Articles by " Andrew Davies"

Australia–Indonesia relations: not a game?

Congklak, a traditional Indonesian game.

It’s interesting to think about the Australia–Indonesia relationship in terms of game theory, as Peter Jennings, Peter McCawley and Rod Lyon have done in this blog recently. And I even got a few hundred words into a piece of my own suggesting that the idea of a Nash equilibrium might explain Rod’s observation that cooperation hasn’t broken out for any appreciable length of time in the 60+ years of the relationship.

My basic idea (well, Nash’s brilliant insight applied to this case by me) was that it’s possible for players to get locked into a position where neither of them can gain by changing only their strategy. For example, both can rationally opt for the strategy that gives a middling outcome, avoiding the worst case but also falling short of the best case outcome that cooperation could provide. That’s essentially what Rod described. His thesis is strengthened by the observation from psychology of ‘loss aversion‘, in that people prefer to avoid losses, even at the expense of eschewing the possibility of greater wins. But the more I thought about it and tried to get the ideas on paper, the less I was convinced that we’re thinking about this the right way. Read more

A simple Google search on game theory and international relations provides a plethora of hits, including many scholarly articles—all suggesting this is an attractive way of thinking about international relations. Now I’m originally a physicist by trade, so I’m drawn to the use of simple mathematical models to describe the drivers of complex behaviour—that’s why I like Lanchester’s equations, and every time I encounter a ‘phantom traffic jam‘ I balance my frustration with a geeky satisfaction that there’s maths at work here. But I also know that there are many real-world systems where simple models don’t adequately describe even the key drivers, let alone the detailed behaviour or emergent phenomena that complex systems routinely throw up. And I know that people are intrinsically bad at game theory.

So this time I’m going for a social science explanation. (I might have to have a cup of tea, a Bex and good lie down after this.) Any scientist worth their salt knows that the first recourse should be Occam’s razor—the principle that, in the absence of evidence to the contrary, the simplest explanation should be preferred. In the case of Australia–Indonesia relations, instead of reaching for the textbook on game theory and wondering how we got enmeshed in a dilemma from which escape is beyond our collective power, I wonder if it’s as simple as observing that consistent cooperation hasn’t broken out simply because the two countries’ interests don’t overlap that much. In this view, we aren’t so much locked together in a struggle for advantage by probability and its calculable (or at least estimable) outcomes, as we’re randomly walking our own paths, cooperating when they converge in a positive direction and bickering—even coming to blows, or at least a tense stand-off—when they don’t.

In other words, we aren’t players in the same game all that often, and when we’re sometimes on the same side (tsunami relief, counter-terrorism operations after the Bali bombings) and sometimes not (Konfrontasi, East Timor in 1999). Our history explains why: Australia has always been actively on the side of the major Western naval power of the day and post-colonial Indonesia hasn’t been on anyone’s side—and resolutely tries to keep it that way, with ‘a million friends and zero enemies‘. The prevailing pattern—of indifference punctuated intermittently by cooperation and non-cooperation—follows naturally from that. In those instances when the two countries bump together—which is sometimes inevitable because of proximity—then the potential benefits and pain can be considerable. In those cases, the approach of game theory might be a useful lens for analysing the situation, as the previous authors in this series have done.

For me the interesting question is how the world, and the two countries’ paths through it, might change in the future. Australia will almost certainly retain its Western-leaning stance. So realistically we’re talking about a shift in Indonesia’s approach to its international relations. It would require a significant shock to achieve that. For example, significant maritime/territorial pressure from China could force Indonesia either to acquiesce or to make a greater commitment to Australia’s ‘side’. In any case, if externalities act to align Australian and Indonesian interests much more closely, then cooperation should become the order of the day—and only if it doesn’t should we start to look for esoteric game-theory explanations.

Andrew Davies is senior analyst for defence capability and director of research at ASPI. Image courtesy of Flickr user fitri agung.

The ADF’s new toys? (part 1)

I’ve often argued that the best predictor of the ADF’s future force structure is the current one. In other words, it’s much more likely that today’s platforms and capabilities will be replaced by something that looks pretty much the same, but with a technological refresh, than by something novel. So it is that six Oberon class submarines become six Collins class, three Perth class DDGs become three Hobart class DDGs and so on. The only qualitative change to the naval force structure in recent memory was the demise of the aircraft-carrier capability in the 1980s.

In the air and on land it’s a similar story, although rising unit costs have seen the numbers dwindle over time. Army’s 150 Centurion tanks were replaced by 101 Leopards and those in turn by 59 Abrams. Each generation was substantially more capable than the previous, but its role was the same. Similarly for fast jets; 167 Sabres and Canberras are now a hundred Hornets and Super Hornets.

But occasionally there’s a move to a genuinely new platform as technology and, dare I say it, military fashion dictates. As the government’s thinking about the use of the ADF evolves, or fiscal circumstances allow, new force structure options might appear. Here’s a quick market survey of some of the current possibilities. (We’ll look a bit further out in part 2.) Read more

V-22 Osprey

In terms of performance, the tilt-rotor Osprey (see the photo above for Lego’s interpretation) sits somewhere between the Chinook heavy lift helicopter the ADF already has and the C-27J battlefield airlifter currently in the process of delivery. As well as matching the vertical takeoff and landing capability of the Chinook, which allows it into rough and short strips, the Osprey is faster and has a greater range, but with a smaller load of either troops or stores. The C-27J is faster still, and has better range than either, but requires a runway. Whether there’s space in the force structure for another roughly equivalent aircraft is debateable, and the Osprey is also expensive at almost twice the price of a Chinook.

F-35B STOVL

Perhaps the demise of the Australian aircraft carrier capability has been greatly exaggerated? There’s certainly been a lot written on The Strategist and elsewhere about the possibility of putting jump jets onto the new amphibious ships. The calculus here is whether the capability gained is worth the combination of direct costs—and as a matter of principle I always worry when I’m told ‘it won’t cost much’—and opportunity costs in terms of alternative uses of the ships. Of course we could always buy more LHDs, but that ratchets the overall cost higher still, especially when through-life costs of manning the expanded fleet are factored in.

Armed drones

As I wrote last week, there’s a place in the ADF’s force structure for armed drones. In the right environment of lightly-armed but persistent opposition—the sort we’ve seen a lot of in the past fifteen years—they represent a cost-effective way of providing an enduring strike and fire-support capability. I’d be surprised if we don’t end up seeing this addition to the force structure sometime in the near future.

Nuclear submarines

In terms of public input to the white paper and almost any discussion of Australia’s future submarine, nuclear-powered submarines must be pretty near the top of the wish list, and the case has been put on The Strategist as well. There are lots of reasons to think that this won’t happen, not least of which being the likely eye-watering cost and the political difficulty of selling the idea to the wider population. It’d probably be doable if the will was there, but it would require even greater cooperation with the United States than already exists on other weapon systems. In the end the best reason not to go down that path is summed up by Mark Thomson:

A move to operate US-built nuclear submarines would entail a fundamental shift in Australian strategic policy—from a policy focused on continental defence, to one directly supporting and encouraging a strong US role in the region. The result would be a qualitatively different sort of alliance between Australia and the US with significant repercussions across the region.

Cyber weapons

Much of the talk about matters cyber is focussed on cybersecurity—protecting our own systems against the malicious activities of others. But there’s a flipside that’s rarely discussed—the development of cyber tools designed to disable or degrade systems operated by an adversary. There’s already evidence of the use of such weapons; the Stuxnet virus that damaged Iranian nuclear facilities is well documented, and maybe North Korea’s recent internet woes following their suspected hack of Sony Pictures wasn’t entirely coincidental? Don’t expect any decision for Australia to go down this path to be shouted from the rooftops, but given the centrality of computer systems to modern military capability, it’s a natural evolution in the cyber world.

Andrew Davies is senior analyst for defence capability and director of research at ASPI. Image courtesy of the author.

When the government says ‘competitive evaluation tender process’…

HMAS Sheean sails through Cockburn Sound as they prepare to berth alongside HMAS Stirling after a lengthy deployment.

We’ve written a lot about the future submarine project over the years. Last year, Mark Thomson and I surveyed the possible range of acquisition strategies the government could opt to pursue. We made the observation then that any

… project that’s going to spend billions of taxpayers’ dollars over decades will require bipartisan support, so efforts should be made to ensure that there’s a political consensus. And the public deserves to have enough information to at least understand why and how the money is to be spent.

We’re a long way away from either of those aspirations now. The public discussion of what’s being described as a ‘competitive evaluation process’ (without any working definition of what that phrase means) has turned an already opaque situation into one that’s now also politically charged. So let’s reiterate what we know. Read more

Whatever happens, this isn’t going to be a straightforward purchase. It’s clear from a series of commissioned studies that while we have an in-country capability for building and maintaining submarines, Australia doesn’t have the wherewithal to design and build a submarine from the ground up without substantial assistance from an established offshore design house.

Before this weekend, most watchers of the process (including me) were of the view that the government’s preferred option was collaboration with Japan, which would see a modified version of the Japanese Navy’s Soryu-class submarines built for Australia. That option seemed to be developing momentum, based in no small part on a strong relationship between Prime Ministers Abbott and Abe. And it was seen as part of a deepening strategic relationship between the two countries.

In fact, it would almost certainly be a three-way arrangement because Australia has a strong preference for including American combat- and weapon-systems into our subs. They aren’t standard fits in the Soryu boats—the Japanese have a combination of their own bespoke systems and some licenced European technologies. Fitting American systems into a Japanese submarine would require some redesign work, and the three governments would have to agree to the arrangement.

If we can make that work, it’s not clear how much work would be available to Australian industry. The Japanese yards are extremely efficient and it would make sense to build the hulls there. Perhaps there’d be some scope for doing the final fitting-out of the submarines here, as is being done with the new amphibious ships. But submarines are much more tightly integrated than large surface ships, so it’s not clear that enough would be gained to balance the risks taken on.

The fall-back option would be to run a more conventional acquisition competition, in which design houses from France, Germany and Sweden compete for Australia’s business. Each of those countries is an established exporter of arms and routinely compete for international business, so that would be a relatively straightforward exercise for them. All three countries have been busy pitching their offerings to the Australian government and each of them would be looking at ways of involving Australian industry in the project to sweeten the deal politically. In that sort of arrangement, it’d make sense for the Australian government’s own naval shipbuilder ASC to partner with the foreign designer to bid for work share—as seems to be the case the government is now pushing. Alternatively, the government could require all bidders to partner with, or perhaps take over, ASC.

Japan’s a different story. It’s taking very early steps towards becoming a defence exporter, and to date hasn’t exported any equipment of note. Japan would be going from ‘zero to sixty’ in exporting something as sophisticated and sensitive as a submarine, and political and perhaps even constitutional constraints would have to be negotiated. That’s why a strong government-to-government relationship would have to underpin any deal with Japan.

If Japan is indeed the preferred option, it’s hardly likely that Tokyo will consider the ‘opening up’ of the Australian submarine project to other nations a welcome development. The most likely effect of a competition (and of the party political divide opening up in Australia) would be a reduction of Japanese enthusiasm for involvement. If that falls through, we’d be again looking to Europe—back to where we were before the Japanese option reared its head.

I think we can reasonably infer that the government wants to keep the Japanese option available, and that it might still be the preferred option. If that wasn’t the case, it’s hard to explain why it has chosen to endure the political pain of the past 48 hours (cartoon) rather than cutting it off with a crisp announcement of how a restricted tender (there was never going to be an open tender for submarines) would work and what sort of industrial arrangements the government would be seeking to put in place.

Alas, bipartisanship and transparency seem an even more distant prospect than was the case even a few months ago.

This article expands on an opinion piece published in the Australian Financial Review on 11 February.

Andrew Davies is senior analyst for defence capability and director of research at ASPI. Image courtesy of Department of Defence.

The ADF and armed drones

Today is the last day for submissions to the Foreign Affairs, Defence and Trade References Committee inquiry into the potential use by the Australian Defence Force of unmanned air, maritime and land platforms. The Strategist will publish two posts today on armed drones, which together form ASPI’s open submission to the Committee.

When looking at the future shape of the ADF, one of the possible force structure changes the government might chose to make is the addition of armed drones. There are some good reasons for that to happen, but also potential diplomatic downsides that would need to be managed.

Let’s start with the case for adding armed drones to the ADF’s inventory. There’re two obvious roles for them to play. The first is armed reconnaissance—being able to survey the battlefield and the wider environment, with the ability to engage the enemy if necessary. This is the same role as envisaged for the Tiger helicopter. Read more

The ADF has already used drones for tactical observation purposes in the form of the small Shadow that has a wingspan of just over 6 metres and larger Heron, with a wingspan of 16.6 metres. However neither drone is capable of delivering weapons and any targets identified have to be engaged by other platforms, such as by calling in an air strike. In Afghanistan, the ADF didn’t have its own strike platforms in theatre, and relied on armed helicopters and fixed-wing strike aircraft supplied by other coalition nations.

Something like a Reaper with a Hellfire missile is the obvious option for the time being. They’re a weapon that’s suited to the operations the ADF has been undertaking in the past decade and a half; against determined but relatively poorly-equipped adversaries such as the Taliban in Afghanistan. By having its own armed drones, Australian forces would have the capability unilaterally to identify and strike targets.

The second application of armed drones is as flying fire support for land force elements that find themselves under fire or otherwise in danger. The long endurance of drones, along with their relatively low cost per flying hour compared to fast jets, makes them a good fit for the role and allows them to be deployed to theatres with relatively limited ability to support flying operations.

In a more contested environment in which the adversary has a sophisticated anti-air capability, something more capable than Reaper would be required. For now, that would likely be a manned strike platform with support from electronic warfare and situational awareness platforms. In the future, there’s likely to be higher performance (and almost certainly higher cost) unmanned options such as the stealthy Unmanned Combat Aerial Vehicles under development, such as the American X-47B and European Taranis or nEUROn systems.

In fact, when the Defence project that’s acquiring Australia’s F-35 Joint Strike Fighters was conceived, the final phase allowed for the possibility of acquiring high-performance strike drones if their maturity allowed. They simply aren’t yet at a level of technical maturity for that to happen. (And in fact we’re still waiting on the F-35 to reach an operational level of capability, but that’s another story.) Like all acquisitions, it’s a matter of looking at the utility of an armed drone system and comparing it to the cost to make a judgment about its value.

But because of the way that armed drones have entered the public consciousness as weapons in the unconventional part of the ‘war on terror’, they’ve the potential to draw opposition from the public and from neighbouring governments. In particular, drone strikes in places like Pakistan and Yemen—countries that aren’t even declared theatres of conflict—have given them a dark mystique that transcends their actual capability. So if Australia was to purchase Reapers or a similar system, there’s the potential to cause alarm, among both Australians and our neighbours. For example, Indonesia might be concerned that Australia was planning to conduct its own strikes against extremist groups on its territory.

There are two things Australia could do to allay those concerns. Firstly, it could make clear public statements about the concept of operations for the drones, limiting them to use in areas where other ADF elements are deployed, for example. Secondly, and perhaps more importantly, the Australian government could ensure that armed drones are put unambiguously and visibly under military control, rather than being ‘national assets’ in the sense that CIA-operated aircraft that carry out many of the strikes overseas are.

Those constraints wouldn’t limit their utility to the ADF, and Australia’s intelligence agencies don’t have the same operational licence that the CIA has. That’s an important difference; the CIA has an operations division (known as the Special Activities Division) as well as an intelligence division, whereas Australia’s Intelligence Services Act explicitly limits the activities of its foreign intelligence agencies to the collection, analysis and dissemination of intelligence. Military or paramilitary activities are explicitly forbidden, and the use of armed drones by civilian agencies would be a dramatic departure from current practice requiring legislative change.

By making those arrangements clear, the Australian government could ease any regional apprehension about any future acquisition of an armed drone capability. And as Rosie Turner will show in a follow-on post, the UK’s experience in acquiring and using armed drones shows how we might manage the issue.

Andrew Davies is senior analyst for defence capability and director of research at ASPI. Image courtesy of Flickr user UK Ministry of Defence.

Home on the gun range?

9442447402_13dc059540_zI was far from convinced by Deane-Peter Baker’s recent post on Australia’s gun laws and their allegedly deleterious effect on our Army’s effectiveness and safety in combat. But it evidently struck a chord with readers, judging by the number of Facebook ‘likes’ it got, so I’d offer the following thoughts in response.

I see two main problems with Baker’s argument. Firstly, he presents no evidence of any capability shortfall, other than comparing the shooting expertise of a few individuals with that of an American visitor. There’s no doubt that weapon proficiency and reliability are both critical in combat—but it’s the adversary that has to be outshot.

To be sure, there were Australian servicemen killed in exchanges of small-arms fire, but the majority of the fatalities that the ADF suffered in Afghanistan were due to rockets, improvised explosive devices (IEDs), or tragic so-called ‘green-on-blue’ attacks. The roadside bombs are evidence of the reluctance of the enemy to get into a fair fight with Western forces and of their preference for adopting asymmetric tactics. That’s been a clear trend in the more than a decade since the Afghan and Iraq wars began. And green-on-blue attacks (where indigenous Afghan forces working alongside Australians turn on them without warning) can’t really be solved through better weapons proficiency. Read more

But for the sake of argument, let’s assume that Baker’s right, and that our troops need to be better shots. His solution is for them to privately own military-style weapons for practice ‘out of hours’. Seriously? If the RAAF was turning out second-rate pilots (which they don’t), would the best solution be for the service to encourage their pilots to join a civilian flying club to get some quality hours up in their spare time?

Of course that’s not the case. The correct response of the relevant service chief to either a capability shortfall or combat-safety issue due to lack of operator skill is to change the training regimen to ensure that the required skills are generated and kept current by appropriate and rigorous in-service training. Remember that the service chiefs are Capability Managers, with responsibility to ‘raise, train and sustain’ the capabilities the government requires from the ADF. If our land forces can’t shoot well enough to carry out their mission safely, then Chief of Army has some work to do. And if the requisite extra training costs more, then Army and Defence need to look at their budget priorities.

It’s also worth observing that the ADF is raised from and paid for by the Australian populace, and should reflect the values of the wider community. On the subject of automatic and semi-automatic weapons, a large majority of Australians have a strong preference for them to be kept out of civilian circulation. (And in this poll—the most pro-gun recent poll I could find outside of a special interest shooters website—more than half of respondents want even tighter controls than those currently in place). Exempting off-duty ADF personnel from the nation’s strict but popularly-supported gun control laws would likely be as unpopular as it is unnecessary.

And any instance of a weapon licensed under such an arrangement being used in a violent crime would be a public-relations disaster for the ADF. A link between the ADF and violent crime wouldn’t be missed by the press, and thus by the wider population. Well over two decades on, the Hoddle Street shootings in Melbourne by an ex-soldier continue to draw criticism of the ADF, even though it’s far from clear that there’s any culpability on the service’s behalf.

In short, Baker’s proposal is to let the land force Capability Manager (Chief of Army) fail in his job of providing government with forces that are fit for purpose, while hoping that his diggers are assiduous enough in their unsupervised homework to get up to standard. In return, Defence (and the government) get to take on the risk of having to manage a PR fiasco. That’s not an appealing prospect.

Andrew Davies is senior analyst for defence capability and director of research at ASPI. Image courtesy of Flickr user Lachlan Donald.

The year in clicks: The Strategist’s top 10

Countdown

With the end (of the year) nigh, it’s time once again to have a look at what’s been making Strategist readers click. The 2013 top ten showed that our readership was most interested in submarines, China and Indonesia. Try as we might, ASPI couldn’t interest the Indonesian government in buying Chinese submarines, thwarting our aim of producing the ‘post to beat all posts’.

Here are this year’s top ten posts as voted by the mouse buttons of our readers, in increasing order of popularity.

10. China’s emerging undersea capability (Benjamin Schreer)

9. LHD and STOVL: an engineer’s view (Steve George)

8. The strategic implications of China’s hypersonic missile test (Benjamin Schreer)

7. The 2014 defence budget: as good as it gets (Mark Thomson)

6. Aircraft carriers for Australia? (Karl Claxton)

5. The significance of D-Day (various artists)

4. Why the ADF handgun is an ethics issue (Deane-Peter Baker)

3. Graph of the week: ADF pay (Mark Thomson)

2. Is Indonesia’s next Marty Natalegawa… Marty Natalegawa? (Natalie Sambhi)

1. The paper tiger myth: how America is underestimating China’s resolve and power (Jake A.
Douglas) Read more

As was the case last year, Indonesia and China rated highly, taking the top two places. Interestingly, in a year when the Future Submarine and the struggling Air Warfare Destroyer build were making most of the headlines as far as defence projects were concerned, neither managed to crack our top ten. Rather, it was the potential for putting jump jets on the LHDs that caught our readers’ attention.

Finally, in an illustration that hip-pocket issues galvanise attention, Mark Thomson’s budget summary scored well—but was solidly beaten by his post on ADF pay scales.

Over the holiday period, The Strategist‘s editorial team will be running their favourite posts from 2014—a sort of iView for the strategically minded.

Andrew Davies is senior analyst for defence capability at ASPI and a regular—though apparently underappreciated—contributor to The Strategist. Image courtesy of Flickr user Steven Depolo.

Graph of the week—western air power and the strikes in Iraq

With the launch of ASPI’s Strike from the Air paper yesterday, I thought it was worth looking at some data from both the current campaign and the now well-documented 1991 Gulf War air campaign. There are a couple of interesting conclusions that can be drawn.

First, the raw numbers of the coalition air campaign against targets in Iraq in the 43 days of Operation Desert Storm. Redrawn from the 1993 Gulf War Air Power Survey (PDF) by Thomas A. Keaney and Eliot A. Cohen, Figure 1 shows the number of airstrikes by day over a 43 day period from the commencement of hostilities.

1991 Gulf War coalition air strikes Read more

Over 42,000 strikes were flown by coalition fixed wing aircraft—in addition to the many hundreds of cruise missiles launched from ships and submarines. Targets included ‘strategic centres’, facilities and platforms that could contest coalition sea and air control (especially the Iraqi Air Force and its aircraft in hardened shelters) and the Iraqi Army. In addition, coalition aircraft flew between 300 and 500 air-to-air sorties each day. For its part, the Iraqi Air Force managed almost 120 sorties on day one, and was effectively out of action by day 14, although sporadic activity continued for another couple of weeks.

The strategic targets included command, control and communication nodes, the Iraqi leadership, WMD facilities and key civilian infrastructure such as electric power, bridges and railways (averaging about 200 strikes per day). But the Iraqi Army received the lion’s share of the coalition effort, with no fewer than 23,430 strikes against ‘Iraqi surface forces’.

The effect on Iraq’s ground forces was, as might be expected, devastating. Keaney and Cohen quote one Iraqi veteran of the Iraq-Iran war of the 1980s who observed that his brigade suffered ‘more damage in 30 minutes than it had in eight years in the previous war’. As a result of early heavy losses and the enduring threat of air attack, the Iraqi Army lost any capacity for initiative, including the ability to withdraw from the Kuwait theatre. It resorted to constructing more berms and digging deeper for defence from air strikes. In short, coalition air power neutralised the Iraqi Army as an effective fighting force.

Now let’s look at the data from the ongoing air campaign against ISIL. In the first 43 days of this campaign commencing 8 August, the total number of strikes was just 167, compared to the 42,000 in 1991. The total number of strikes flown against ISIL over the past four months is now just a little over 1,200—the number flown on 15 February 1991.

At an estimated strength of between 20,000 and 30,000 and possessing few armoured vehicles, ISIL is a small and poorly-armed force in comparison to the Iraqi Army of 1991 (around 500,000 troops with thousands of tanks, armoured personnel carriers and artillery pieces—all of which were candidates for strike operations) But the scale of the discrepancy is also probably indicative of the amount of air support that’ll be mobilised in support of Western troops on the ground as compared to other circumstances.

Like the Iraqi Army before it, ISIL’s already learning not to concentrate its forces and to minimise its exposure to air attack as much as possible. Its strategy is to keep close to civilian populations, relying on coalition rules of engagement to constrain further strikes. So what we have now is something of a stand-off. The coalition can’t isolate ISIL and destroy it, but the extremist group can’t operate as a coherent force of any size, making dramatic advances and the swift taking of major centres like Mosul unlikely in the future. Still, it can slowly infiltrate other areas and, like the Iraqi insurgency that followed the succession of large scale operations in the 2003 war, it can operate as a guerrilla force, making the governance of Iraq difficult.

The above comparison with previous coalition air campaigns suggests that the current low rate of effort is unlikely to stretch coalition forces. Essentially, the United States and its partners can keep up a campaign against ISIL for as long as it continues to operate as a military force. In that sense, ISIL can’t win, at least via a conventional military victory. The flip side is that it also can’t really lose its existing gains while coalition operations are constrained to air strikes only, and then only in circumstances where collateral casualties are unlikely. Air power reduced the 1991 Iraqi Army to an ineffective fighting force, but ultimately boots on the ground dislodged it. In the absence of a ground intervention, the most likely scenario in the near future is a continued slow degradation of ISIL as an ‘army’, but with no real change in the overall situation.

Andrew Davies is senior analyst for defence capability and director of research at ASPI. Graph courtesy of Andrew Davies.

AWD: time for Plan B

DeckchairsYesterday the government made two announcements about naval shipbuilding. The first was its plan to fix the ailing Air Warfare Destroyer program. What emerged wasn’t the approach foreshadowed in the press a few months ago, in which a single commercial entity—BAE was the hot favourite—would take control. We explained the pros and cons of that approach here on The Strategist.

Putting the project under a single company would’ve resolved the distributed responsibility under the current alliance framework and removed the government from being on both sides of the contract. It certainly looked headed that way, with the government appointing merger and acquisition specialists as advisors on the project. But in the end that wasn’t the approach chosen. Instead, bets have been redoubled, in that the parties that collectively brought the AWD program to its current point will continue in a revamped management model. According to the media, the Finance department (owner of ASC) put the kybosh on bringing in outside management.

There are three components to the AWD remediation plan. First, the Spanish design house Navantia—which inexplicably was left out of the alliance when it was created—will take on an enlarged role. This ought to help streamline the communication between designers, production engineers and the shopfloor. The second component is insertion of more shipbuilding experience into the project by involving BAE, which was formerly only a subcontractor for modules, in project management. Third, existing alliance member Raytheon will take on an expanded role in supply chain and corporate management. Read more

It’d be strictly inaccurate to describe the plan as simply rearranging the deckchairs, but it’s not far from it. If anything, this latest initiative further clouds the already diffuse governance arrangements inherent in the alliance. And there’s only a handful of new people being brought in: 20 from Raytheon, 11 from Navantia and only 8 from BAE.

The government describes this as an ‘interim arrangement’ and says ‘no decisions have yet been made about the long term arrangements for the Air Warfare Destroyer program’. A lot is at stake. Aside from the $8.5 billion project itself, further domestic naval shipbuilding projects depend upon improved performance. Basically, the government has said that if the project can’t get up to speed by the middle of next year, it won’t guarantee further work.

And although we noted earlier that there’s been apparent improvements to shipyard productivity (and to submarine support), yesterday’s announcement slipped the delivery dates for the vessels by another nine months. The first two vessels will now be 30 months late and the third a full 3 years. So while we’re told that productivity is improving, the AWD schedule is moving in the opposite direction.

The second of yesterday’s announcements was a plan for the creation of a ‘sustainable shipbuilding industry that supports shipbuilding jobs‘. The plan has three parts, fix the AWD project, create a shipbuilding industry around the future frigate (contingent on productivity improvements), and create a ‘sovereign submarine industry’.

What’s a sovereign submarine industry? Not unreasonably, one might assume that it has something to do with building submarines in Australia. So the media asked the question—repeatedly—but to no avail. The exchange is available in transcript and on video. The best the fourth estate could get from the Minister was that specific announcements would be made in due course. It was left to the Prime Minister to clarify the matter later in the day (pay wall) in terms of submarine fit-out and maintenance being done in South Australia.

Yesterday’s confusion adds little to what we know about the government’s thinking about the way ahead. Rather, it continues a pattern whereby even the options under consideration are kept secret. While that’s perhaps understandable given the highly charged politics surrounding future naval acquisitions, it’s unlikely to deliver good policy.

There are many difficult policy choices ahead; choices that will shape the navy out to mid-century at a cost of tens of billions of dollars to the taxpayer, and we need to have an informed debate on those issues. At the moment, the policy debate is being overshadowed by parochial politics and handicapped by an acute absence of information. Yesterday’s announced ‘plan that will create a sustainable naval shipbuilding industry’ amounted to a mere 153 words.

Specific matters are easy to identify. Apart from fragmentary and unverified leaks, we don’t know what the White-Winter report recommended for fixing the AWD program, and we don’t know the range of options and acquisition strategies under consideration for either the future submarine or future frigate. Similarly, we don’t know the benchmark against which AWD productivity will be measured in deciding the future of local naval shipbuilding.

There’s not time for a green paper let alone an independent review to sort things out, but there’s no reason why next year couldn’t begin with a full ministerial statement on naval shipbuilding that fills in the many blanks.

Andrew Davies is senior analyst for defence capability and director of research, and Mark Thomson is senior analyst for defence economics at ASPI. Image courtesy of Flickr user Nick Herber.

Graph(s) of the week: F-35 costs re-re-revisited

While the Australian Government has already made its decision to go ahead with procuring a total of 72 F-35 Joint Strike Fighters, there’s still cause to watch the progress of the development program. Australia will most likely take delivery of the bulk of its aircraft about five years from now, which given the lead times for major components, means we’ll start paying for them around 2017 or so. But at the moment we don’t know what the final bill will be, so ASPI will continue to monitor the F-35 cost data.

I’ve reported on F-35 costs and schedules a few times before on The Strategistmost recently after the release of this year’s USAF budget papers. That contained some good news, pointing towards stability in program costs over the past few years. But the USAF is far from being a dispassionate observer of the F-35 program, as it’s in desperate need of new aircraft to recapitalise its tactical fleet. So it’s worth looking at the data provided by the Government Accountability Office (GAO) as well. Read more

The Pentagon and the GAO have often seen the F-35 program through quite different lenses. The GAO was especially critical of the management and performance of the program in the period 2002–2010, while the Pentagon tended to play down the problems. The verdict of history is pretty unequivocal on that one: the GAO was right, and after the program breached a Congressional threshold for cost overruns in 2010 it was subjected to a major re-baselining.

Since then, things have been running relatively well. The program has had some setbacks—including the grounding of the fleet due to an engine fire earlier this year—but seems to be tracking more reliably than was previously the case. We can be more confident of that than was formerly the case because, significantly, the Pentagon and GAO figures are now telling the same story.

Let’s start with the program cost—the total amount required for all of the R&D as well as the production of the aircraft and the ancillary equipment required to operate it. To an extent that’s not Australia’s problem, as we won’t pay any extra for R&D because of our membership of the F-35 international program. We’ll only pay for the aircraft and related equipment, not for further development work. The US shoulders that alone, which is why the program cost gets the attention of Congress. In the worst case, that could cause American procurement numbers to be cut, production rates to be slowed and unit prices to go up for all customers.

Figure 1 shows how the F-35 is tracking compared to the disastrously expensive F-22 and the successful F/A-18 E/F Super Hornet programs. The graph shows indexed costs, relative to the initial program estimates. As F-22 R&D costs spiralled upwards, numbers were cut successively from over 700 to 188 when production ceased—and the gross cost per aircraft ended up at over US$400 million (today’s prices) as a result. After tracking the same way for a while, the F-35 is showing signs of levelling out. We have to be a little careful, because development programs often look stable for a while before jumping upwards again, but the recent trends are good.

Indexed unit program cost (2)

Figure 1. Indexed program costs for three American tactical aircraft programs. Source: Pentagon Selected Acquisition Reports.

Figure 2 shows the average procurement cost per aircraft, which is the price without the R&D component. The figures are averaged over all three types of the F-35, and Australia is buying the least expensive, so the graph over-prices the Australian purchase. The trend since the 2010 baseline was established is downwards, once we allow for a time lag in the GAO data because they work on Pentagon data from the previous reporting period. That’s a first for the F-35 program, but is a feature also visible in the Super Hornet data once that program reached maturity. The GAO observes that ‘the production line continues to show efficiencies and quality metrics show positive trends’, consistent with the Pentagon reporting US$11.5 billion of savings (about 3% of the total cost) due to more efficient processes.

F-35 average unit procurement cost

F-35 average procurement cost as reported by GAO from 2002. Source: Annual GAO Assessments of Selected Weapon Programs (2014 here)

Finally, a caveat. The GAO reporting notes that critical technologies for the F-35 aren’t yet mature, and that a substantial amount of testing remains to be done—all while production is ramping up:

The F-35 program … plans to have 530 aircraft, more than 20% of its total procurement quantity, under contract at a cost of approximately $57.8 billion before developmental testing is completed in 2017.

Until all of the testing is complete, we can’t be completely sure of the future trajectory of the F-35 program metrics, so we’ll be keeping an eye on them. But for now the report card would read ‘has made significant progress—must stick with it’.

Andrew Davies is senior analyst for defence capability and director of research at ASPI. Graphs courtesy of Andrew Davies.

Expanding alliance: ANZUS cooperation and Asia-Pacific security

US Army Sergeant Ian Rhines and Craftsman Tyler Kernahan watch the airborne insertion of US troops from the 1st/501st Infantry Regiment into Drop Zone Kapyong as part of Exercise Talisman Sabre 2011.

Nearing a sprightly 65 years of age, the alliance between Australia and the US, underpinned by the formal ANZUS Treaty of 1951, continues to be a central part of Australian defence and security thinking and an instrument of American policy in the Asia–Pacific. But Asia’s strategic outlook has changed almost unrecognisably from the 1950s to today. Economic and financial systems, the sources of global wealth and power, military and communications technology and even the political structures of Asia–Pacific countries have all transformed dramatically since the end of World War II.

How is it that an alliance conceived as a bulwark against a resurgence of Japanese militarism and which cut its military and intelligence teeth in the Cold War is still relevant to today’s strategic concerns? The answer is partly— and importantly—that the core values of the ANZUS members are strongly aligned, and successive Australian governments and American presidential administrations have seen great value in working with like-minded partners to ensure Asia–Pacific security. That’s seen ANZUS adapt to strategic change several times during its existence. Far from becoming a historical curiosity, today it’s not just relevant, but of greater importance than has been the case in the past few decades. Everything old is new again in the ‘Asian century’. Read more

Two events in the first decade of this century have propelled ANZUS back into the mainstream of security policy development. The first and most dramatic was the 9/11 attacks, after which Prime Minister Howard formally invoked the ANZUS Treaty for the first time. Consistent with Article IV, Australia and the US acted to meet the common danger posed by al-Qaeda. Less dramatic, but potentially more significant in the long run, is the shift in emphasis in American policy towards Asia under its ‘pivot’ or ‘rebalance’.

This was reinforced at the August 2014 Australia–US Ministerial (AUSMIN) Meeting, where a new legally binding agreement on force posture cooperation was signed to support US Marine Corps and Air Force activities in northern Australia. The same meeting endorsed closer cooperation on ballistic missile defence, industry collaboration, science and technology research, defence exercises and space cooperation. The alliance was lauded by the Australian foreign and defence ministers and the US secretaries of state and defence as providing new ways to ‘partner with other countries in the region’. The role of ANZUS as a vehicle for engaging Asia–Pacific countries, and ASEAN states in particular, is a new aspect of alliance cooperation.

The alliance receives strong bipartisan support from Australia’s major political parties. Only a small number of minor party members or independents in the Australian Parliament express outright opposition to it. It was a Labor government under Julia Gillard that promoted so-called enhanced force posture cooperation with the US military in northern Australia in November 2011. Labor’s 2013 Defence White Paper (PDF) said that ‘Australia’s Alliance with the US is our most important defence relationship and is recognised in Australia’s National Security Strategy as a pillar of Australia’s strategic and security arrangements’. Opinion polls show high levels of Australian popular support for the relationship. A longstanding opinion survey conducted by the Australian National University found that 81% of those surveyed in May 2014 thought that ANZUS was ‘very important’ or ‘fairly important’ for Australia’s security.

While the alliance looms larger in Australian political life than it does in the US, there’s no doubting American political support for the relationship. President Barack Obama told the Australian Parliament in November 2011: ‘As it has been to our past, our alliance continues to be indispensable to our future’.

To explore new ideas on how to strengthen the US–Australia alliance, today ASPI released its latest Strategy—Expanding alliance: ANZUS cooperation and Asia-Pacific security (PDF). The report offers practical ways for the US and Australia to enhance cooperation in the maritime, land, air, cyber, space and intelligence domains and improve alliance burden-sharing and force interoperability.

The alliance between the US and Australia promotes regional and global security while advancing both countries’ strategic interests. In light of the changing military balance in the Western Pacific, it makes sense for Australia to pursue new areas of cooperation with its US ally—and to strengthen existing areas of alliance cooperation—to support the regional position of the US. In a more contested security environment, Australia becomes more important as a capable US ally strategically located close to the intersection between the Indian Ocean and maritime Southeast Asia. And as strategic, economic and political circumstances bring fresh challenges to both countries, alliance cooperation will only increase in importance.

Peter Jennings, Andrew Davies, Benjamin Schreer and Daniel Nichola are co-authors of ASPI’s latest StrategyExpanding alliance: ANZUS cooperation and Asia-Pacific security (PDF). Image courtesy of Department of Defence.

The number that refuses to submerge: $36 billion

HMAS Farncomb conducts pre-diving checks prior to diving in the rough seas off Sydney, as the boat and crew make their way to the East Australian Exercise Area for Exercise Black Carillon 2013.Lost amid ‘canoe-gate’ last week was an interview with the Minister for Defence during which he made an interesting comment:

… the Labor Party when in power for six years had ASPI do a run over* of what the cost of these mythical 12 submarines was going to be and ASPI said it was about $36 billion. Now those were the numbers that ASPI said the cost of the program was running out, Labor themselves had costed the program at $41 billion …

In that short passage there’s an important revelation—the costing the previous government was using as its working figure for the Future Submarine program was $5 billion more than ASPI’s now widely-quoted $36 billion figure.

That’s significant because recently there’s been quite a bit of criticism of that 2009 estimate. For example, it came under fire during the debate that kicked off the recent Submarine Institute of Australia conference. It got a similar serve during the South Australian government’s Defence Industry Summit (PDF) back in October and again at a recent Senate Committee hearing into naval shipbuilding (PDF). The gist of the criticism is that the estimate Sean Costello and I published in our 2009 ASPI paper How to buy a submarine was naïve, ridiculously high and has skewed the debate about the future submarine to the detriment of Australia’s military capability.

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I won’t defend the estimate as an object of precision. Far from it—it wasn’t the result of the detailed systems-engineering assessment of technological maturity, industry capacity and user requirements you’d need to have confidence. It was, as stated, a simple extrapolation of historical data on submarine programs provided to ASPI by DMO.

That’s a method that the US Congressional Budget Office observed tends to give a better estimate than those project offices typically produce in the early stages of a new development—and it’s how I produced a 2008 estimate of the cost of the F-35 Joint Strike Fighter (PDF, figure 2). Again a simple calculation based on extrapolation from a smallish number of data points, it’s looking pretty good today. My estimated mature flyaway cost for the air force version of the F-35 was US$80 million, or US$99.5 million in 2019 money. In comparison, this year’s US Air Force budget papers give a 2019 flyaway cost of $97.1 million. So the historical data got within 3% of predicting the actual figure at a time when the F-35 program estimates were 30% optimistic. And it works for aircraft carriers too.

That our estimate got the media’s attention wasn’t that surprising. After all, $36 billion is a lot of money—almost a dozen major metropolitan hospitals or six Snowy Mountain hydro schemes. That’s newsworthy in its own right. More surprising, perhaps, was its longevity. At the risk of revealing too much think-tank tradecraft (especially to our valued Strategist readers on Russell Hill), I’ll admit that we thought it’d have a short shelf-life. When we put the number in a draft sent to Defence, we thought they’d challenge it and suggest a lower one for us.

That didn’t happen. In fact, it was another of the numbers in that paper—ironically one we were pretty happy with because it was based on reporting in Jane’s and other usually reliable defence publications—that got a serve from Defence. We said that 12 off-the-shelf German submarines might cost $9 billion. FSM project lead Admiral Moffitt begged to differ when he said ‘Andrew Davies in ASPI talks of $9 billion for off-the-shelf submarines. That’s nonsense’.

Clearly the larger number lived on because no one had a better one at the time. In fact, given the generally unfavourable reception in the Australian polity of the $36 billion estimate (see this video example), it’s not surprising that no one from Defence wanted to stick up a mast and admit that their number was bigger still.

In 2012, the Kokoda Foundation had its own go at costing the future submarine (PDF). Their number of around $1.2 billion to $1.6 billion per boat was also based on historical data, though the calculation lacks adequate transparency—the report doesn’t label the data points or provide a scale on the vertical axis of the graph (figure 7). But given that each Collins cost around $1.5 billion in 2011 dollars, this would see the replacement boats costing about the same. That’s an almost impossible outcome if we’re after the larger size and significantly better performance the 2009 White Paper called for.

Performance is the key to understanding the likely cost. As I explained in a later paper intended to put the $36 billion figure in context, if we aim for a more conservative performance, it’ll cost less and be less risky to deliver. And based on statements from Defence, that’s where we’ve arrived today. So unless the ghost of the high performance future submarine rises, we shouldn’t see the $36 billion figure surface again—but I’ll bet we do.

*For the record, ASPI wasn’t tasked by government to do that estimate. Like much of our work, we initiated it ourselves.

Andrew Davies is senior analyst for defence capability and director of research at ASPI. Image courtesy of Department of Defence.

Thinking about the future

The topic I was given at the recent Submarine Institute of Australia conference was ‘The Strategic Environment in the period 2020-2050’. That gave me a chance to reprise in part a lecture I gave in 2010 at the Australian National University, when I was asked to prognosticate about the Asian security environment in 2050.

As Neils Bohr is reputed to have said, prediction is difficult, especially about the future. (He was half right, as we’ll see below.) But at least this was a topic on which I wasn’t handicapped by any pretence of being an expert, which would’ve increased my chances of being wrong. So I started off thinking about the lessons of history; how I would’ve done had I been asked in 1910 to talk about the European security environment in 1950. I would’ve started with the status quo; in 1910, the major powers would be those in the first column of the table below.

In 1910, I’d know about aeroplanes and submarines—and the experts of the time would assure me that while they’ll likely be of some marginal utility in warfare, they’ll be unlikely to replace, or even seriously rival, tried and tested military systems such as the newly commissioned HMS Dreadnought. And I’d know about the political and economic theory of Marx and Engels. But even if I read widely, I’d have no way of knowing about the atomic nucleus, the discovery of which was announced by Rutherford a year later.

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By 1950, the power structure of Europe looked like the second column of the table, and the USA and USSR—the latter now firmly a communist state—were both nuclear powers. What had been a concert of European royal houses with complex and intertwined security guarantees and alliances had become a bipolar, politically charged nuclear-armed standoff. There’s no reasonable prospect of being able to predict a change of that sort—although H. G. Wells gave it a red hot go.

Table: Key European players and security relationships in 1910 and 1950

1910

1950

Austro-Hungarian Empire  United States
British Empire Soviet Union
France NATO
German Empire
Italy
Ottoman Empire (in decline)
(Tsarist) Russia

There are two notions we need to understand the transition between 1910 and 1950. The first is that extrapolation—the basis for many predictions—is likely to give an accurate prediction only up to a point of dislocation. That is, up to a major upheaval which fundamentally alters the strategic calculus and invalidates working assumptions. WWI certainly fits that description; the pre-war world, for all intents and purposes, ceased to exist. The second important observation is that factors on which future developments might critically depend can be in the unknown category. (And of either the known or unknown variety.)

We also need to guard against hindsight bias when looking back in history for lessons about prediction. Knowing what happened, we can construct a narrative thread that links the Concert of Europe through WWI to the Treaty of Versailles, on to the collapse of the Weimar Republic, to the rise of National Socialism in Germany, and so on. There’s no shortage of arguments between historians about the details or the significance of individual events, but there’s (largely) a consensus about the causality.

But we’re only so ‘sure’ about that because those events actually happened. There’s no way to run counterfactual simulations to see what would’ve happened if some things had transpired differently. For example, we can speculate about the evolution of Europe after 1919 had the Versailles negotiations produced a less punishing outcome for Germany, but that’s all we can do. Alternative pasts are unknowable. Former US Defense Secretary and sometimes philosopher Donald Rumsfeld summed the situation up neatly with this observation:

I would not say that the future is necessarily less predictable than the past. I think the past was not predictable when it started.

So when we try to look forward to 2050, we do so with unwarranted confidence that we understand the causal patterns of the past. There might well be factors that will play a critical role in the future that we’re currently only dimly aware of or even can’t know now. It’s likely that any predictions made today—even by non-experts who’re more likely to be correct—will hold only up to the next dislocation. If we knew the chapter headings in the future history books, we’d be much better placed.

Of course, that doesn’t mean we should throw up our hands and declare thinking about the future to be hopeless. Rather, any hedging or shaping strategies we come up with need to accept the limitations of prediction and contain enough flexibility to adapt when the unpredictable future becomes the (somewhat) less unpredictable past. You can read what I think that means for the future submarine program here.

Andrew Davies is senior analyst for defence capability and director of research at ASPI. Edited image courtesy of Flickr user Michael Heilemann.

For an expansion on the ideas in the post, see Known unknowns: uncertainty about the future of the Asia-Pacific by Andrew Davies and Mark Thomson.