CHAPTER 3 A Common Setting for Naval Planning in Southeast Asia? Two Case Studies in Divergence YingHui Lee and Collin Koh Swee Lean Abstract Two examples of naval development (Thailand and the Philippines) not treated elsewhere in the book are used to show that although there are common threats and challenges in Southeast Asia, especially growing competition between China and the United States and the jurisdictional dispute in the South China Sea, each country’s approach to them is distinctive. keywords Naval modernisation · Philippines · Thailand · Problems Strategic Consequences · South China Sea Y. Lee (*) Shanghai Jiao Tong University, Shanghai, China e-mail: [email protected] C. Koh Swee Lean Institute of Defence and Strategic Studies, S. Rajaratnam School of International Studies (RSIS), Blk S4 Nanyang Avenue, Singapore 639798, Singapore e-mail: [email protected] © The Author(s) 2018 33 G. Till (ed.), Naval Modernisation in Southeast Asia, DOI 10.1007/978-3-319-58406-5_3 34 Y. LEE AND C. KOH SWEE LEAN INTRODUCTION Many Southeast Asian navies are expanding their feets while at the same time also acquiring more advanced platforms, weapons and equipment. This is in part spurred by a general increase in military spending in the region. Data by the Stockholm International Peace Research Institute (SIPRI) shows that military spending by Southeast Asian countries increased 50% over the last 10 years, from in US$ 25.8 billion in 2004 to US$38.7 billion in 2014.1 This has sparked off debates about whether a naval arms race is underway in this region.2 However, naval modernisation programmes in Southeast Asia are driven by a multitude of domestic concerns as well as strategic rationales. It would also be over-simplistic to assume a one-size-fts-all model for naval capability development in the region. A 2008 Australia Strategic Policy Institute study on military modernisation in Southeast Asia cor- rectly noted that “many different motivations exist concurrently, and the resources that various countries can bring to bear vary markedly, result- ing in a many-faceted picture”.3 Naval modernisation in this region is in part driven by structural fac- tors such as the provisions outlined under the 1982 United Nations Convention on the Law of the Sea (UNCLOS), as well as the enduring importance of safeguarding the sea lines of communications (SLOCs) so critical for national socioeconomic development. There are also com- mon maritime security concerns, for example piracy and armed rob- bery against ships in the Straits of Malacca and Singapore and the South China Sea,4 which require responses from robust naval resources. All these feature as important general considerations behind some Southeast Asian navies’ quest for a “green-water” capability.5 However, individual countries have different threat perceptions which determine the amount of budgetary resources their governments are willing to allocate to their navies. While the limelight has often focused on those Southeast Asian navies—Indonesia, Malaysia, Singapore and Vietnam— which has to date embarked on signifcant modernisation programmes by virtue of the sophisticated capabilities procured to date, the efforts undertaken by other, so-called “lesser players” should not be overlooked. The Philippines and Thailand present interesting case studies in this respect. Each of them confronts a different variation of traditional and nontraditional maritime challenges and this is refected in their naval capacity development priorities—despite both being military allies of Washington and equally facing severe resource constraints. Using these 3 A COMMON SETTING FOR NAVAL PLANNING … 35 two Southeast Asian navies, this chapter shows how countries in Southeast Asia approach and prioritise their naval capacity development differently as a result of differing threat perceptions in the face of fscal constraints. There is no one-size-fts-all model for naval capacity development in Southeast Asia despite sharing some common driving forces. THE CASE OF THE PHILippiNES Myriad of Challenges The Philippine case is interesting because the country faces a myriad of both traditional and nontraditional challenges. Manila has tradition- ally been preoccupied with internal security concerns, especially in the restive southern provinces. As such, the Philippine Navy (PN) has not given as much attention to external defence vis-à-vis supporting the ground forces’ counter-insurgency operations. However, in the recent years, tensions have brewed up in the South China Sea (SCS), where the Philippines contests territorial and sovereignty claims, compelling Manila to pay more attention to external defence. This was especially following April 2012, when the PN engaged in a standoff with Chinese coastguards over the Scarborough Shoal and Beijing has since taken de facto control over the feature—the worst Sino—Philippine standoff in the SCS since the Mischief Reef incident in 1994–1995. About 3 months after, Beijing offcially established the Sansha city and a prefecture-level municipal government on Woody Island to administer Chinese-claimed SCS features and adjacent waters, includ- ing the disputed Paracel and Spratly Islands, and the Scarborough Shoal.6 At the same time, Beijing also approved the formal establishment of a military garrison in Sansha city.7 According to Rory Medcalf, the “pro- nouncement of a garrison is symbolic” as it signifes that Beijing is “placing a frm military marker on China’s claim in the South China Sea”.8 These moves added onto the supposed mention of the SCS as one of China’s core interests—on a par with Tibet and Taiwan—by some Chinese offcials during closed-door meetings with the US in 2010,9 further raised fears of possible military confrontations over the disputed islands and sea. Meanwhile, although Manila managed to sign a peace agreement with the Moro Islamic Liberation Front (MILF), there appears no relief from its internal security concerns. Maritime terrorism has also become a thorny issue, especially when militant organisations such as the Abu Sayyaf Group (ASG) continue to be active, using waters bordering 36 Y. LEE AND C. KOH SWEE LEAN Indonesia and the Philippines as gateways to travel within Southeast Asia.10 The explosion of Superferry 14 which claimed almost a hundred lives, on 27 February 2004 highlighted the ASG’s ability to carry out acts of maritime terrorism.11 Most recently between late March and early April, Indonesian and Malaysian seamen were abducted when their tug- boats were boarded by ASG gunmen in two separate incidents.12 Too Few Resources Notwithstanding the maritime nature of many of its traditional and non- traditional security concerns, the PN lags behind many of its ASEAN counterparts in terms of naval capabilities.13 Once hailed as the model navy of the region during the 1950s and 60s,14 the PN quickly deterio- rated in the 1970s mainly as a result of mounting internal security issues. The American withdrawal from Subic Bay and subsequent termination of the Military Bases Agreement in 1991 exacerbated this deterioration, given that Manila has traditionally depended on the US security umbrella, along with generous American military aid, for external defence. The Philippines thus has to take up greater responsibility; despite an alliance treaty still in force that obliges Washington to come to its assis- tance should it ever come under external attack, including its territorial seas and Exclusive Economic Zone (EEZ).15 Manila recognised the need for a modern navy capable of defending its sea in 1995 when the PN was left defenceless against Chinese occupation of Mischief Reef. This led to the frst Armed Forces of the Philippines (AFP) modernisation attempt through the passing of the AFP Modernization Act in Congress in 1995.16 Specifcally in response to the need for naval modernisation, the Naval Modernization Offce was established that same year. At present, the bulk of the PN mainly comprises obsolete, ageing, vin- tage equipment—including ships dating back to the Second World War. Furthermore, the PN is essentially weak in all dimensions of naval war- fare: no offensive anti-surface strike, anti-submarine and counter-mine warfare capabilities, anti-air defences comprising just guns, an atrophying amphibious sealift force, as well as just a tiny pool of obsolete, short-range maritime patrol aircraft barely suffcient to cover the entire archipelago. It does not help that counter-insurgency requirements in the 1990s and early 2000s forced the government to prioritise the Philippine Army (PA), which consumes a large proportion of the AFP annual budget. Current modernisation plans are based on the Strategic Sail Plan 2020, formulated by the PN in 2006, which provides a roadmap for the 3 A COMMON SETTING FOR NAVAL PLANNING … 37 modernisation of the navy into “a credible navy that [the Philippines] can be proud of” by 2020.17 This corresponds with President Benigno Aquino III’s plan for the AFP to achieve a “minimum credible deter- rent”, for which a total of US$ 1.8 billion has been earmarked over 5 years. The funding has to some extent enabled the PN to make some improvements to its feet using a mix of new-build and second-hand equipment procured overseas. Additionally, Washington announced in April 2016 a military aid package in excess of US$ 120 million.18 Under the Aquino Administration the navy has seen hardware improvements with the limited funds available. So far, Manila has acquired two ex-US Coast Guard Hamilton-class coast guard