and react to their activities. With opportunism you go where others take you, and Australia becomes a player in another country’s project. In risk management you sit down to await the hope-this-doesn’t-happen event. As the old saying goes, ‘hope is not a strategy’, and neither are opportunism and risk management. Read more

Grand strategy is the opposite. A country uses a grand strategy to try to go where it wishes. It might or might not succeed, but the intention is clear. A grand strategy may fail but if you don’t attempt it, someone else chooses your destination for you. Grand strategy tries to make the future how we would like it. It’s a big, hairy, audacious idea.

Even so, isn’t this strategy? Strategy and grand strategy are both all about ends, ways and means where the ‘ends’ are the objectives, the ‘ways’ are the possible courses of actions and the ‘means’ are the instruments of national power. What then makes strategy ‘grand’?

Firstly, while grand strategy is also concerned with applying the means, it also crucially includes the development of the ‘means’ used. Strategy neglects the resources—the people, money and materiel—needed but grand strategy includes these as an integral part of its implementation—an important matter in this age of austerity. Secondly, grand strategy directs the full array of the instruments of national power, rather than like strategy focusing on a single type of instrument. A grand strategy directs all the national means, including diplomatic, informational, military and economic. More than simply whole-of-government, it’s whole-of-nation.

Grand strategy then involves developing a comprehensive set of means and applying these in a way that makes a particularly desirable future. You can see why strategic thinker Colin Gray says that ‘all strategy is grand strategy’. Without grand strategy a ‘strategy’ is alone and unsupported, and may work against what others are also trying to do. Without care, Australia’s approach to China could be like that. Some want a military strategy that hedges against growing Chinese military strength while at the same time embracing an economic strategy that engages China as a close trading partner. Such a ‘trading with the enemy’ hybrid is somewhat incoherent. It is to identify and fix such contradictions that grand strategy is most useful.

Having discussed what grand strategy is for, my next post talks about how to influence others.

Peter Layton is undertaking a research PhD in grand strategy at UNSW.