Watching the big boys play - Broadsword by Ajai Shukla - Strategy. Economics. Defence.

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Monday 6 March 2017

Watching the big boys play

As US and China joust for supremacy, India's lack of resources and clarity would keep it on the sidelines

By Ajai Shukla
Business Standard, 7th March 17

After being sworn in as America’s 45th president on January 20, Donald J Trump has trodden the promised tough line towards China, vowing to “build a military might so great… that none will dare to challenge it”. US conservatives are already drawing triumphal parallels with Ronald Reagan’s defence spending spree in the 1980s that induced the Soviet Union to spend itself into insolvency. However, rival superpower China, which can scarcely ignore the gauntlet Mr Trump has thrown down, has an infinitely more robust economy than that of the Soviet Union. How will Beijing respond to Mr Trump’s belligerence? What does this mean for India?

The starting point for any such analysis must be a closer look at whether America can actually muster the dollars needed for the unmatched military that Mr Trump promises. His request for an eye-popping $54-billion raise in defence spending comes after his predecessor, Barack Obama, followed up his troop pull-back from Iraq in 2010 by slashing defence spending from 4.7 per cent of US gross domestic product (GDP), to just 3.3 per cent of GDP --- a 22 per cent cutback that was unprecedented since post-Vietnam. Mr Obama followed that in 2011 by killing or cutting back on major weapons programmes, including the F-22 Raptor fighter, C-17 airlifter, multiple kill vehicle, kinetic energy interceptor, airborne laser and a combat search and rescue helicopter; saving America $487 billion over the coming decade but sharply eroding US combat power. In 2012, with the US military gasping for air, budget sequestration kicked the oxygen cylinder over by slashing tens of billions of dollars more from subsequent defence allocations.

Mr Trump’s requested hike will face serious opposition on Capitol Hill, given that those tens of billions would come from cutbacks to the Environmental Protection Agency and the State Department. Even if American legislators give their new president all he has asked for, that would still not suffice for the Pentagon’s multiple aims --- maintaining a credible military presence worldwide, continuing drone strike campaigns in terrorist hot-spots, while also “rebalancing to Asia” to counter China in the Asia-Pacific. Veterans like Senator John McCain have criticised Mr Trump for timidity --- for not demanding the resources needed to boost the navy from 274 ships to 350; and beefing up the air force by ordering the F-35 Joint Strike Fighter in numbers. The Wall Street Journal calls the US military a “hollow force”, pointing out that almost two-third of the navy’s backbone F/A-18 fighters, and three-fourths of the Marines’, are grounded and unfit for combat; the air force is short of 700 pilots and 4,000 maintenance personnel; only one-third of the army’s combat force is ready to deploy within 30 days, and the army is the smallest it has been since World War II, numbering just 470,000 personnel --- barely one-third the size of the Indian Army.

Nor is there much upside for Mr Trump in implementing populist campaign promises to arm-twist allies, like Japan and those in the North Atlantic Treaty Organization (NATO), to stop “free riding” and start “burden sharing”. While most NATO allies indeed violate their treaty obligation to spend at least 2 per cent of GDP on defence, there would be little benefit to Washington were the allies to meet these targets. As Stephen M Walt points out in a recent Foreign Policy article, NATO’s combined weight is already far greater than Russia’s --- its only conceivable enemy. NATO’s European allies are four times more populous than Russia, have a combined GDP that is 12 times bigger; and they already spend (not counting US and Canada) five times more on defence than Russia does. The problem clearly is not a lack of resources, but rather the absence of planning and coordination. Mr Trump will learn that Washington’s pocketbook and presence in NATO is an essential display of its commitment to the alliance, not a handout to ungrateful allies.

In contrast to Mr Trump’s braggadocio, Beijing has announced a defence budget hike of just 7 per cent next year, its lowest in decades. This takes China’s official defence budget to $174 billion, barely one-third America’s. Increase that by 50 per cent, which experts consider the undeclared part of China’s defence budget, spent on its strategic forces, research and defence production units. That places China’s real defence spending at $261 billion, less than half of America’s.

However, China compensates for its numerical and qualitative military inferiority by paring down its operations to the local and regional, eschewing the superpower obligations that stretch American forces thin. For example, America’s 19 flat-deck aircraft carriers (though it downplays nine of them as mere “amphibious assault vessels”) are scattered across the globe. China’s fewer carriers (it currently has one but intends to build four to five) would all be stationed in its vicinity, creating a measure of parity with the US carriers that could respond to an Asia-Pacific crisis.

Further, with significantly lower personnel costs and most of its defence kit developed and built in China, the People’s Liberation Army gets more bang for the buck than the Pentagon. Finally, Beijing’s defence spending is sustainable, amounting to just 1.3 per cent of its GDP (1.95 per cent factoring in undeclared expenses). China’s annual economic growth can sustain an annual 7 per cent defence hike, even a 10 per cent annual raise provided Beijing is willing to grow defence expenditure to above 2 per cent of GDP. The US, however, with an economy that is expected to grow at 2.4 per cent this year, can hardly sustain Mr Trump’s hikes year-on-year.

Meanwhile, by way of perspective, India’s defence budget for 2017-18 stands at $53.5 billion --- about the raise in US defence spending that Mr Trump wants this year. With this amounting to 2.14 per cent of our GDP, it is a political question whether the government can spend more and, if so, from where that money could be taken. More than half India’s budget goes on personnel costs, with less than a quarter earmarked for capital expenditure, i.e. new weaponry. With most of India’s weapons systems procured from abroad, India’s new kit works out significantly more expensive than China’s. As an entrenched superpower faces off against an emerging rival in our extended neighbourhood, New Delhi’s meagre resources, its non-implementation of “Make in India” and the lack of strategic clarity places us squarely on the sidelines. 


  1. I'm always impressed by the level of detailed knowledge in your articles

  2. Military spending can roughly be divided in to three categories.

    Staff Costs, paying the wages / pensions / benefits
    Capital Costs, buying new equipment
    Operating costs, actually operating the equipment

    The European members of NATO, with the exception of the UK, have unreasonably high staff costs.
    The UK has 150,000 regular personal in the armed forces, on a budget of 53bn euros.
    Germany, 177,000 on a budget of 37bn
    Spain, 132,000 on a budget of 7bn

    Spain has 53,000 Euros per man
    The UK 353,000

    Next comes Capital
    There simply isnt enough left, and what there is, is frequently poorly spent. The primary goal being propping up politically connected suppliers, rather than generating military equipment. And then making obscene purchases, or promises of such, to grab greater workshare of shared designs. Germany ended up cancelling 107 of 250 ordered Typhoons.

    And at the end of the tail comes operating costs.
    A fighter pilot is supposed to get 200 hours flight time per year. Which still pretty low at four hours week. In much of Europe, 50 hours a year would be a more realistic.

    How many of Europes vast tank fleets are actually operable, and how many have been stripped for parts? How any shells do they have to fire from them?
    Unfortunately the answer to that question is likely to be, not many, lots, not enough.

  3. We are in a stage that China was decades back. At that time, they sensibly kept to themselves and focused on economic development ---- and nothing else. Only the rich can be militarily powerful. And,of course, only the militarily powerful can be politically powerful. So, we first need to get rich and only then get international dreams. Unfortunately, Mr Modi is more at ease outside India than in India. So, it's not going to work out either for India or for him.

  4. Excellent article as always.

  5. We need to balance economic growth , social reforms and defence . Let us focus on our improvement rather worrying about sending a flotilla to Indian Ocean or a expeditary army to some corner of the world .
    It is pointless to add india in an article about US, NATO and China. Just messed thought process or bad politics !

  6. India cannot spend more on defence as we have too many priorities which neither USA nor china has so its unfair to compare us with them. its clear without money defence cannot be improved.
    Modi inherited a huge mess in 2014 - very low no of subs and helos for navy, too few mmrca and luh for iaf and outdated artillery, air defence and ammunition and rifles for army. the list is too long and we are short on every hardware that we possibly use (even men, trucks, jeeps, jackets, food!!). to rub salt he had to deal with OROP and 7th CPC, corruption, bureaucracy and DPSU's!! And can't expect him to do miracles in 2 years.
    it will take 10 more years focussed approach to clear our mess. till then we must stop dreaming about matching china and usa, all this is nonsense. we have to be realistic.

  7. Sir,

    The article is very detailed and well written. I just wanted to a small type in the last paragraph where India's defense budget us mentioned as $53.3 crore instead of $ 53.3 billion.

    Satyabrat Swain


  9. Oh you think china is a big boy? its a small brat holding a totem on its head to look tall. Everyone falls for its smoke and mirrors policy. Its hollow and its army is a mass collage recruit for the sake of mandatory military service which itself lowered the standards so that unhealthy obese chinese can join, what they show is the conmetic top. but dont yet write me off as underestimating the enemy, the big boys are russia and usa, china is a crazy brat who supplies some stuff hawking its wares on the street which uncle sam now wants to teach a lesson. china cannot match US war reserves leave alone its standing forces, you have no idea and its disappointing. just like you have no idea on f35


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