Numerous members of the Association of Southeast Asian Nations (ASEAN) are currently engaged in the active modernization of their armed forces. These initiatives stem not only from the need to replace obsolete weapon systems, but are also driven by the escalating uncertainty in global and regional geopolitics, notably the intense competition between the United States and China. Given the evolving geopolitical dynamics, there is increasing awareness among countries in the region about the importance of having a robust and technologically advanced military. This ongoing trend presents a unique and opportune moment to reinvigorate the idea of bolstering regional defense industry cooperation.
There are clear benefits for Southeast Asian states in realizing this idea. Currently, ASEAN countries find themselves heavily dependent on arms imports from outside of the region, especially for major weapon systems such as warships, submarines, fighter jets, and battle tanks. This dependence poses strategic challenges, as changes in the export policies and national priorities of major arms suppliers could seriously compromise the autonomy and hamper the military modernization of ASEAN militaries.
This dependence has been highlighted by the ongoing global arms production backlog that followed the Russian invasion of Ukraine, and has been exacerbated by major powers’ decision to prioritize the replenishment and expansion of their own stocks and those of their close allies.
This is also evidenced in the increasing challenges that Southeast Asian governments face in doing business with Moscow and keeping their Russian-made weapon systems operational alongside the growing number of sanctions and export controls that Western nations have imposed on Russia. This stands out as one of the primary factors behind Indonesia’s decision to forego its plan to buy Su-35 fighter jets from Russia. Instead, Indonesia, which prefers to diversify its sources of arms in order to prevent exclusive reliance on any one major power, has opted to enhance its strategic partnerships with France and Turkey, to access major defense products such as Rafale fighter, Scorpene Evolved submarine, and ATMACA anti-ship missile.
Furthermore, overreliance on imported products and services diverts substantial financial resources from ASEAN economies, hindering internal development and the potential growth of the regional defense industry. In addition, a pan-ASEAN defense industry partnership would have the potential to address challenges related to economies of scale and limited research and development capabilities. This potential has been exemplified by the joint development and procurement programs frequently observed in European Union (EU) countries. Furthermore, fostering defense industry collaboration has the added benefit of boosting interoperability and trust among ASEAN armed forces.
Of course, there are some significant hurdles to promoting region-wide defense collaboration. First and foremost is the willingness to work together in a sector characterized by high levels of secrecy and political sensitivity. This includes making adequate adjustments to existing bureaucracies and regulations, specifically those related to defense technology security, good governance, and trade protectionism.
One should also consider the fact that Southeast Asian countries exhibit varying domestic political dynamics, threat perspectives, and national security priorities, making it challenging to align their defense industry objectives. While some countries, especially Cambodia and Laos, may prioritize land-based defense capabilities due to internal strife and geographic conditions, others, such as Indonesia, Singapore, and the Philippines, have placed more focus on air and naval power.
Moreover, amid its escalating civil war and other post-coup crises, Myanmar’s participation in regional arms development and production initiatives is bound to provoke heightened ethical and political concerns.
Another obstacle lies in the substantial disparity in ASEAN countries’ governments’ capacity and willingness to allocate funds to the defense sector. For example, despite being the smallest country in the region, Singapore has consistently maintained its largest defense budget since the late 1990s or early 2000s. World Bank data also shows that since 2017, the city-state has stood alone among ASEAN countries, with an annual military expenditure exceeding $10 billion. In contrast, despite having a territory approximately eight times larger than Singapore, Brunei Darussalam has never allocated a defense budget surpassing $500 million, except for the year 2014.
Furthermore, despite a significant rise in military spending since the start of the millennium, Jakarta has yet to achieve its goal of allocating at least 1.5 percent of its GDP, equivalent to around $20 billion, based on the country’s economy in 2023. Additionally, while Singapore and Indonesia await the arrival of the F-35s and Rafale fighters they have ordered, Malaysia has thus far only succeeded in purchasing light combat aircraft to upgrade its aging fighter jet fleet.
Collectively, the region also demonstrated limited fiscal capacity. According to the Stockholm International Peace Research Institute (SIPRI), annual military expenditure in the region increased by 13 percent to $43.1 billion between 2013 and 2022. Yet, this figure merely constitutes 1.9 percent of global military spending.
The good news is that the groundwork has been laid for the region to foster multinational cross-border defense industry collaborations. During the fifth ASEAN Defense Ministers Meeting held in Jakarta in May 2011, Southeast Asian countries adopted a Concept Paper on the Establishment of ASEAN Defense Industry Collaboration. The initiative aims to encourage project collaboration, boost intra-ASEAN trade in defense products and services, increase ASEAN’s technological and industrial competitiveness, and create incentives that would facilitate regional defense industry growth. Yet, after more than a decade, implementation of the concept paper remains slow.
Nonetheless, ASEAN countries have demonstrated their ability to mutually support defense needs at bilateral levels. For instance, Indonesia’s state-owned shipbuilder, PT PAL Indonesia, is currently constructing two landing platform docks for the Philippine Navy.
Another Indonesian company, PT Dirgantara Indonesia, has secured a contract to supply six NC-212i light transport aircraft to the Philippine Air Force. The state-owned aircraft manufacturer has also undertaken the upgrading of three CN-235-220 aircraft for the Royal Malaysian Air Force.
Moreover, over the years, Singapore’s ST Engineering has authorized Indonesia’s PT Pindad to produce its CIS 50MG Machine Gun and 40MM Automatic Grenade Launcher. Until last year, ST Engineering continued to provide maintenance, repair, and overhaul (MRO) services to the Indonesian Air Force’s C-130 aircraft fleet.
Similarly, Vietnam’s Helicopter Technical Services Corporation (Helitechco), has serviced the Indonesian Army’s Mi-17V helicopters. The two countries have also discussed potential MRO cooperation for their Russian-made Su-27/30 fighter aircraft.
Ongoing and upcoming unilateral procurement plants can help stimulate region-wide defense industry cooperation. For example, Malaysia’s plan to locally assemble 14 FA-50 light combat aircraft from South Korea is said to open up the opportunity for the country to become a regional MRO hub for the platform. This holds significance as the same variants are presently in operation in the Philippines, Indonesia, and Thailand.
Likewise, should the offer from France to locally construct two Scorpene Evolved submarines in Surabaya, East Java, be accepted, Indonesia would be the sole ASEAN nation capable of domestically constructing modern submarines. This could benefit Malaysia, which already operates two Scorpene boats, and the Philippines, if Manila chooses a French option in its submarine procurement program.
All things considered, there exists a multitude of potential benefits and opportunities for ASEAN nations to integrate their defense industries. Given the existing obstacles, a targeted approach that focuses on shared needs and platforms would serve as a feasible starting point. Successful collaborations on smaller projects, whether in terms of cost, duration, number of participants, and/or scale, could establish trust and demonstrate the value of cooperation. This, in turn, would pave the way for larger initiatives in the future. If executed well, ASEAN would benefit from a more self-reliant security community, thereby reinforcing the organization’s centrality.
The views expressed in this article are personal.
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