Alliance management: spending as strategy
24 Jun 2016|

Image courtesy of Flickr user John Carkeet

If you aren’t talking dollars, you aren’t talking strategy.’ While that well-known Arthur Tange saying is often used in the context of defence budgets, it can also be applied to alliance management.

One of the most interesting takeaways from Peter Chalk’s fine new ASPI report on the US ‘rebalance within the rebalance’ to Southeast Asia, was the increased size of US Foreign Military Financing. At the 2014 Shangri-La Dialogue, then-Defence Secretary Chuck Hagel announced the US would increase financing by 35%. As Chalk details, November 2015 saw the US announce a $140 million package for Southeast Asia, with allies such as the Philippines getting additional funds for maritime domain awareness and the construction of training and logistic bases.

Simply giving money to allies is never a popular strategy, and in an era of Donald Trump demanding that ‘the countries we defend must pay for the cost of this defence‘, it’s an even tougher sell. Still, the point at which the Obama Administration’s ‘Deep Engagement’ philosophy and counter ‘Offshore Balancing’ clearly converge is building up the capacity and strength of US allies and partners. The easiest and possibly most effective way to do that is simply to give them cash.

There are plenty of precedents for such a policy. Financing the weaker side was a fundamental part of England’s balance of power strategy over the 17th and 18th centuries—for instance, supporting the Grand Alliance against France in the 1680s. Likewise the US spent 17% of its total costs in World War Two helping Russia, the UK and other allies through the Lend Lease program.

In both cases that approach was partly taken because of the challenges of supplying forces to remote theatres. Yet it also stemmed from a recognition that sometimes those on the ground know their own needs better than outsiders do.

Indeed, many foreign aid and domestic welfare workers are increasingly coming to the same conclusion. At its heart, poverty stems from a lack of money. Though we all remember the ‘teach a man to fish’ parable, sometimes it’s better to just give others resources and let them decide how to use them. Inevitably that will lead to some moral hazard problems and waste or corruption. But what’s the point of spending decades trying to improve the quality of Asia’s militaries if their small size will be the central problem in a future conflict?

To do that properly, the US would have to substantially increase the Foreign Military Funding it makes available. But it wouldn’t need to be endless. Power is of course relative, and there’s no way the US can fund its own $600 billion defence budget, as well as bring the rest of the region up to anywhere near China’s $200 billion defence budget.

But the US doesn’t need to do that. Countries either can or can’t have strong surveillance of their territory and landmass. Countries either can or can’t provide ready response forces to immediate crisis situations. Countries either can or can’t resupply troops they’ve located on the remote edges of their territory—or in contested environments. As Israel’s experience shows, moderate consistent support from outsiders can help countries build viable defence industries and establish substantial military capacity.

While many have worried about crowded sea lanes in Asia, it’s still remarkable how few craft most nations have. When it comes to large combatants (frigate-sized or larger), Indonesia has nine large combatant ships. The Philippines has five, Malaysia four and Vietnam just two. For small, Corvette-sized combatants, Indonesia has 26, Vietnam 24, the Philippines nine and Malaysia seven. Compare that to China’s 79 large combatants and 107 small combatants. Or China’s 64 submarines, versus Vietnam’s three.

Building up those forces won’t solve everything. As Nick Bisley rightly points out, the US–China clash is ultimately a political dispute about rules, order and influence in Asia. Most of the day-to-day changes which obsess us are peripheral to solving those dilemmas.

But the stronger Asia is at managing its own affairs, the less politically sensitive the US and allies will be about China trying to create some elbow room. A region where countries have some comfort in their basic protection will be far less worried about slippery-slope arguments about territorial change. That still leaves perplexing identity, history and resource issues, but it does help allay some of the more fundamental concerns.

Perhaps the strongest reason why the US isn’t going to lose its global position in the hierarchy is because of the strength of its economy. It’s time to put that strength to greater work on behalf of US interests. The TPP is part of the story, but it won’t do it alone. The simplest answer may also be the most direct. If the US wants to help Asia get stronger, if it wants allies who can do more on their own, then maybe the simplest answer is to show them the money.