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Military Modernization and Capacity Building in the Philippines and Vietnam; By Carlyle A. Thayer

, dated February 7, 2017

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C3S Article no: 00010/2017

Courtesy: Centre for Strategic and International Studies (CSIS)

Introduction

This paper focuses on force modernization and capacity building in the Armed Forces of the Philippines (AFP) and the Vietnam People’s Army (VPA) from the 1990s to the present. This paper is divided into five parts. Part one provides a historical background to force modernization in both countries during the period from the 1990s to around 2010 and the role of maritime disputes in the South China Sea as one of the main drivers. Parts two and three discuss current force modernization and capability building in the AFP and VPA, respectively, in the period from 2010 to the present with a focus on the South China Sea. Part four discusses the role of the United States in capacity building in the Philippines and Vietnam. Part 5 offers a summary and conclusions.

Part 1 Background

The Philippines. The Constitutions of the Republic of the Philippines mandates that government spending on education must be greater than government expenditure on defence. At the time Fidel Ramos served as president (1992-98) the AFP was largely focused on domestic counter-insurgency.

In late 1994/early 1995 China took control of Mischief Reef and promptly built a small structure on it. The Philippines was now faced with an external threat that AFP was ill equipped and trained for. Up until the termination of United States leases on military bases in the Philippines, such as Subic Bay and Clark Air Force Base in 1991-92, the Philippines relied on the U.S. to provide defence against external threats.

In 1995 President Ramos sought to transform the military through the AFP Modernization Act. In October 1998, during the administration of Joseph Estrada (1998-2001), China expanded is presence on Mischief Reef by erecting three octagon-shaped structures and two two-story concrete towers. The towers housed electronic intelligence equipment and radar and bristled with satcom and HF antennae. In 1999 the Philippines beached a World War 2 era Landing Ship Tank, the BRP Sierra Madre, on Second Thomas Shoal to preempt any Chinese move to repeat its actions on Mischief Reef.

Despite this the Estrada Administration and the subsequent administration of Gloria Macapagal-Arroyo (2001-2010) continued to give priority to internal security. According to Richard Javad Heydarian, the 1995 AFP Modernization Program failed due to bureaucratic corruption, under investment, misallocation of funds and priority to counter-insurgency.[1]

The Philippines relied mainly on Excess Defense Articles, Military Assistance and Foreign Military Sales programs run by the United States to purchase weapons and equipment for external defence.

Vietnam. In the period from the reunification of Vietnam in 1975-76 to 1989, the VPA was heavily engaged in counter-insurgency operations against the Khmer Rouge in Cambodia, and defending its northern border against an attack by the People’s Liberation Army. The VPA was overwhelmingly a ground force supplemented by an air force capable of conducting ground attacks and air defense. The VPA Navy was largely a coastal force.

In March 1988 Chinese naval forces fought and won a naval skirmish against the VPA Navy in the waters near Johnson South and Fiery Cross reefs. This led to the lodgment of PLAN troops who erected structures on these features (later they were transformed into artificial islands in 2014-15).

In September 1989 Vietnam withdrew its last formed military units from Cambodia and in November 1991 normalized its relations with China. The VPA went through a period of massive demobilization.

In 1992 China passed a Law on Territorial Sea and Contiguous Zone that laid claim to sovereignty over the Paracel and Spratly island archipelagoes.[2] Both archipelagoes were also claimed by Vietnam. VPA forces in fact seized several features in the Spratly islands in 1975 from the Republic of Vietnam (South Vietnam) and were permanently garrisoned there from that time.

Chinese assertiveness in the South China Sea in the early to mid-1990s led Vietnam to undertake its first steps towards modernizing its navy and air force for operations in the maritime environment of the South China Sea. The VPA Navy was gradually transformed from an inland and coastal defense force into a green water navy.

In 1994 and 1996 China and Vietnam became embroiled in disputes over oil exploration within Vietnam’s Exclusive Economic Zone. This included a confrontation between Vietnamese naval ships and Chinese escorted exploration vessels in the Vanguard Bank where China awarded an oil exploration contract to the Crestone Energy Corporation headquartered in Boulder, Colorado.

Towards the end of the 1990s the Vietnamese government announced a series of planned acquisitions of modern platforms and weapon systems and slowly built up a modest naval and maritime air capacity to monitor its territorial waters, continental shelf and Exclusive Economic Zones.[3] Vietnam also took steps to develop its national defense industry capacity, with an initial priority on maritime capabilities, in partnership with Russia and India in technology transfer and co-production arrangements.

The Russian Federation is Vietnam’s major source of “big ticket” military weapons and equipment procurements. But Vietnam has also turned to India and other countries for assistance in modernizing its air force and navy.

In 1994, responding to South China Sea contingencies, Vietnam signed its first major arms sale contract with Russia since the collapse of the Soviet Union. In October 1998 defense ties were taken to a higher level with a follow on agreement that provided a framework for continuing and future Russian arms sales and support to Vietnam. The bilateral defense relationship was further strengthened during the February/March 2001 visit by President Vladimir Putin to Vietnam when the two sides raised bilateral relations to a strategic partnership, Vietnam’s first such agreement.  Both sides agreed to ‘strengthen their co‐operation in military supplies to meet Vietnam’s security demands’.[4]

Air Force Modernization. Between 1994 and 2004, Vietnam acquired seven Su‐27SK Flanker B single‐seat aircraft, three Su‐27UBK Flanker C two‐seat trainers, and two Su‐30Ks. Vietnam’s Su-27s and Su30s were later upgraded so they could operate the Kh‐31 (AS‐17) anti‐ship missile and the Vympel Kh‐29 (AS‐14) and Kh‐59M (AS‐18) air‐to‐surface missiles (See Table 1).

Between 1996 and 1998, Russia upgraded thirty‐two single‐seat Su‐22M4 and two twin‐seat Su‐22UM3 ground attack aircraft. In January 2009 Vietnam placed an order for eight Su‐30MK2 fighters from Rosoboronexport for delivery in 2010‐2011.

In March 2000, India and Vietnam signed a major Defense Cooperation Agreement (DCA) that included provision for overhauling Vietnam’s fleet of MiG‐21 aircraft and training assistance for Vietnamese fighter pilots and technicians. In October 2006, India supplied Vietnam with a number of spare parts for its MiG‐21 combat aircraft.

Between 1996 and 2005 the Ukraine sold Vietnam ten L‐39 trainers,  six MiG‐21 UMs, and three Su‐22 combat aircraft.[5] In 2006, Vietnam purchased forty second hand Sukhoi Su‐22M4 fighter-bombers from Poland’s Profus Management.[6] In 2004, Vietnam acquired five SU‐22 UM3 combat aircraft from the Czech Republic including spare parts and ammunition. Vietnam then reached a deal with the Ukraine to upgrade a number of these aircraft so they could serve as platforms for anti‐ship missiles.

Air Defense Modernization.  Between 2000 and 2004, according to Russia’s annual reports to the UN Register of Conventional Arms UNROCA, it sold ‘8 missiles and missile launchers’ and ’20 missiles and missile launchers’ to Vietnam.  In August 2003, Russia agreed to supply Vietnam with two batteries of the highly advanced S‐300PMU1 surface‐to‐air missile systems (see Table 1). In 2005, Vietnam reported to UNROCA that it had imported twelve missile launchers and sixty‐two S‐300 missiles. Defense industry sources confirmed that one S‐300PMU1 battery of twelve missile launchers and sixty‐two missiles was delivered in August 2005. The S‐300 is regarded as one of the world’s most effective all‐altitude regional air defense systems.

 

Table 1

Vietnam Missile Procurements, 1995-2012

1995 75 R-73/AA-11 SRAAM Su-27 combat aircraft
1996 20 P-15M/SS-N-2C anti-ship missiles Tarantul-1 FAC
1996-99 80 Strela-2/SA-7 portable SAM For Tarantul-1 FAC
1999 20 P-15M/SS-N-2C ASM Taramntul-2 FAC
1999-2014 400 Igla-1/SA-16 portable SAM BPS-500, Svetlyak PC and Tarantul FAC
2001-05 30 Kh-35 Uran/SS-N-25 anti-ship missile BPS-500 FAC
2002 50 Igla/SA-18 portable SAM  
2004 50-73/AA-11 SRAAM Su-30 combat aircraft
2004 100 Kh-29/AS-14 Kedge ASM  
2004 20 Kh-31A1/AS-17 ASM/ARM Su-30 combat aircraft
2005 2 S-300PMU-1/SA-220A SAM  
2005-06 75 48N6/SA-10D Grumble SAM  
2008-14 400 Kh-35 Uran/SS-N-25 ASM Gepard frigates and Tarantul FAC
2009-11 Two K-300P Bastion-P Coastal defence system
2009-11 40 Yakhont/SS-N-26 ASM Gepard frigates Kashtan CIWS
2010-12 250 R-73/AA-11 SRAAM Su-30MK2
Source: Stockholm International Peace Research Institute Arms Transfer Data Base

In May 2002, Vietnam and the Ukraine signed an agreement on military‐ technical cooperation up to 2005. Under the terms of this agreement the Ukraine agreed to provide assistance to Vietnam to upgrade its air defense, including radar, communications and surface‐to‐air missiles. In 2008 Vietnam acquired four Kolchuga passive sensor systems from the Ukraine capable of identifying and tracking land, sea and air threats.[7]

Naval Modernization. Vietnam is clearly seeking to improve its capacity to monitor its territorial waters and Exclusive Economic Zone, project naval power into the South China Sea to protect its key offshore oil and gas platforms and the features that it occupies, and develop anti‐submarine warfare (ASW) capabilities to meet the potential threat posed by the growing number of conventional submarines operated by China and other regional states. Vietnam’s naval procurements appear aimed at developing modest anti‐shipping, anti‐submarine warfare and mine counter‐measure capabilities.

Since the mid-1990s Vietnam has gradually modernized its navy through the acquisition of surface combatants and a small flotilla of conventional submarines all armed with variety of missiles including cruise missiles.

Surface Combatants. Between 1996‐1999, Vietnam received four modified Tarantul 2 corvettes from Russia. The ships were armed with twin launchers for the SS‐N‐2D Styx anti‐ship missile, Igla surface‐to‐air missiles (SAMs), and deck guns.

In December 2002, Russia’s Almaz Central Marine Design Bureau delivered two Type 14310 Svetlyak‐class inshore patrol boats for use by the Coast Guard. In 2006, Vietnam ordered another four Svetlyak‐class patrol craft.

In March 2004, Vietnam signed an agreement for two Tarantul V (Project 1241.8) corvettes armed with SS‐N‐25 (Kh 35 Uran) missiles. The modified Tarantul V is sometimes referred to as Molinya. They were delivered in late 2007.

Vietnam then reached agreement in December 2006 with Rosoboronexport for the purchase of two Gepard‐class (Project 11661) guided missile frigates. This deal was estimated at U.S. $300 million. The construction of both frigates commenced in 2007.

In early 2008 Vietnam and Russia signed a contract for the delivery of several ship‐building kits and related weapons systems for domestic assembly in Vietnam’s Hong Ha shipyard. Reportedly the kits contain a mix of vessels for the navy and coast guard. The contract was valued at U.S. $670 million.

Under the terms of the March 2000 DCA, the Indian Navy also agreed to repair, upgrade and build fast patrol craft for the Vietnamese navy. In June 2005, the Indian Navy transported 150 tons of spares to Vietnam for its Petya frigates and Osa‐II fast attack missile craft. In December 2007, during the visit to Hanoi by India’s Defense Minister, A. K. Anthony, who was accompanied by a delegation that included senior navy officers, India agreed to supply Vietnam with five thousand essential spares for its Petya‐class anti‐submarine boats in order to make them operational.

Conventional Submarines. In 1997, Vietnam acquired two Yugo‐class midget submarines from North Korea that it subsequently refitted. The acquisition of Yugo‐ class subs represented the first phase in implementing Vietnam’s long‐ standing interest in developing an undersea‐warfare capability.[8]

Under the terms of the March 2000 DCA between India and Vietnam, the Indian Navy agreed to provide training to Vietnamese naval personnel including submariners. In October 2002, Vietnam officially asked India to provide submarine training.

In 2009, in a major development, Vietnam announced that it would procure six conventional diesel powered Varshavyanka-class or Enhanced Kilo-class submarines from Russia.

Maritime Surveillance and SAR. Given Vietnam’s long extended coastline its security forces have a requirement for maritime surveillance and search and rescue capabilities.

In October 2003, Vietnam’s Ministry of National Defense and Profus Management, a Polish foreign trade company, signed a contract for the purchase of two new Polskie Zaklady Lotnicze (PZL) M28 Skytruck short take off and landing aircraft. Two Skytrucks were delivered in January 2005 and were configured for transport and passengers with provision for medical evacuation equipment. In February 2005, it was reported that Vietnam had purchased four PZL Swidnik W‐3RM Anakonda maritime search and rescue helicopters. The Anakonda was equipped with Wescam forward looking infrared turrets.

In mid‐ 2008 Vietnam and the Swedish Space Corporation signed a deal to acquire three Spanish EADS‐CASA C212 Series 400 maritime control aircraft equipped with MSS 6000 side looking radar. The cost was estimated at €30 million.

National Defense Industry. Vietnam does not have a modern national defense industry and its capacity is generally limited. Vietnam has sought assistance from abroad. In May 2002, Vietnam and the Ukraine reached agreement on a significant program of military‐technical cooperation up to 2005, including assistance from the Ukraine in developing naval test facilities and arms co‐production.

Vietnam’s national defense industry, however, is capable of assembling navy patrol boats from kits, production of light aircraft, shipyard repairs, depot‐ level reverse engineering of aircraft spares. For example, Vietnam entered into co‐production arrangements with Russia to assemble KBO 2000 corvettes and BPS‐500 missile patrol boats. Vietnam successfully assembled two BPS 500 (Project 12418) missile corvettes from a kit provided by a Russian supplier. However, more ambitious plans to build a Russian‐ designed Project 2100 corvette have been abandoned because the task was beyond local technical capabilities.

Between June 2003 and September 2005, Vietnam manufactured three A‐41 (VNS‐11) three‐seat amphibious aircraft for use in search and rescue and forestry patrols.[9]

Vietnam has sought offset agreements involving technology transfers in several of its arms procurement deals. In February 2002, the Russian defense enterprise LOMO announced that it negotiated a contract with Vietnam to assist in the transfer of technology so Vietnam could produce the Igla low altitude surface‐to‐air missile (SA‐18 Grouse). Russia and Vietnam also signed an agreement that licensed the production of missile launchers. In November 2006, Russia and Vietnam reached agreement on technical assistance in the production of Yakhont ship‐to‐ship missiles.

Part 2 Force Modernization and Capacity Building in the Philippines

In 2011, in response to Chinese assertiveness in the Philippines’ EEZ and Kalayaan Island Group, the Aquino Administration drew up a new defense strategy focused both on internal security operations and external territorial defense. In March 2011, Congress allocated $450 million for defense spending or about one per cent of GDP.

In September 2011, President Aquino announced that 4.95 billion pesos would be allocated to top up the defense budget.[10] These funds were earmarked for the purchase a naval patrol vessel, six helicopters and other military equipment in order to secure the Malampaya oil and gas project. Between 2010-12 $648.44 million was allocated to modernizing the AFP.

The major turning point in the force modernization of the AFP came in December 2012 when the Philippine Congress passed the Revised AFP Modernization Act and extended the program for fifteen years. The aim of this program was to task the AFP with territorial defence by developing a minimum deterrence.

The Revised AFP Modernization Act is the primary source of funds for arms procurements, while the annual defence budget covers salaries and entitlements for service personnel and maintenance costs for defence equipment. Table 2 below shows the marked rise in defence spending both in U.S dollar terms and as a per cent of GDP.

Force modernization of the AFP started from a very low level. Under the Aquino Administration’s shift to territorial defense and a minimum deterrent posture, the Philippine Navy has expanded modestly with the acquisition of two used Hamilton-class Ocean Patrol Vessels from the United States (with a third to come), five used Balikpapan-class Landing Craft Heavy from Australia, and one new Strategic Sealift Vessel Landing Platform Dock constructed by Indonesia.

Table 2 Philippines’ Military Expenditure, 1988-2012

Source: https://amti.csis.org/catch-up-in-manila-for-minimum-deterrence/.

The most significant force modernization development has been the Philippines acquisition of fix wing and rotary aircraft. In 2011, the Philippines acquired eighteen Italian SF-260 trainer aircraft. This was a significant development because the Philippines retired its entire combat air wing six years earlier. In 2015 the Philippines took possession of the first two of twelve South Korean FA-50 Golden Eagle FGAs with the remainder due by 2017. These aircraft will be fitted with EL/M-2032 combat aircraft radar sold by Israel. In 2016 the media reported that Japan might lease the Philippines with five Beechcraft TC-90 King Air training aircraft.

In 2014 and 2015 the Philippines vastly improved its ability transport military personnel, supplies and equipment throughout the archipelago through the acquisition of two C-130H Hercules transport aircraft from the United States, two C-212 transport aircraft from Indonesia, and three CN-295 transport aircraft from Spain.

Finally, the Philippines acquired a wide variety of rotary aircraft that adds to its capacity for transport, search and rescue and attack. Between 2011-13 the Philippines acquired twelve Bell-205/UH-1H helicopters from the United States,[11] five Bell-205/UH-1D helicopters from Germany, four light helicopters from France, eight W-3 Sokol helicopters from Poland and significantly ten-thirteen A-109K light attack helicopters from Italy.

The Philippines’ capacity for maritime domain awareness has been enhanced by the purchase of the TPS-79 MMSR air search radar from the United States in 2011 and three EL/M-2288 AD-STAR air search radars –from Israel in 2015.

Part 3 Force Modernization and Capacity Building in Vietnam

The VPA totals 482,00 main forces comprised of the army (412,000), navy (40,000) and air-defense air force (30,000). The armed forces also include a 40,000 strong paramilitary Border Guard and a reserve force estimated at five million.

In January 2011, at the eleventh national party congress, the Political Report listed among the objectives for the next five years “to further push the development of defense and security technology industry” and “to strengthen scientific research in military and security capable of defeating hi- tech wars from enemy forces.”

The Political Report identified modernization of the armed forces and defense industry as one of the five key national objectives for the next five years (2011-2016). Priority was assigned to ensuring “that the armed forces incrementally have access to modern equipment with priority being given to the navy, air force, security, intelligence, and mobile police forces.”

In his address to the eleventh congress Lt. Gen. Ngo Xuan Lich, head of the Vietnam People’s Army’s General Political Department, specifically identified “armaments, ammunition and technical means” as key priorities. Speaking on the sidelines of the congress, General Phung Quang Thanh, Minister of National Defense, included electronic and technical reconnaissance among the priorities for defense intelligence.

According to a Defense White Paper, issued by Vietnam three years after the eleventh congress, priorities for Vietnam’s defense industry include the maintenance, manufacture, improvement and upgrading of weapons and equipment.

Vietnam’s National Defense Industry. Vietnam has signed a wide number of Memoranda of Understanding (MOU) and DCAs with foreign states. These agreements reveal that Vietnam is seeking assistance, services and equipment acquisitions in six major areas: the storage, maintenance and upgrading of existing military equipment; modernization of platforms and equipment for the army, navy and air force; modernization of Vietnam’s defense industry; maritime logistics capacity in the South China Sea; mitigating the effects of natural disasters, notably flooding and storm damage, and search and rescue at sea; and finally training for future involvement in UN-endorsed peacekeeping operations.

Vietnam’s defense MOUs and DCAs usually contain general clauses on bilateral defense industry cooperation in five priority areas: promotion of defense research and technology transfer; co-production of weapons; maintenance, upgrading and repair; technical support; and personnel training.

Vietnam’s arms purchase contracts invariably include provisions for technology transfer as well as training and services. For example, Vietnam approached Russia and India for assistance in co-producing the BrahMos anti-ship cruise missile, and the repair and maintenance of naval vessels.

Vietnam also has supported a Malaysian proposal to promote defense industry cooperation among members of the Association of Southeast Asia (ASEAN) Vietnam and Indonesia have discussed co-producing fixed wing transports, maritime surveillance aircraft and multirole helicopters. Vietnam and the Philippines have discussed cooperation in the manufacture of various types of unspecified military equipment. Vietnam has approached Singapore for assistance in the safe storage of ordnance and munitions.

Table 3

Vietnam Arms Procurements, 2008 -2016

Air Defence Air Force Navy Coastal
2010-15 thirty-two Su-30MK/Flanker FGA aircraft Russia 2008-14 six Project 12418 Tarantul 5 FAC Russia 2009-11 two K-300P Bastion-P coastal defence system Russia
  2011 two Gepard-3 frigates Russia 2013 three EL/M-2088 AD-STAR air search radar Israel
  2011-12 six Projct-10412/Svetlyak patrol craft Russia 2014 ten EXTRA guided rocket/SSM Israel
  2013-16 six Project-636E/Kilo submarines Russia  
  2017 four Gepard-3 frigates Russia  
Source: Stockholm International Peace Research Institute Arms Transfer Data Base

In October 2011, President Truong Tan Sang made a state visit to India and requested Indian assistance in four areas: submarine training, conversion training for pilots to fly Sukhoi-30s, transfer of medium sized patrol boats, and modernization of port facilities at Nha Trang.[12] The local media reported that India was considering whether or not to sell Vietnam its BrahMos supersonic cruise missile.[13] In 2015 India offered Vietnam a $300 million line of credit to purchase warships built in Indian dockyards.

Vietnam’s defense industry is capable of constructing small naval patrol craft.  In 2011, for example, the Hong Ha defense shipbuilding company successfully launched Vietnam’s first indigenously constructed naval vessels, a 54-metre 400-ton fast patrol boat (Project TT400TP) and a 72- meter troop transport vessel. [14]  The patrol boat was based on a Russian design and constructed by Vietnamese engineers who had been sent to Russia to study shipbuilding.

In February 2012, Russia announced it would co-produce a modified Uran anti-ship missile (SS-N-25 Switchblade) with Vietnam.[15]  The modifications could enable Vietnam to fit the missile to aircraft, helicopters, ships and coastal batteries.

Arms Procurements. In November 2011, Vietnam announced a $3.3 billion defence budget for 2012, a reported rise of 35% over 2010. According to IHS Jane’s Vietnam’s annual naval procurement budget has increased by 150% since 2008 to US $276 million in 2011. The naval budget was projected to rise to $400 million by 2015.[16]

Table 4

Vietnam Missile Procurements, 2011-15

2011 200 9M311/SA-19 SAM Su-30MK2
2011-12 80 Kh-31A1/AS-17 ASM/ARM (including Kh-31P anti-radar version  
2013-14 50 3M-54 Klub/SS-N-27 anti-ship MI/SSM (3M14E SS-N-30B land attack) Varshavyanka-class (Enhanced Kilo) submarines
Source: Stockholm International Peace Research Institute Arms Transfer Data Base

During 2010-15 (see Tables 3 and 4), Vietnam stepped up its force modernization program when it took delivery of additional Tarantul 5 corvettes, two Gepard-class guided missile frigates armed with Kh-35E anti-ship missiles with a range of 130 km and six Svetlyak-class missile Patrol Boats.[17]  In 2011, Vietnam beefed up its coastal defences by acquiring its second K-300P Bastion-P land-based anti-ship ballistic missile system. Vietnam also acquired Israeli Extended Range Artillery Munitions (EXTRA) – ballistic missiles effective beyond 150 km. During this same period Vietnam also took delivery of thirty-six Su-30MK2 multi-role jet fighters equipped with the Kh-59MK anti-ship cruise missile with a range of 115 km and five (of six) Varshavyanka-class submarines.

Vietnam has come to the end of its present five-year planning cycle (2011-15). Later this year new priorities for the next five years (2016-2020) will be announced when the Ministry of National Defense will issue an update of its last White Paper released in late 2009.

Part 4 The Role of the United States in Capacity Building.

The Philippines. Under the Enhanced Defence Cooperation Agreement the United States will step up the rotational deployment of military forces to five bases in the Philippines and joint exercises with the AFP to promote interoperability and capacity building.

Table 6

Source: https://amti.csis.org/catch-up-in-manila-for-minimum-deterrence/.

The U.S. has decided to provide the Philippines with a third U.S. Hamilton-class Cutter under its Excess Defense Articles program.

The U, S. Congress approved $425 million for the Pentagon’s Southeast Asia Maritime Security Initiative (MSI) over a five year period to be allocated to five countries – Indonesia, Malaysia, the Philippines, Thailand and Vietnam. Congress approved $49.72 million for disbursement in FY2016. Follow on disbursements total $75 million for fiscal year 2017; and $100 million each of fiscal years 2018, 2019 and 2020.

Of the $49.72 million allocated for 2016 the Philippines will receive $41 million or almost eighty-five per cent. The Philippines is therefore the largest recipient of U.S. maritime security assistance in Southeast Asia.

These funds are to be used for training and improvements in logistical bases for the Philippine Navy and Coast Guard, to improve the ability of the Philippines Air Force to conduct maritime operation and finally for naval maintenance, fleet upgrades, interdiction vessels, communications, and aircraft procurement.

For perspective, for 2016, $50 million is being set aside just for MSI alone, while the Obama administration announced last that the total amount of assistance it would provide for 2016 would be $140 million, a slight increase from the $119 million committed in 2015.

Vietnam. In 2007 the George W. Bush Administration amended the International Trafficking in Arms Regulations (ITAR) to permit the sale of non-lethal weapons to Vietnam on a case-by-case basis. Restrictions were kept in place on weapons and equipment that could be used by ground forces in crowd control. All lethal weapons and many military services remained banned.

The ITAR ban on the sale of weapons to Vietnam rankled Vietnamese leaders who thought it was discriminatory, a throwback to the Cold War, and an impediment to the full normalization of bilateral relations. For example, when Secretary of Defense Leon Panetta visited Hanoi in June 2012 the Vietnamese Defense Minister General Phung Quang Thanh requested that the U.S. remove all ITAR restrictions.

China’s decision to place the HD981 mega oil drilling platform in Vietnamese waters in May 2014 provoked a six-week confrontation between Chinese naval, maritime law enforcement and civilian tug boats and fishing trawlers and Vietnam’s Coast Guard and Fisheries Surveillance Force. China’s actions undermined strategic trust between Hanoi and Beijing and led to calls in Vietnam “to exit China’s orbit.” China’s actions created an opportunity for both Vietnam and the United States to step up cooperation in security and defense.

As a result of this crisis, Secretary John Kerry announced the partial lifting of the sale of lethal arms to Vietnam on a case-by-case basis in October 2014. Secretary Kerry indicated that such weapons would be supplied for maritime security and weapons of a defensive nature suitable for Vietnam’s Coast Guard. Vietnam still agitated for a full lifting of the arms embargo. Secretary Kerry announced that the United States would allocate $18 million to provide patrol boats for Vietnam’s Coast Guard. As noted above, with nearly eighty-five percent of the U.S.MSI going to the Philippines in FY2016, not much is left to fund equipment, supplies, training and small-scale construction in Vietnam.

In June 2015 Secretary of Defense Ash Carter and Minister of National Defense General Thanh signed a U.S.-Viet Nam Joint Vision Statement on Defense Relations. This document included twelve areas of defense cooperation. The fourth area read: “expand defense trade between out countries, potentially influencing cooperation in the production of new technologies and equipment, where possible under current law and policy restrictions.” This caveat was loosened when President Obama announced the full lifting of ITAR restrictions during the course of his visit to Vietnam in May 2016. Nevertheless, U.S. policy linking arms sales to Vietnam’s human rights remained in place.

The ball is now in Vietnam’s court. Deputy Minister of National Defense, Senior Lt. Gen. Nguyen Chi Vinh, revealed in an interview on the sidelines of the 2016 Shangri-La Dialogue that Vietnam had no immediate plans to request weapons or equipment from the United States.

The key to future arms and equipment sales likely lies in the Joint Vision Statement quoted above: “to expand defense trade between out countries, potentially influencing cooperation in the production of new technologies and equipment.” There are several niche area of potential defense trade including coastal radar, satellite and other communications systems, maritime logistics, maritime surveillance aircraft including unarmed drones, naval patrol craft, maintenance, and electronics. More problematic areas of defense trade include air defense missiles, air defense systems for naval ships, anti-submarine warfare technology and jet fighters.[18]

Vietnam has hosted two seminars with leading U.S. defense industries, including Lockheed Martin and Boeing. Lockheed Martin has promoted the possible sale of its Sea Hercules maritime patrol aircraft to Vietnam. Boeing has publicly indicated that it has capabilities in “intelligence, surveillance and reconnaissance platforms that may meet Vietnam’s modernization needs.” For example, Boeing could sell its maritime surveillance technology to Vietnam for installation on a business aircraft converted for maritime reconnaissance.

U.S. defense companies are likely to face competition from Japan, rumored to be offering its own maritime patrol aircraft, and South Korea and Europe where Vietnam is in the market to replace its MIG 21s that were paid off in 2015.

Part 5 Summary and Conclusions

Chinese assertiveness in the South China Sea in the 1990s motivated both the Philippines and Vietnam to embark on a modernization of their naval and air forces to respond to likely contingencies in the South China Sea. Both countries had to overcome the legacies of the past when their armed forces were focused mainly on internal security and counter-insurgency. The 1995 AFP Modernization Program was still born in the Philippines, while Vietnam took initial steps in the mid-1990s to convert its coastal navy into a green water force and to acquire fourth generation jet fighters capable of operating in the maritime domain.

Both Vietnam and the Philippines accelerated their force modernization efforts around 2010. Vietnam ramped up a modernization program that been underway for a decade and a half, while the Philippines began virtually from scratch. Vietnam acquired top of the line Su-30 jet aircraft, highly effective air defense missiles, coastal anti-ship missiles, and a growing number of surface combatants armed with cruise missiles. Most dramatically of all, Vietnam opted to develop a capability for undersea warfare by acquiring six Varshavyanka-class Enhanced Kilo-class conventional submarines. These are armed not only with heavy torpedoes and anti-ship cruise missiles but land attack cruise missiles as well.

Today the Vietnamese military faces very different missions and tasks than it did decade ago. The VPA must now protect its territorial integrity and national sovereignty in the South China Sea. This means that the relative role of the navy and air defense‐air force has become more important. Vietnam is following regional trends by modernizing its military forces step by step as its economy grows. Vietnam’s program of defense modernization is modest and aims to develop defensive capabilities needed in the new regional security environment.

Military modernization is very expensive. It is one thing to acquire new frigates, multirole jet fighters (Su‐30s), Kilo‐class submarines and anti‐shipping cruise missiles, but it is another thing to effectively integrate these new capabilities into Vietnam’s existing force structure. Also the on‐going expense of maintenance and upgrading will prove costly. Vietnam must give serious thought to restructuring its military forces to give priority to the navy and air defense‐air force, and reducing the size of the standing army. Finally, Vietnam needs to review the roles and missions assigned to the military with a view to divesting the VPA of non‐ essential missions and roles. The Border Guard, for example, could be turned over to another ministry. Non-essential military enterprises, which were slated for equitization in 2007, should be turned over to civilian control now that the impact of the Global Financial Crisis has waned. Vietnam’s military must concentrate on being modern and professional in an era of hi-tech warfare.

The Philippines force modernization program has achieved modest results. The Philippine Navy has developed the logistics and transport capacity to operate more effectively in its archipelagic waters. The acquisition of two and soon three former U.S. Coast Guard Ocean Patrol Vessels will provide the Philippine Navy with the capacity for longer maritime patrols. But they are lightly armed.

The Philippines has also made strides in improving its capacity for maritime domain awareness through the acquisition of coastal and air search radar. The acquisition of attack helicopters and fighter aircraft will enhance to a limited extent the ability to deter a potential opponent when they become fully operational and appropriately armed.

United States assistance though it’s various programs (FMS, Excess Defense Articles etc.) including the MSI will assist in capacity building in key areas. The Philippines stands to benefit the most because it is the largest recipient of U.S. funding.  But U.S. funds appear modest given the challenges that the Philippines – and the region – face.

 

[1] Richard Javad Heydarian, “Catch-up in Manila for Minimum Deterrence,” Asia Maritime Transparency Initiative, Center for Strategic and International Studies, March 18, 2015. https://amti.csis.org/catch-up-in-manila-for-minimum-deterrence/. Accessed July 19, 2016.

[2] China drove the South Vietnamese armed forces (Army of the Republic of Vietnam) out of the features they occupied in the western Paracels in January 1974.

[3] Carlyle A. Thayer, ‘Force Modernization: The Case of the Vietnam People’s Army,’ in Contemporary South East Asia, 19(1), June 1997, 1-28.

[4] Voice of Vietnam, Hanoi, September 28, 2008.

[5] In 1980, Vietnam acquired the first of twenty‐four Aero Vodochody L‐39C jet trainers from Czechoslovakia. But due to attrition over the years this number declined to eighteen by 2007. In mid‐2008 Vietnam acquired four second‐hand L‐39s from the Czech Republic and ten new Yak‐52 basic trainers from Rumania to replace inventory in its aging air training division.

[6] According to Australia’s Defence Intelligence Organisation, Vietnam ‘purchased 40 second‐hand Su‐22 attack aircraft’; DIO, Defence Economic Trends in the AsiaPacific 2007, 22.

[7] The Kolchuga is classified as an electronic support measure. It can simultaneously triangulate the position of up to thirty‐two targets on land, sea and air. It has an extended range and is less vulnerable to attack due to its passive operation. Each unit costs U.S. $27 million. See: Robert Karniol, ‘Slow advance for Viet army revamp’, The Straits, Times, February 9, 2009.

 

[8] Vietnam had previously expressed an interest in obtaining Kilo‐class conventional submarines from the Soviet Union. Reportedly a crew was in training when the Soviet Union collapsed and Mikhail Gorbachev cancelled the program. In 2008, Vietnam was reportedly in the market for second‐hand submarines from Serbia. This opportunity arose when Serbia and Montenegro split in 2006, leaving Serbia without a coastline. Vietnam explored the possibility of acquiring three full‐sized submarines and three midgets, all non‐operational. Serbia off loaded its fleet to Egypt.

[9] One of the planes was observed painted with military markings.

[10] Agence France-Presse, September 7, 2011.

[11] Some sources report that this number included eight Bell-412 utility helicopters.

[12] The Hindu, November 9, 2011.

[13] Business Insider, September 20, 2011.

[14] BBC Vietnamese Service, October 3, 2011.

[15] RIA Novosti, February 15, 2012.

[16] Quoted in The Economic Times, November 14, 2011.

[17] The Voice of Russia, June 22, 2011; BBC Vietnamese Service, August 24, 2011 and October 25, 2011; and Interfax-AVN, October 11, 2011.

[18] In 2002 Vietnam was reported considering bolstering its anti-submarine warfare capability by acquiring either the U.S. P-3 Orion or the Spanish Airbus Military C295; Aviation Week, February 17, 2012.

[Carlyle A. Thayer is Emeritus Professor, The University of New South Wales at the Australian Defence Force Academy, Canberra. Email: c.thayer@adfa.edu.au. All background briefs are posted on Scribd.com (search for Thayer). Thayer Consultancy provides political analysis of current regional security issues and other research support to selected clients.]

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