Monday, May 23, 2011

ASEAN Defense Industry Collaboration: Worthwhile but Difficult

The Indonesian and Malaysian defense ministers have proposed creation of the ASEAN Defense Industry Collaboration (ADIC) program to achieve economies of scale and eliminate redundancies in defense procurement in ASEAN.  This is a worthwhile goal, but just like other ASEAN projects, ADIC will face major external and internal obstacles.

Indonesian Defense Minister Purnomo Yusgiantoro noted that ASEAN spends about US$ 25 billion annually but remains a net importer of weapons. This, despite the fact that Thailand, Malaysia, Indonesia and Singapore have major defense industries, and in complimentary sectors.   Malaysian Defense Minister Datuk Seri Dr. Zahid Hamidi urged for a common ASEAN standard for defense procurement similar to what NATO uses.

The private sector would welcome a common ASEAN standard in the defense industry and has already pursued harmonization in other industries as well.  A major aspect of the AEC is the implementation of common ASEAN standards for industries such as pharmaceuticals.  

Yet factors that have delayed common ASEAN standards in non-defense industries could affect defense procurement as well.  Vested interests at the national level will be reluctant to support harmonization.  This happens everywhere in every industry.  The Boeing-Airbus airborne tanker saga is but one example and shows that even within NATO the clash of national and economic interests is not easy to manage.  In sectors such as automobiles and agriculture, ASEAN has experienced difficulty in managing economic integration due to strong domestic interests.

Defense has additional national security implications beyond normal economic considerations.  NATO has achieved harmonization of standards, and some intra-NATO cooperation in projects such as the Typhoon fighter, because of the decades-long external threat of the USSR.  Despite the reduced threat in Europe, cooperation continues because of budget limitations.  Will ASEAN be able to achieve defense cooperation without explicitly articulating the justification for such cooperation (e.g., China) and without the economic limitations faced by NATO? 

In short, ADIC is a worthwhile idea that illustrates how developing the ASEAN Political-Security Community and the ASEAN Economic Community can benefit ASEAN through reduced costs and improved capacities. However, the NATO experience indicates that this could be difficult without the strong external and internal factors that motivated defense cooperation in Europe.  Overcoming those difficulties will require major political commitment and follow-through by ASEAN’s leaders.