China may provide cheaper arms

"India would, therefore, have to go in for modernisation and costs would go up," says the report by Dr Uday bhanu Singh, a research fellow at the Institute of Defence Studies and Analyses which brings out the review.This new security scenario will arise from various factors, including India’s dialogue partnership of the Association of South East Asian Nations (Asean) and membership of the Asean Regional Forum (ARF), Dr Singh says.India shares borders with two countries, China and Pakistan, which are not only nuclear powers but have an ongoing programme of nuclear cooperation.All this will have an impact onIndia’s security concern with respect to China leading to the emergence of a new security scenario marked by a shift in arms trade, he says while analysing the strategic implications for India of the East Asian economic crisis.

India shares the ARF forum with China. Pakistan’s attempts to join the forum have not succeeded and it remains at the sectoral-dialogue partner level. Japan’s attempts to invite Pakistan at an Asean meeting in the "post-Pokharan context failed miserably," the author says.

Analysing the strategic impact of the economic crisis within South East Asia (SEA), he says there will be a shift in the regional balance of power."This has the potential to strengthen China while Asean is still under the weather. China’s military modernisation continues while the military modernisation of SEA has been stalled."

The South East Asian region had in recent years witnessed significant arms acquisition, especially for air and maritime defence.

Now financial constraints have managed to achieve whatthe arms control advocates were unable to accomplish.

However, it is a source of concern for the major arms manufacturers. It has increased the competition among American, European and Russian arms manufacturers.

It is also troubling the US Defence department which has in the past been able to keep its arms acquisition costs low due to the economies of scale which it could assure American weapons manufacturers, Dr Singh says.The Pentagon spends about $ 45 billion on weapon procurement and it is also responsible for controlling arms exports. Of a total of $ 14 billion of American arms exports, Asia accounts for only about three to four billion dollars, but it is the fastest growing market.

In the face of funding bottlenecks, Indonesian companies have begun to look outward for collaborative ventures. Indonesia has opened discussions with India’s Hindustan Aeronautics Limited (HAL).

Thailand, on the other hand, faces a penalty of $ 130 million if it cancels the purchase of eight Boeing FA18CDS. Defenceexpenditure has declined, which has adversely affected the American, European and Russian arms manufacturers, he says.

South Korea’s defence budget is expected to decline and it would find it difficult to match it with North Korea’s. It has also been forced to postpone its plans for power projection. It has postponed procurement of the next generation F-X fighter and airborne early aircraft. Dealing with implications for terrorism, Dr Singh says the economic meltdown could be felt in the rise of terrorist activities as regional governments are unable to focus their attention on terrorist activities on their borders because of their preoccupations at home.

On implications for drug trafficking, he says already this region is one of the three drug growing areas of the world. When neighbouring countries are in an economic crisis, the trade in drugs and small arms becomes all the more compelling and profitable.