11 DECEMBER 2013

military-geopolitical year in review

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contents » On the web
ihs.com/janes

Headlines Annual Defence Report 2013

4 USN’s Poseidon reaches IOC, deploys 10 Introduction
to Japan
5 Senior staff cuts to save Pentagon $1 bn 11 Americas
Singapore signs deal to acquire Type 218 The US military in 2013 weathered a difficult
submarines from TKMS budget scenario that included a last-minute
6 Turkey shifts policy on extremists crossing sequester, civilian furloughs, a government
to Syria shutdown, and a still-uncertain future
Falco begins in-country trials ahead of
Sikorsky delivered the first four of 12 S-70i
DRC mission 20 Europe Black Hawk helicopters to the Royal Brunei Air
India closes in on permanent tri-service head While many major European defence Force in early December.
8 European Air Transport Command reaches markets continued to suffer in 2013,
F0C Turkey and Poland cemented their place as
First flight for Jordanian CN235 light emerging European defence players • Boeing and Saab to team for USAF T-X
gunships requirement
Poland buys 910 Jelcz trucks 26 Asia Pacific • Ousted USAF chief continues controversial
Regional trends stayed the same in 2013 fight for F-22 production
even as the situation on the ground changed • Australia examines procurement
outsourcing policies of UK and US
34 Middle East/Africa • Greece signs military technical
Wars, coups, military intervention and co-operation agreement with Russia
terrorism made 2013 another eventful year • Brunei makes modest proposals for
for the Middle East and Africa defence acquisitions
• US Navy successfully launches XFC UAV
40 Industry from submarine
In 2013 the challenges of budget cuts and
restructuring were met with stoicism in the
West, while the East looked to expansion » Subscribe today
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ihs.com/janes 11 December 2013 Jane’s Defence Weekly I 3

» HEADLINES For further insight and analysis go to ihs.com/janes

The USN’s first operational P-8A Poseidon takes

IHS Jane’s off from Jacksonville, Florida, to start its first
Defence Weekly operational deployment to the Western Pacific.

Editorial
Editor: Peter Felstead
Asia-Pacific Editor: James Hardy
Europe Editor: Nicholas de Larrinaga
Middle East/Africa Editor: Jeremy Binnie
JDW Features Editor: Kate Tringham
JDW Assistant Features Editor: Fay Brigden
Jane’s Aviation Desk Editor: Gareth Jennings
Jane’s Land Desk Editor: Nick Brown
Jane’s Land Consultant: Christopher F Foss
Jane’s Naval Consultant: Richard Scott
Jane’s Defence Industry Analyst: Charles Forrester
Jane’s Senior Principal Analyst: Guy Anderson
Jane’s Asia-Pacific Industry Reporter: Jon Grevatt
Washington, DC, Bureau:
Americas Editor: Daniel Wasserbly

USN’s Poseidon reaches

Jane’s C4ISR Reporter: Geoff Fein
Jane’s Industry Reporter: Marina Malenic
Jane’s Naval Reporter: Grace Jean
Jane’s Senior Americas Aviation Reporter: Caitlin Lee

Chief Sub Editor: Jonathan Maynard

Deputy Chief Sub Editor: Thomas Brown
Sub Editors: Jessica D'Alonzo, Karen Deans, Terry Gault,
IOC, deploys to Japan
Susie Kornell, Deborah Miller, Dom Passantino, Clare Welton

Design
Head of Design: Roberto Filistad
Chief Designer: David Playford
Production
Director EMEA, Production Services: David Ward
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General
Senior Vice President IHS &
Managing Director IHS Jane’s: Michael Dell
Group Publishing Director: Sean Howe
Director, News and Analysis: James Green
Director, EMEA Editing and Design: Sara Morgan
Administrative Assistant: Hannah Brockwell
Correspondents
The Americas: Peter Diekmeyer, Diego Gonzalez,
Scott Gourley, Inigo Guevara, Jose Higuera, Joshua Kucera,
Jeremy McDermott, Pedro Paulo Rezende, Patricia Samfelt,
Cesar Cruz Tantalean. Asia-Pacific: Gordon Arthur, Rahul
Bedi, Farhan Bokhari, J Michael Cole, Sebastien Falletti,
Robert Foster, Julian Kerr, Dzirhan Mahadzir, Mrityunjoy
Mazumdar, Trefor Moss, Gavin Phipps, Kosuke Takahashi.
Europe: Victor Barreira, Nicholas Fiorenza,
Tim Glogan, David Ing, Bruce Jones, Jiri Kominek,
Georg Mader, Tim Ripley, Lale Sariibrahimoglu, Sebastian
Schulte, Menno Steketee, Radu Tudor, Theodore Valmas,
Paolo Valpolini. Middle East/Africa: Segun Adeyemi,
Nicholas Blanford, Helmoed-Romer Heitman, Yaakov Katz,
Ellen Knickmeyer, Mohammed Najib.
NATO and EU Affairs: Brooks Tigner.
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GRACE JEAN Jane's Naval Reporter________________
WASHINGTON, DC
The US Navy’s (USN’s) P-8A Poseidon
maritime patrol aircraft programme has
achieved initial operational capability
(IOC) with the inaugural deployment of
two aircraft on 29 November and their
subsequent arrival at Kadena Air Base,
Okinawa, Japan, on 1 December.
During an interview with IHS Jane’s,
the commanding officer of the USN’s first
operational P-8A squadron revealed that his
team had conducted a pre-deployment site
visit in August 2013, flying one of the new
multi-mission aircraft out to Kadena, which
traditionally has been the navy’s maritime
patrol reconnaissance deployment site.
The visit “validated that our training and
our procedures were up to speed... and that
we’ll be able to effectively employ the P-8 in
the Western Pacific”, said Commander Wil­
liam Pennington Jr, commanding officer of
Patrol Squadron 16 (VP-16).
VP-16 transitioned from the P-3C Orion
in mid-2012, upon its return from a Western
Pacific deployment. Following 18 months
of training and preparation, the squadron
is deploying with six P-8As and 12 combat
aircrews in the USN’s first operational deploy­
ment of the new aircraft.
Based upon Boeing’s 737 commercial
airliner, the P-8A is replacing the P-3C, which
has been the workhorse of the USN’s mari­
time surveillance and anti-submarine warfare
patrol aircraft community since the 1960s.
• The US Navy’s VP-16 patrol squadron has
deployed to Northeast Asia with six P-8A
Poseidon aircraft and 12 aircrews
• The squadron conducted a pre-deployment
site visit in August 2013
In addition to the digital technology advances
enabled by the P-8 A, including communica­
tions and mission system improvements, the
airframe’s improved reliability and automa­
tion has allowed the USN to reduce the size of
its aircrew and maintenance teams.
The P-8As are expected to fly similar mis­
sions as the P-3Cs in theatre, according to Cdr
Pennington. However, the theatre’s strategic
environment has changed recently with
China declaring an Air Defence Identification
Zone (ADIZ) over a part of the East China Sea
that includes the Senkaku/Diaoyu islands,
which are administered by Japan but claimed
by Taiwan and China.
The ADIZ appears to have had little impact
upon US military operations so far. Pentagon
officials have neither confirmed nor denied
Chinese reports of US reconnaissance air­
craft being flown through the restricted
zone. Given the P-8’s capabilities and its
inherent intelligence, surveillance, and
reconnaissance mission, it can be assumed
that the navy may well be flying the new
aircraft through the region - an ideal
proving ground for validating the system
and its capabilities. ■
Go to ihs.com/ianes for more

4 | Jane’s Defence Weekly 11 December 2013 ihs.com/janes

For further insight and analysis go to ihs.com/janes
Senior staff cuts to save Pentagon $1bn
MARINA MALEH1C Jane’s Industry Reporter_________
WASHINGTON, DC
US Defense Secretary Chuck Hagel
on 4 December directed his staff to
begin implementing plans announced in
2012 to reduce Department of Defense
(DoD) headquarters staff by 20% by fiscal
year 2019.
“With the Pentagon confronting his­
torically steep spending reductions after a
decade of significant budget growth, there
is a clear need, and an opportunity, to pare
back overheads and streamline headquarters
across the department, many of which grew
significantly after 9/11,” Hagel said at a press
conference.
This summer, Hagel directed a Strategic
Choices Management Review (SCMR) to
Singapore signs deal to acquire
Type 218 submarines from TKMS
Singapore’s Ministry of Defence (MIND-
EF) has signed a contract with Germany’s
ThyssenKrupp Marine Systems (TKMS)
to procure two new Type 218SG subma­
rines, it announced on 2 December.
The contract, the value of which was not
revealed, includes a logistics package and
training in Germany for Republic of Singapore
Navy (RSN) personnel. MINDEF said
the submarines are scheduled to be delivered
from 2020.
MINDEF added that the new submarines,
together with the two ex-Royal Swedish Navy
(RSwN) Archer-class (Type A 17) submarines
delivered to the RSN in 2011 and 2012, will
replace its ageing Challenger-class (Type A
12) submarines. The latter were built in the
ihs.com/janes
ensure that the Pentagon is prepared to
deal with sequestration. The review scruti­
nised every aspect of the DoD’s budget to
find savings.
One of the immediate outcomes of the
SCMR was Hagel’s decision to implement
a new round of cuts to major headquarters
staff across the department. Hagel decided
to apply these reductions to the Office of the
Secretary of Defense (OSD) first to set an
example for other headquarters, he said. The
reductions will be implemented whether or
not sequestration continues.
“We recognise that the dollar savings
generated by the OSD reductions - at least
USD 1 billion over five years - is a small
per cent of the sequester-level cuts, under­
scoring the challenges that face this
department in absorbing these very large
1960s and acquired second hand from Swe­
den in the 1990s.
The Archer-class and Challenger-class
submarines were built by what was Kockums,
now TKMS AB, in Malmo, Sweden.
MINDEF added that the Type 218SG
submarines will have “significantly improved
capabilities” over the Challenger-class,
including the incorporation of an air indepen­
dent propulsion system.
A spokesperson from MINDEF told IHS
Jane’s that no other details about the contract
or the specifications of the Type 218SG were
being revealed at this time.
Jon Grevatt
Jane’s Asia-Pacific Industry Analyst,
Bangkok
TKMS has offered Singapore
an adaptation of its Type
214 design, a Greek version
of which, HS Papanikolis, is
seen here during sea trials.
HEADLINES «
sequester-level reductions,” Hagel said.
“Still, every dollar that we save by reducing
the size of our headquarters and back-office
operations is a dollar that can be invested in
warfighting capabilities and readiness.”
Specifically, the latest cuts include restruc­
turing of the Office of the Under Secretary of
Defense for Policy; the Office of the Deputy
Chief Management Officer; the Office of
the Assistant to the Secretary of Defense
for Intelligence Oversight; the Office of Net
Assessment; the Office of the Under Secre­
tary of Defense for Personnel and Readiness;
and the Office of the Under Secretary of
Defense for Intelligence.
In addition, the five remaining non-
presidentially appointed, Senate-confirmed
deputy under secretaries of defence will
be eliminated. ■
COMMENT
Given the RSN’s close relationship with
Sweden, the A 26 next-generation submarine
being developed by TKMS AB in Sweden had
long been considered a prime candidate in the
Challenger-class replacement programme.
However, in the final analysis, TKMS bid an
adaptation of its Type 214 design developed by its
Kiel-based operation in Germany, France’s DCNS
also competed for the contract with its Scorpene.
Singapore’s procurement of the Challenger-class
replacements is also notable in that it continues
Southeast Asian countries' recent acquisitions of
diesel-electric submarines as they look to bolster
capability to secure their respective exclusive
economic zones.
Malaysia took delivery in 2010 of its second
Scorpene submarine from DCNS, Indonesia ordered
in 2011 three Type 209s from South Korea’s
Daewoo Shipbuilding and Marine Engineering, and
Vietnam took delivery in November 2013 the first
of six Project 636 ’Kilo’-class submarines ordered
from Russia in 2009.
Thailand also continues to consider the procure­
ment of submarines and has purchased several
related training systems. Additionally, the Philippines
reiterated in October its intention to procure three
submarines. IHS Jane's reported in June 2013 that
Myanmar Navy personnel had begun submarine
warfare training in Pakistan, a move that suggests
Myanmar is also considering a submarine purchase.
11 December 2013 Jane’s Defence Weekly I 5
» HEADLINES
Turkey shifts policy on
extremists crossing to Syria
LALE SARIIBRAHIMOGLU JDW Correspondent
ISTANBUL
Turkey is increasing its efforts
to prevent foreign jihadists
crossing its 900 km border
with Syria to join the Al-Qa­
eda-affiliated groups fight­
ing forces loyal to President
Bashar al-Assad, an Ankara-
based Western diplomatic
source has told IHS Jane’s.
“Turkey was earlier closing its
eyes to the passage of jihadists
to Syria via its territory because
it was desperate to see the Assad
regime’s downfall,” the source
said. “Ankara began tightening
security control on the borders
almost three months ago.”
The move comes after grow­
ing pressure from the United
States and European countries
to control the fighters and arms
flowing into Syria to ensure they
do not reach the most extreme
groups. The Turkish government
has responded by denying that
it is supporting jihadists in a bid
to accelerate the demise of the
Assad regime.
Falco begins in-country trials ahead of DRC mission
Selex ES has begun trials of
its Falco unmanned aerial ve­
hicle (UAV) in the Democratic
Republic of the Congo (DRC),
ahead of its introduction into
UN service there, the compa­
ny disclosed on 3 December.
The unarmed medium-alti-
tude, medium-endurance surveil­
lance platform will be used by
the UN in the DRC under its
MONUSCO mandate to keep the
peace in the central African coun­
try. Specifically, it will enable
peacekeeping troops to monitor
6 | Jane's Defence Weekly 11 December 2013
> Ankara is tightening security
to prevent foreign jihadists
crossing its border with Syria
to join the Al-Qaeda-affiliated
groups fighting forces loyal to
President Bashar al-Assad
> The Turkish government hassecurity organisations over the
denied that it is supporting
jihadists in a bid to speed the
demise of the Assad regime
“Turkey has repeatedly asked
those [countries] making the
complaints to inform it about
Al-Qaeda members going to
Syria,” Foreign Minister Ahmet
Davutoglu said on 13 November.
“We want these countries to
give the names of those people,
but they don’t. In return they
say: ‘We are democratic coun­
tries, there is freedom of travel,
how can we prevent them from
travelling?”’
A Turkish Foreign Minis­
try source told IHS Jane’s that
members of extremist groups
the movements of armed groups
to better protect the civilian
population.
While Selex ES and the UN
have previously confirmed the
deployment of the Falco UAV
to the DRC, neither have said
For further insight and analysis go to ihs.com/janes
are being arrested or deported.
The Haberturk newspaper cited a
report as saying that 1,100 sus­
pected foreign militants had been
deported in 2013, but the source
said the report did not exist.
The diplomatic source added
that divisions have emerged
between Turkey’s intelligence and
handling of the extremists, who
potentially represent a serious
threat to the country. “Syrian
policy is driving divisions within
the Turkish intelligence agencies,
but Ankara has lately begun to
realise that there is no guarantee
that military supplies for the Syr­
ian opposition are going into the
right hands once they cross the
Turkish border,” the source said.
The jihadist threat to Turkey
was highlighted in the wake
of the 11 May bombings that
killed 52 people in the border
town of Reyhanli. Intelligence
documents were subsequently
leaked showing that the Syrian
jihadist group Jabhat al-Nusra
was planning to carry out bomb­
ings in Turkey. ■
The Falco UAV
will be used by
the UN to monitor
the movements of
armed groups in
the DRC.
how many systems will be sent,
nor when operations might
begin. The current agreement,
as announced in August, is set
to run for three years, with an
optional two-year extension.
Able to operate from semi­
India closes in
on permanent
tri-service head
India is on the verge of appoint­
ing a permanent chairman of
the Chiefs of Staff Committee
(CoSC) to be the country’s first
tri-service head.
“All three service chiefs have con­
curred on having a permanent, not
rotational, chairman CoSC who will
be a four-star officer,” Indian Navy
(IN) chief Admiral Devendra Kumar
Joshi said on 3 December.
Adm Joshi said the appointment
was waiting for a political green
light but indicated it was imminent.
He said the consensus to appoint a
permanent tri-service head followed
the May 2012 recommendations of
the Naresh Chandra Committee on
defence and security reforms, but
added that the post was a “stop gap”
arrangement before the eventual
appointment of a five-star chief of
defence staff (CDS).
Sources said Prime Minister
Manmohan Singh is likely to appoint
Indian Army chief General Bikram
Singh as permanent chairman CoSC
on 31 December when Air Chief
Marshal N A K Browne retires,
Rahul Bedi JDW Correspondent,
New Delhi
prepared strips, the Falco UAV is
designed to accommodate a wide
variety of payloads, including
electro-optic, synthetic aperture
radar, electronic support mea­
sures, self-protection equipment
and droppable external stores up
to 70 kg.
It has a radius of operation of
150 km, and can fly up to 21,320
ft. The single-engine UAV has
an endurance of approximately
eight hours.
Gareth Jennings Jane’s
Aviation Desk Editor, London
ihs.com/janes
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» HEADLINES
»In brief
Poland buys 910 Jelcz trucks
The Polish Armament Inspectorate
has ordered 910 military trucks
from Jelcz-Komponenty company
for the Polish Armed Forces, it was
announced on 29 November. Worth
PLN673.9 million (USD218 million),
the order will see the firm (a sub­
sidiary of Huta Stalowa Wola - HSW)
deliver 910 Jelcz 442.32 trucks. The
first batch of vehicles is expected for
delivery in 2014.
New Norwegian unit in the north
The Norwegian Army has announced
that it is to form a new special unit
to be known as HRS Nord (Rapid
Reaction Force North) with
a strength of more than 700
professional and national service
personnel, to be in operation by
2017. Lieutenant Colonel Steinar
Dahl told IHS Jane’s on 2 December
that the new unit’s key equipment
will comprise CV90 infantry fighting
vehicles in infantry, reconnaissance
and mortar variants, and upgraded
Leopard 2 main battle tanks.
Manila issues howitzer tenders
The Philippines Department of
National Defense (DND) has issued
tenders supporting the procure­
ment of 155 mm towed howitzers,
ammunition and related equipment.
The tenders, issued in late November
by the DND’s Bids and Awards
Committee, are together worth more
than PHP1 billion (USD23 million) and
feature the acquisition of 10155 mm
howitzer units and 240 rounds of
155 mm high explosive projectiles.
Seoul eyes surplus US Chinooks
South Korea has requested from the
United States the sale of 14 surplus
Boeing CH-47D Chinook heavy-lift
helicopters, the US Defense Security
Cooperation Agency announced on
3 December. The proposed sale,
which is valued at USD151 million,
comprises the former US Army
helicopters, associated equipment,
parts, training and logistical support.
8 | Jane’s Defence Weekly 11 December 2013
European Air Transport
Command reaches FOC
NICHOLAS DE LARRINAGA JDW Europe Editor
LONDON
The European Air Transport
Command (EATC) has reach­
ed full operational capability
(FOC) it was announced on
28 November.
The EATC, based in Eindhoven,
the Netherlands, was formed in
September 2010 and is one of
Europe’s flagship pooling and
sharing (P&S) projects.
The multinational command
serves as the joint headquarters
of its participating nations’ air
transport and air-to-air refuel­
ling capabilities. According to the
EATC, the arrangement “gives
nations access to additional capa­
bilities and tat] the same time
provides the basis for a more
efficient employment of scarce
air transport assets”.
First flight for Jordanian
CN235 light gunships
Alliant Techsystems (ATK)
has begun flight trials of the
two Airbus Military CN235
twin-engine transport aircraft
that it has converted into
light gunships for the Royal
Jordanian Air Force (RJAF),
the company announced on 4
December.
With the first flight having
now taken place, a testing phase
will now begin to validate the
newly installed weapon systems
before delivery to the customer.
ATK did not disclose when this
handover might happen.
Work to upgrade the aircraft
was carried out in-country by
the King Abdullah II Design and
For further insight and analysis go to ihs.com/janes
• The EATC has reached
FOC and serves as the
joint headquarters of its
participating nations' air
transport and air-to-air
refuelling capabilities
• Spain is to join the command
in mid-2014
The declaration of FOC is
an acknowledgement “that
the EATC has the adequate
manpower equipped with the
required level of expertise, tools,
and financial funds to exercise
an effective operational control
over assigned assets”, the EATC
stated.
Currently Belgium, France,
Germany, Luxembourg, and the
Development Bureau (KADDB),
and at ATK facilities in the
United States.
Weapon systems fitted to the
converted gunship comprise
Lockheed Martin AGM-114
Hellfire air-to-surface mis­
siles, 70 mm rocket pods, and
a side-mounted M2 30 30 mm
chain gun (as fitted to the AH-64
Apache attack helicopter). Other
equipment includes defensive
countermeasures, electro-opti-
cal/infrared targeting systems, a
laser designator, and a synthetic
aperture radar.
The conversion of two of the
RJAF’s CN235 transport aircraft
into a gunship configuration is
Netherlands are members of the
EATC, contributing around 150
aircraft in total to the command.
Around 200 staff are attached to
the EATC at Eindhoven.
Meanwhile, on 2 December it
was announced that Spain would
also join the command, with
the country’s accession set to be
completed “during the change
of command of the EATC in late
June/early July 2014”, according
to an EATC statement.
The EATC stated that Spain
will add 28 aircraft to the EATC,
including Airbus Military C295
tactical transport aircraft, Lock­
heed Martin Hercules C-130
airlifters, and Boeing 707 tanker/
transport aircraft. The deadline
for Spain handing over authority
of the Spanish Air Force’s trans­
port fleet to the EATC has been
set for 1 January 2015. ■
A computer-generated impression of
the RJAF’s CN235 gunship. aik
part of a wider drive by Jordan to
enhance its airborne light strike
capabilities. Earlier in 2013 it
received two Air Tractor AT-802
Block 1 armed reconnaissance
and light-strike turboprop air­
craft donated by the United Arab
Emirates, with four more set to
arrive before the end of the year.
Gareth Jennings
Jane's Aviation Desk Editor,
London
ihs.com/janes
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 2013
Annual Defence Report
Contents
The Americas
Europe
Asia Pacific
The Middle East and Africa
Industry

I
ore than 70 years since its potency was realised,
the aircraft carrier remains the primary symbol of
conventional power projection. The past 12 to 14
months have seen key developments in this regard.
Having officially joined the ‘carrier club’ on 25 Sep­
tember 2012 with the commissioning of Liaoning, China
marked a crucial milestone in its naval carrier aviation
development by achieving its first full arrested carrier
landings and take-offs from the vessel the following
month. A year on from that, on 28 November this year,
China was already beginning to flaunt its new-found
status by steaming Liaoning through the Taiwan Strait for
the first time.
This event, combined with China’s attempt to exert
control over the East China Sea with the declaration of
an Air Defence Identification Zone on 23 November,
points to a ramping up of tensions off the east coast of
Asia in 2014 and would seem to confirm the US rebalance
toward the Pacific as a prudent geopolitical move.
India, meanwhile, launched its first indigenously
designed carrier on 12 August, making it the fifth coun­
try to have built a mid-sized carrier in the modern era.
The country reinforced its power-projection creden­
tials on 16 November with the commissioning of INS
Vikramaditya, an ex-Russian aircraft carrier. Costing
almost three times the original estimate, Vikramaditya
allows India to edge ahead of China, at least while the ex-
British carrier INS Viraat serves out its final few years.
Back in the UK, a double U-turn over the design of the
Royal Navy’s (RN’s) fleet of hopefully two new Queen
Elizabeth-class aircraft carriers has also led to inflated The 2013 JDW Annual
Defence Report has
project costs. Nevertheless, on 10 November the pro­
been compiled by IHS
gramme reached a significant milestone with the lower­ Jane’s editorial staff
ing into place of the first carrier’s final hull section. in conjunction with
Of all carrier-related developments in 2013, however, contributions from key
JDW correspondents
the most significant came from the US. On 17 November
worldwide.
Gerald R Ford was launched: the lead ship of a new class of
carrier and the first to be fitted with an Electromagnetic
Aircraft Launch System. While the expected service entry Guy Anderson
of Ford in 2016 will, therefore, be a major milestone in Jeremy Binnie
aircraft carrier development, events earlier in the year Nicholas de Larrinaga
hold even more significance for power projection at sea. Peter Diekmeyer
On 14 May a fighter-sized combat aircraft with the call Peter Felstead
sign ‘Salty Dog 502’ was catapult-launched from the deck Inigo Guevara
of Nimitz-class carrier USS George H W Bush, subsequently Jon Grevatt
conducting a series of‘touch and go’s. Then, on 10 July, James Hardy
the same aircraft made its first arrested landing on Bush. Grace Jean
The significance of this, of course, is that ‘Salty Dog Julian Kerr
502’ is an X-47B Unmanned Combat Air System - Dem­ Caitlin Lee
onstrator. In terms of the history of air power at sea, the John Smith
last development as momentous as this arguably took Kate Tringham
place on 2 August 1917, when RN Squadron Commander Daniel Wasserbly
Edwin Harris Dunning landed his Sopwith Pup on HMS
Furious, becoming the first man to land an aircraft on a
moving ship. Such was the difficulty of that achievement
that Dunning was killed five days later, attempting his
second landing of the day.
The reality that such a feat can now be achieved with­
out a pilot should not be underestimated.
Peter Felstead, JDW Editor

10 | Jane's Defence Weekly 11 December 2013 ihs.com/janes

The Americas
The US military in 2013 has weathered a difficult budget scenario that included a last-minute sequester,
civilian furloughs, a government shutdown, and a still-uncertain future. Meanwhile, officials have also been
transitioning the security lead in Afghanistan and rebalancing efforts towards the Asia-Pacific region
he halls of the US military’s massive
T Pentagon complex have throughout
2013 mainly been filled with chatter
about the highly uncertain budget issues
facing the Department of Defense (DoD).
Congress and the White House remain
locked in a three-year-long imbroglio over
how to reduce the US public debt: a situa­
tion that has caused historic upheaval in the
budget approval process. Democrats control
the presidency and Senate and believe taxes
should be raised and government spend­
ing mostly continued, while Republicans
control the House of Representatives and
believe taxes should remain low and govern­
ment spending cut.
The two sides’ inability to reach a budget
deal triggered the sequestration mechanism
created by the 2011 Budget Control Act,
causing a sudden reduction to the DoD’s
Fiscal Year 2013 (FY13) budget that led to
several days of furlough for civilian employ­
ees and curtailed a range of training events
for the services.
Sequestration represents
a 10-year USD500 billion
ihs.com/janes
ANNUAL DEFENCE REPORT 2013 «
cut to the Pentagon’s planned budget, and
USD52 billion could be cut from FY14 plans
in J anuary 2 014 if the impasse continues.
USD527.5 billion was enacted in FY13 but
sequestration, according to the Pentagon,
reduced that by USD37.2 billion - leaving
the DoD with USD498.5 billion.
The original budget plan, however, is becom­
ing a spurious benchmark for measuring cuts
as it appears increasingly unlikely that the old
defence budget proposal will ever be realised.
The DoD has been operating in FY14
under a stop-gap funding measure, called a
Continuing Resolution (CR), that funds the
department at about last year’s level.
Yet another committee has been charged
with finding budget recommendations by
mid-December that could then be imple­
mented before the January 2014 deadline,
otherwise the next round of sequestration
will be triggered. Several similar panels in
the last two years have failed.
Sequestration’s USD475 billion cap to the
DoD’s discretionary base budget authority in
FY14, if implemented in January, would rep­
resent a USD52 billion cut against the White
House’s request for USD526.6 billion.
Meanwhile, Pentagon budget planners
are trying to formulate their FY15 funding
request, which is expected to mark a notable
shift for the DoD. It will include a five-year
budget plan that comes as the United States
is winding down the war in Afghanistan, as
funding becomes extraordinarily unstable
due to the fractious Congress, and as the
White House is seeking to shift focus
towards the Asia-Pacific region.
As of this writing, the US military’s future
role in Afghanistan is still unclear. US and
Afghan officials had reached a Bilateral Secu­
rity Agreement (BSA) that could ultimately
shape the size and construct of the United
States’ and NATO’s post-2014 mission in
Afghanistan, but Afghan President Hamid
Karzai has since said he would not sign it for
several months in an apparent attempt to
The X-47B UCAS-D conducts a ‘touch
and go’ on the flight deck of aircraft
carrier USS George H W Bush.
'013 Jane's Defence Weekly | 11
» ANNUAL DEFENCE REPORT 2013
gain concessions from the United States.
NATO’s mandate for operations in Afghan­
istan ends on 31 December 2014, and the
alliance is currently working to determine
the scope of a follow-on Operation ‘Resolute
Support’ for the International Security
Assistance Force (ISAF) there. However,
the United States will not commit troops
to such an operation without an agreement
that, among other things, grants US troops
immunity from local prosecution and allows
them to operate outside bases - and among
the Afghan population - in certain circum­
stances. The inability to reach a similar
accord with Baghdad caused Washington to
withdraw its forces from Iraq in 2011.
As operations wind down in Afghanistan,
the Pentagon is trying to shift its focus more
towards the Asia-Pacific region in accordance
with the White House’s 2012 Defense
Strategic Guidance.
Indeed, Pentagon officials have said
the DoD’s FY14 budget proposal seeks to
support this Asia-Pacific shift by funding
programmes and activities that underline
a larger presence in the area and enhanced
capability for countering anti-access/area
denial strategies.
Among the systems that officials have
noted would be funded specifically for
their utility in the region are the US Navy’s
(USN’s) Virginia-class nuclear-powered
attack submarine and the Virginia Payload
Module, the P-8A Poseidon multimission
maritime aircraft, the MQ-4C Triton
unmanned aircraft system, the US Air
Force’s (USAF’s) in-development KC-46
refuelling tanker, the F-35 Lightning II Joint
Strike Fighter (JSF), an eventual new stealth
bomber, and US Army missile defence sys­
tems and precision strike weapons.
DoD leaders have also suggested they
will seek to protect funding for US Special
Operations Forces (SOF), which are viewed
as playing an increasingly important role in
supporting the DoD’s efforts to continue to
project influence abroad even as it cuts end
strength from the services.
Deputy Secretary of Defense Ashton
Carter noted in June that the SOF com­
munity was comprised of a highly skilled
workforce that could not be mass produced
or quickly rebuilt in a crisis and would be
needed for future roles and missions.
Carter argued that US Special Operations
Command (SOCOM) represents a high
return on investment - SOCOM’s budget
this year is less than 2% (and combined
12 | Jane’s Defence Weekly 11 December 2013
with service support elements is less than
4%) of the overall DoD budget - and that
special forces operators provide strategic
benefits by enhancing partners’ capacity and
gaining influence for ‘preventive and
shaping operations’.
US Air Force
Forced to walk a razor’s edge between mod­
ernisation and readiness due to sequestration,
the USAF in 2013 made a major decision to
protect its top three acquisition priorities
while letting a variety of other efforts slip.
The Lockheed Martin F-35 Lightning II
JSF, the Boeing KC-46A aerial refuelling
tanker, and a next-generation bomber all
stayed on track in 2013, but the progress
came at a high cost.
General Mark Welsh became the USAF’s
chief of staff in August 2012 as the US gov­
ernment began to brace itself for sequestra­
tion’s impact. Since then he has repeatedly
warned that the USAF’s readiness - already
declining for over a decade - would continue
to suffer as the service attempted to protect
its top acquisition priorities in a more aus­
tere budget environment.
“We don’t believe modernisation is
optional for the air force,” Gen Welsh told
reporters in November. “The trade is between
readiness today and capability tomorrow.”
The F-35 programme, which involves
building a stealthy fighter for the United
States and eight partner nations, saw the
benefit of this protective approach in 2013.
Pentagon officials declared the F-35 ready
The US Marine Corps in October telegraphed a greater commitment to the JLTV programme. AM
General, with its BRV-0 submission shown here, joined competitors Lockheed Martin and Oshkosh in
the JLTV’s current development phase.
TheAmericas
for increased production rates in late Octo­
ber 2013, marking a significant turnaround
for a programme plagued by cost over­
runs and schedule delays. While the exact
production ramp-up rates will be subject to
congressional approval, the Pentagon’s cur­
rent plan is to build around 40 JSFs in FY 15
and 60 JSFs in FY16. Those numbers mark
a significant increase over FY13 and the
planned budget for FY14, which have called
for an F-35 production plateau at around 30
jets per year.
Despite the progress, however, Gen Welsh
told IHS Jane’s in July that he would feel like
he dodged a bullet if the USAF managed to
purchase the 1,763 F-35A aircraft in the
service’s programme of record. If that goal
were achieved, Gen Welsh said he would be
“very happy” with the size and quality of
the USAF’s tactical aircraft fleet.
The KC-46A programme, scheduled to
begin replacing the USAF’s ageing KC-135
Stratotanker fleet in 2016, also had a rela­
tively good year. Prime contractor Boeing
began manufacturing the first tanker in
June 2013 under a USD3.9 billion engineer­
ing and manufacturing development (EMD)
contract that includes designing, testing, and
building the first four tankers, which will ini­
tially serve as test aircraft. The EMD contract
includes options for additional annual pro­
duction lots, which, if exercised, would yield
179 KC-46 A tankers at a peak production
rate of 15 aircraft a year through to 2027.
Research and development (R&D) on the
USAF’s developmental Long-Range Strike -
ihs.com/janes
The Americas ANNUAL DEFENCE REPORT 2013 «
Bomber (LRS-B) also continued to advance USAF officials are considering vertical cuts to entire fleets including the A-10 Thunderbolt II
in 2013. The overarching requirements for inventory, although that proposal has been opposed by US lawmakers.
the bomber have remained steady, accord­
ing to USAF officials, although the technical
details are still in flux. USAF leadership has
repeatedly said the service is committed to a
price tag of about USD550 million per copy
for a fleet of 80-100 aircraft. The service
spent a total of USD581 million on LRS-B
R&D in FY12 and FY13.
Gen Welsh told reporters in November
that these top modernisation priorities -
particularly the F-35 - must remain a focus
as Russia and China continue working on
fifth-generation fighters with stealth, situ­
ational awareness, advanced radar systems,
and beyond-visual-range missiles. While
the chief said he does not expect the United
States to fight these countries, he does
expect these countries to export the tech­
nology. “It will be on the street and we will mm ■
be fighting it,” he warned. “Their new stuff
will be better than our legacy stuff. That’s
just the way it is.”
In order to keep its technological edge in
the face of proliferating threats, the USAF’s
readiness took a hit in 2013. In particular
USAF officials have begun to mull vertical Major programme milestones
cuts, which involve eliminating funding for for the F-35 programme in
entire fleets of aircraft. Current discussions - ! - 2013 included the aircraft’s
first fully guided air-to-air
centre on stripping funds for the KC-10
missile launch on 30 October.
Extender aerial refuelling tanker or the A-10
Thunderbolt II close air support aircraft. Yet
the business of settling on where to make Command should oversee the CSAR mis­ If sequestration continues through FY14,
the cuts is far from finished and the propos­ sion. In the meantime, the Combat Rescue Gen Welsh cautioned readiness could plum­
als have drawn scrutiny from the Pentagon Helicopter (CRH) acquisition programme met further and the USAF could be forced to
and US lawmakers who argue those plat­ will be delayed and, if sequestration does cut its flying hours by 15%.
forms are mission essential. not end, “it’s going to be very hard for new In September Gen Welsh quantified the
Another potential place to cut is within starts” like CRH, Fanning told reporters in overall impact of sequestration on USAF
the USAF’s fleet of unmanned aircraft, November. readiness by warning that, if the across-the-
known in the service as remotely piloted Moreover, efforts to fall within budget caps board defence cuts continue, the USAF could
aircraft (RPAs), with Gen Welsh saying have affected flying hours. The USAF cleared be forced to cut up to 25,000 airmen on
he would like to see funding reduced for its active-duty Combat Air Forces (CAF) units active duty and in the Air National Guard and
MQ.-1 Predator and MQ.-9 Reaper combat air to begin flying again in July after announcing Reserve (about 4% of its personnel) and about
patrols (CAPs). Current Pentagon plans call in April that it would reduce or eliminate fly­ 550 aircraft (about 9% of its inventory).
for 6 5 CAPs by May 2 014, but Gen Welsh ing hours for a third of CAF aircraft stationed
would like to see CAPs fall to at least 45. in the United States, Europe, and the Pacific. US Army
In addition to vertical cuts, other propos­ This included fighter, bomber, aggressor, and Force structure cuts to accommodate
als floating around the USAF would see airborne warning and control squadrons. the DoD’s overall drawdown are expected
recapitalisation plans delayed. Eric Fan­ Gen Welsh said in November that the to hit the US Army the most, with or
ning, the USAF’s acting secretary, has said impact on flying hours has continued without sequestration.
that plans to replace the service’s fleet despite the CAF squadrons returning to The service’s active-duty end strength
of Sikorsky HH-60G Pave Hawk combat flight. Before sequestration around 55% of could potentially shrink to 420,000 if the
search-and-rescue (CSAR) helicopters would the USAF’s combat units were mission ready, full budget sequestration goes through in its
be delayed until the 2016 five-year budget but that percentage has fallen into the high entirety to FY21. As a basis for comparison,
plan, when senior USAF officials will make 30s. USAF officials have stated that the ser­ the army had 482,500 active-duty soldiers
a decision about whether Air Combat Com­ vice needs to have a readiness level of about in 2001 and 570,000 at the height of opera­
mand (ACC) or Air Force Special Operations 80% to fulfil all the service’s missions. tions in Iraq and Afghanistan.

ihs.com/janes 11 December 2013 Jane’s Defence Weekly | 13

» ANNUAL DEFENCE REPORT 2013
It is still unclear how such a change might
affect procurement and other accounts, as
this depends, among other things, on what
brigade structures come out of the force.
The army does appear to be favouring lighter
rather than heavier (or armoured) brigade
combat teams (BCTs). Service officials
expect to have a better idea of those changes
in the FY15 budget plan.
Regardless, the active-duty army is to
draw down to at least 490,000 soldiers by
FY17, although Army Chief of Staff General
Ray Odierno revealed in October that the
service is considering accelerating that to
FY15 in order to balance sequestration’s
cuts across end strength, readiness, and
modernisation budgets.
Army end strength of more than 490,000
is funded through overseas contingency
operation (OCO) funds, so the army would
need to reach that level sooner in order to
alleviate sequestration’s pressure on the
base budget.
The army is also reorganising its brigades
as it drops from 45 to 32 BCTs; each will
add a third manoeuvre battalion, while an
additional engineer and fires capabilities will
be placed in each armour and infantry BCT.
The service is inactivating 12 BCTs at first
and then one additional unit while shifting
away from Europe and towards the Pacific,
not just rhetorically but with bodies and force
structure. Ten of the inactivating units are
to be taken from US installations through to
FY17, two of which are from Germany, leav­
ing two BCTs in Europe. During the Cold War
the army’s armoured units in Europe were
considered a key strategic bulkhead against
Soviet and Warsaw Pact forces, but that era
and framework have long passed.
As part of this shift the army is adding
senior personnel in the Pacific while reduc­
ing those positions elsewhere.
There are also now about 82,000 US
Army soldiers assigned to the Pacific; many
of them were committed to roles serving
in Iraq or Afghanistan to meet deployment
needs but have since been prioritised back to
the Pacific.
As for how modernisation efforts will fare
during the drawdown, Secretary of the US
Army John McHugh said that for FY15 the
service is developing two five-year budget
plans, called Program Objective Memoranda
(POMs): one based on the White House’s
official budget request and one based on
sequestration funding levels.
Most major acquisition programme deci-
14 j Jane's Defence Weekly 11 December 2013
US Army soldiers on a joint clearance operation
with Afghan police in western Kandahar.
sions appear to be dependent on which of
those plans is ultimately implemented.
McHugh said about 485 acquisition pro­
grammes have so far been negatively affected
by a federal government shutdown in the first
two weeks of FY14, by sequestration, and by
stop-gap CR budget measures.
“So while we’re not set at this point
to make any announcements about the
Ground Combat Vehicle [GCV], I find it
difficult to envision any significant number
of our development initiatives that won’t
be affected, some very significantly and
some we will have to cancel,” McHugh said
in October. The GCV was once among the
army’s top acquisition priorities, but its
future is now quite uncertain.
McHugh added that other programmes
will see their schedules “stretched out,
which presents problems with costs, cost
per units”, and he noted that even high-pri-
ority efforts could be affected by continued
sequestration, including GCV development
and networking programmes.
Similarly, Gen Odierno said in October
he “needs” the Joint Light Tactical Vehicle
(JLTV) and the GCV, as well as upgrades to
the UH-60 Black Hawk utility helicopter,
AH-64 Apache attack helicopter, and CH-47
Chinook cargo helicopter. However, he
stressed that some of those may be cancelled
TheAmericas
or delayed four or five years.
Army acquisition executive Heidi Shyu
specifically said that “the GCV, being an
expensive vehicle, is at risk” with seques­
tration. She also flatly said that the Armed
Aerial Scout (AAS) programme, meant
to replace ageing OH-5 8 Kiowa Warrior
helicopters, would not happen as a new start
because it would push out too many other
programmes already on the books.
Army planners are hoping to have an
Armoured Multi-Purpose Vehicle (AMPV) - a
replacement for the decades-old Ml 13-
series armoured personnel carriers - poised
for rapid production in case armoured forces
are needed in the future.
Current plans would see the AMPV pro­
duced over 13 years, in part to keep budgets
low but also to keep the platform ready for
faster production in case the army needs to
deploy its armoured forces. A contract award
for the programme is expected sometime in
late 2014. BAE Systems has said it expects
to compete with a platform based on the
Bradley infantry fighting vehicle, while
General Dynamics has said it may submit a
variant - possibly tracked - of the Stryker
wheeled combat vehicle.
As for lighter wheeled platforms, the JLTV
programme began testing in September for
its 14-month EMD phase after competing
contractor teams AM General, Lockheed
Martin, and Oshkosh each delivered their
prototypes. The effort is scheduled in FY15
to seek Pentagon approval to release a
final request for proposals (RfP) and then
downselect to one contractor.
Meanwhile, the army is working to plan
for its future and in late 2012 rolled out its
Capstone Concept (ACC) that essentially
revised the service’s predictions for what
the future operational environment might
look like. Among other things it posits that
the speed and reach of human interaction
and increased access to military capabilities
are going to continue making the opera­
tional environment even more unpredict­
able and complex.
The ACC will, along with other guidance,
be used in conjunction with wargaming to
create army operating concepts.
One of the interesting lessons that
emerged from studying the ACC and from
subsequent wargaming in 2013 was the dif­
ficulty of counter-proliferation operations: a
timely lesson given the challenges that arose
with Syria’s chemical weapons. The army’s
study was of a failed-state scenario, where
ihs.com/janes
 ANNUAL DEFENCE REPORT 2013 «
the service found that demands for techni­
cal specialist capabilities (such as nuclear
and chemical weapons expertise), as well as
for personnel to secure that environment,
were challenging to meet. The army also
determined that it needed far faster and less
predictable deployments, as it was too reli­
ant on obvious ports and airfields.
US Navy
To weather sequestration’s storm, the USN
used unobligated FY12 funds to cover some
of the spending cuts mandated by the 2011
Budget Control Act.
However, absorbing the approximately
USD4 billion reduction on top of an existing
USD4.6 billion shortfall forced the navy to
truncate and cancel ship deployments, shut
down a carrier air wing, and reduce flying
hours throughout the fleet as well as defer
repairs on ships and aircraft. All these mea­
sures, officials said, were taken to preserve
funds to support the naval forces operating
forward and to train those on schedule to
relieve them.
If sequestration continues in FY14 the
navy will have to contend with even deeper
budgetary cuts. Chief of Naval Operations
Admiral Jonathan Greenert has said the
USN expects a USD 14 billion reduction to
its FY 14 budget. He warned that the second
round of cuts would particularly affect
acquisitions, with no prior-year funds avail­
able for reprogramming.
Under the sequester, the navy faces poten­
tial procurement losses of a Littoral Combat
Ship (LCS), an Arleigh Burke-class destroyer,
a Virginia-class submarine, and an Afloat
Forward Staging Base (AFSB) on the ship
side and about 25 aircraft, including a mix
of helicopters as well as airframes from the
P-8A Poseidon and F-35 programmes.
Repairs and maintenance for in-service
ships and aircraft would also take a hit, with
cancellations of 34 ship availabilities and
about 190 aircraft availabilities.
In early February the USN revised its long­
standing fleet size requirement and reduced
its needed combatant vessels to 306 ships,
down from the previous requirement of 313
ships that was first established in 2005. Offi­
cials noted that the change was based upon
operational requirements and not budgetary
pressures. The decision reduced the overall
LCS class to 52 hulls - down three ships
from the original 55-ship plan - and cut the
large surface combatant requirement to 88
ships from 94.
Continuing its support for the DoD’s
pivot to the Asia-Pacific region, the USN
deployed the fleet’s first LCS, USS Free­
dom (LCS 1), to Singapore on its maiden
operational deployment to Southeast Asia
in 2013. The lead ship of the steel monohull
variant remained under scrutiny as it tran­
sited the Pacific in March, making port calls
in Hawaii and Guam before finally reaching
Singapore, where it debuted in May during
the International Maritime Defence Exhibi­
tion and Conference (IMDEX) Asia.
During IMDEX Adm Greenert told report­
ers that the navy intends to operate 11 LCSs
in the Asia-Pacific region by 2022, with
four forward-deployed to Singapore and the
remaining seven replacing the fleet’s mine
countermeasures (MCM) ships forward-
deployed in Sasebo, Japan.
However, Freedom’s deployment has not

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ihs.com/janes 11 December 2013 Jane's Defence Weekly | 15

 » ANNUAL DEFENCE REPORT 2013
The USN’s newest aircraft carrier, Gerald R Ford, was moved on
17 November to Newport News Shipbuilding’s Pier 3, where it will
undergo additional outfitting and testing for the next 28 months.
Huntington Ingalls Industries: 1478644
been without problems; a loss of propul­
sion and coolant leaks early on and recent
waterjet signal issues have caused the ship
to remain pierside for days of repairs.
As Freedom concludes its deployment and
returns to its home port in San Diego, Cali­
fornia, its sister ship, USS Fort Worth (LCS
3), continues to prepare for its inaugural
deployment in mid-2014. Meanwhile, USS
Independence (LCS 2), the lead ship of the
Austal USA-General Dynamics aluminium
trimaran-variant LCS, continues to host the
USN’s testing of the LCS mine warfare mis­
sion package. Austal handed over its second
ship, Coronado (LCS 4), in late September.
Elsewhere on the waterfront, the USN
launched aircraft carrier Gerald R Ford: the
lead ship of the new class replacing the cur­
rent Nimitz-class carriers. Ford is being com­
pleted and tested at Newport News Shipbuild­
ing, where the inactivated Enterprise - to be
replaced by Ford - is being defuelled.
The USN also launched Zumwalt (DDG
1000), the lead ship of its advanced-genera-
tion destroyer class designed for land-attack
and littoral operations. Upon completion the
16,000-tonne, 185.9 m-long destroyer will
become the navy’s largest surface combatant
ever built. In tandem with the next-gener-
ation class, USN officials also laid the first
keel of the Arleigh Burke-class (DDG 51)
restart programme.
The lead ship of the USN’s new aviation-
centric amphibious assault ship class,
America, completed builder’s trials in 2013
and is on schedule for handover in 2014. Its
builder, Ingalls Shipbuilding, also handed
over San Antonio-class amphibious transport
dock Somerset (LPD 25). In Alaska, the navy
commissioned USS Anchorage (LPD 23): its
16 j Jane’s Defence Weekly 11 December 2013
seventh of 11 San Antonio-class ships.
On the logistics and sealift front 2013 saw
the handover of the navy’s first Mobile Land­
ing Platform, Montford Point (MLP 1), and
the second Joint High Speed Vessel, Choctaw
County (JHSV 2). Navy officials announced
they had tapped lead ship USNS Spearhead
(JHSV 1), which completed its initial opera­
tional test and evaluation in October, for
deployment to Latin America in 2014.
Worries about the navy’s fiscal challenges
prompted the usually ‘silent’ submarine
force to speak out about concerns over
acquiring the Ohio-class ballistic-missile
submarine replacement. Although navy
leadership has postured the Ohio replace­
ment programme as the USN’s top prior­
ity, undersea warfare officials attested to
lawmakers that the service cannot afford
to procure the 10 boats without a USD60
billion supplemental funding measure. They
stressed that the planned construction start
date in 2021 - already delayed two years to
help alleviate budgetary pressures - must be
set in stone.
For the navy’s autonomous aircraft sys­
tems, 2013 turned out to be a banner year.
In May the X-47B Unmanned Combat Air
System-Demonstrator (UCAS-D) catapult-
launched off the flight deck of aircraft carrier
USS George H W Bush at sea. It returned to the
same carrier in July to make its first arrested
landing off the US East Coast. In November
the X-47B conducted additional at-sea flight
trials on board USS Theodore Roosevelt.
In May another autonomous air system,
the MO~4C Triton - the navy’s high-altitude,
long-endurance unmanned aerial vehicle
(UAV) - successfully completed its first flight
in Palmdale, California.
The Americas
The navy also took delivery of the MQ.-8C
(a larger variant of the Fire Scout vertical
take-off UAV), which made a successful
maiden flight in October. Intended for
employment on board the LCS and other
surface ships, the MQ-8C may see an early
deployment in 2014.
The F-35B also saw some advancements
and conducted sea trials on board USS Wasp
(LHD 1) for the second time. As part of the
F-35’s at-sea development testing phase,
the trials involved the first shipboard night­
time flight operations of the short take-off/
vertical landing F-35B and included the first
launch and recovery of the aircraft at sea by a
UK test pilot. As for the carrier variant of the
JSF, in 2013 the navy received its first F-35C
at Eglin Air Force Base, where the USN’s
VFA-101 Fleet Replacement Squadron is
training aircrew and maintenance personnel
to operate and repair the aircraft.
In November the USN despatched a
number of ships, including the George
Washington carrier strike group as well as
LCS Freedom, to aid in relief efforts in the
Philippines in the wake of Typhoon Haiyan.
Officials see the operation as a harbinger for
future Asia-Pacific missions and a validation
for the navy’s shift to the region.
Latin America
Latin America’s security outlook for 2014
is expected to continue revolving around
militaries fighting elusive and heavily armed
transnational non-state actors. Most of these
are criminal groups financed by or involved
in the illegal narcotics trade, but increasingly
taking part in other illicit activities such as
human trafficking, extortion, oil and gas
siphoning, and illegal logging and mining.
Military requirements have, therefore,
centred on helicopters; UAVs; land patrol
vehicles; light armour; interceptor craft;
and coastal, maritime, border, and airspace
surveillance systems.
Latin American countries are increas­
ingly opting for indigenous production
programmes, as well as establishing local
maintenance and support capabilities to
guarantee their equipment’s serviceability.
Argentina, Brazil, Colombia, Chile, Cuba,
Ecuador, Mexico, Peru, and Venezuela are all
building mostly foreign and some indigenously
designed naval vessels at national shipyards.
Despite funding difficulties and large-scale
social protests, Brazil remains the dominant
and most advanced defence industry in the
region. Development of PROSUB nuclear
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» ANNUAL DEFENCE REPORT 2013
and conventionally powered submarines,
KC-390 tanker-transport aircraft, and
Guarani armoured personnel carriers remain
a priority that has secured continued fund­
ing, although money for the FX-2 multirole
fighter and PROSUPER surface warfare
programmes remains stalled.
Cuba, meanwhile, is building Damen
4207 and 5009 patrol vessels for Venezu­
ela and continues to rely on local recycling
and re-engineering programmes to produce
platforms such as BPH-390 missile-armed
patrol vessels and 6x6 and T-34 tank-based
self-propelled howitzers.
For Colombia, the Havana Peace talks
between the government in Bogota and the
Revolutionary Armed Forces of Colombia
(FARC) insurgent group have stalled and
counter-insurgency operations there con­
tinue. Growing instability in Venezuela, ris­
ing tensions with Nicaragua, and a flight of
Russian Tupolev Tu-160 strategic bombers
over Colombian airspace in early November
caused Colombian lawmakers to shift their
focus towards reassessing the country’s con­
ventional defence capabilities and not just
those for irregular warfare.
Congressional concerns are likely to
result in a new set of requirements from
2014, with fighters, lead-in fighter trainers,
and self-propelled artillery topping the list.
Colombia and Chile continue to build Fass-
mer OPV-8O offshore patrol vessels (OPVs)
at local shipyards and the former has begun
to export naval products, with the first of
four LPR-40 river patrol boats delivered
to Brazil in 2013.
Colombia and Peru are also strengthening
The Brazilian Army has been working to boost its air-defence capabilities for the 2014 FIFA World
Cup and 2016 Olympics Games and in May began receiving Krauss-Maffei Wegmann Gepard 1A2
self-propelled anti-aircraft gun systems, among other weapons.
18 [ Jane's Defence Weekly 11 December 2013
their respective aerospace industries, with
the former embarking on a comprehensive
upgrade ofitsl4EmbraerEMB-312 Tucano
armed trainers and the latter assembling 16
KAI KT-1 Wong Bee basic trainers.
Mexico continues to use its military
as the main force fighting armed groups
throughout its territory, but the Mexican
armed forces have redeployed and are now
using more surgical, special forces tactics.
A large modernisation programme has been
launched that includes production of DN-XI
4x4 tactical armoured vehicles along with
continued production of 3,600-ton BAL-
class amphibious vessels, Damen Stan Patrol
4207 coastal patrol boats, and Dockstavar-
vet IC16M interceptor craft under licence.
In 2013 the Mexican armed forces
ordered 10 Zlin 242 Guru light aircraft/
trainers, 12 Beechcraft T-6C+ Texan II train­
ers, one Lockheed Martin C-l 30J-30 trans­
port, 4 Airbus Military CN235 Persuader
maritime patrol aircraft, and 7 AgustaWest-
land AW109SP helicopters as part of ongo­
ing modernisation efforts.
Likewise, several Central American
countries, including El Salvador, Guatemala,
and Honduras, have begun programmes to
modernise their ageing inventories. Hondu­
ras received a significant boost with delivery
of the first of two Damen Stan Patrol 4207
patrol vessels, while El Salvador has sought
to acquire 10 Cessna A-3 7B Dragonfly light
strike aircraft from Chile.
The Latin American defence and secu­
rity environment is expected to remain
dominated by counter-insurgency opera­
tions requiring asymmetric solutions, but as
TheAmericas
of December 2013 there are three tension
points that could lead to potential inter­
state conflict in 2014: the Gulf of Fonseca
maritime dispute between El Salvador and
Honduras; increasing tension over the Inter­
national Court of Justice’s November 2012
ruling favouring the expansion of Nicaragua’s
Exclusive Economic Zone around Colombia’s
Caribbean archipelagos; and Venezuela’s
increasingly unstable economic situation.
Venezuela’s stability is of regional concern
as it threatens to increase friction with the
country’s neighbours, such as Guyana, a
large part over which Venezuela maintains
a persistent claim. Tensions have not been
alleviated by the Venezuelan government,
which has requested a USD5.9 billion loan
from Russia to finance new defence procure­
ment in 2014.
Canada
Canada’s defence industry in 2013 was char­
acterised by plenty of talk but little action.
On paper, notionally defence-friendly
ministers from the conservative Harper
government have announced scores of
defence procurements for land, sea, and air
assets. However, delays, compliance issues,
budget cuts and more mean that few pur­
chase orders have actually been issued.
The upshot is that Canada is awash with
‘zombie’ procurements, which have a
semblance of life but are essentially like the
walking dead.
The latest programme to stall was a
USD4.74 billion (CAD5 billion) contract
for 28 Sikorsky CH-148 Cyclone marine
helicopters. Just four test units have been
shipped in a programme that was awarded
in 2004, but there has been little progress
since then. Competing explanations for the
delays centre around design and specifica­
tion changes related to the 2009 crash of a
civilian version of the Cyclone that caused
17 deaths.
Minister of National Defence Rob Nichol­
son appears to have lost patience with the
project. In October his department and Pub­
lic Works and Government Services Canada
initiated a ‘data-gathering engagement’ that,
among other things, asked alternative pro­
viders Eurocopter and AgustaWestland, as
well as Sikorsky itself, to suggest solutions
to get the project back on track.
The marine helicopter programme’s delays
mirror those in several other defence procure­
ment initiatives. For example, the future of
the Royal Canadian Army’s USD 1.8 9 billion
ihs.com/janes
 ANNUAL DEFENCE REPORT 2013 «
Close Combat Vehicle initiative also now
appears in doubt. Analysts say the procure­
ment is significantly behind schedule and Rick
Hillier, a former Canadian chief of defence
staff, recently suggested cancelling it and shift­
ing the funds to other uses.
Meanwhile, Canada’s USD37.5 billion
National Shipbuilding Procurement Strategy
(NSPS), which was announced with great
fanfare in mid-2010, has attracted the
attention of the Canadian auditor general’s
office, which has been reviewing steps taken
so far. A design contract has been awarded
for patrol ships and the names of two pro­
posed Joint Support Ships were announced
(HMCS Queenston and HMCS Chateauguay,
A USN guided-missile frigate and the Royal Canadian Navy destroyer HMCS Iroquois transit the
in recognition of the Queenston Heights Caribbean Sea during the 2013 ‘UNITAS’ multinational maritime exercise in September.
and Chateauguay battles during the War of
1812). Shipyards on Canada’s Atlantic and to present alternatives. in-service support, which on Canada’s exist­
Pacific Coasts are being upgraded so they can The fate of the JSF in Canada will be heav­ ing F-18 Hornet fighters are currently being
handle NSPS construction. ily influenced by the release of a report on performance by Montreal-based L-3 MAS.
Canada’s troubled bid to buy F-35 JSFs defence sector procurement written by Tom The fact that a Lockheed Martin deal
has also seen little headway. Following huge Jenkins, a Canadian business sector expert, would probably move much of that work out
run-ups in projected costs and months of earlier this year. The report recommended of the country could thus prove to be a major
bureaucratic finger-pointing, the Harper that Canada focus on building key industrial additional hurdle in getting the JSF off the
government has asked other manufacturers defence capabilities, notably in the area of ground again in Canada. ■

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ihs.com/ianes 11 December 2013 Jane’s Defence Weekly I 19

» ANNUAL DEFENCE REPORT 2013
While many of the traditional major European defence markets continued to suffer falling budgets in
2013, Turkey and Poland cemented their place as emerging European defence players. Meanwhile,
Russia continued apace with its massive military rejuvenation efforts
efence budgets continued to fall in
D Western Europe, while even the
growing economies in Eastern Europe
saw their growth levels slow in 2013, leading
to consequent trimming of budget plans.
The most notable cuts of the year came in
August from France, whose Projet de Loi de
Programmation Militaire (LPM) 2014-2019
saw widespread cutting of force numbers,
similar to that announced by the UK’s 2010
Strategic Defence and Security Review. Even
Poland, which has been significantly increas­
ing defence spending in recent years, had to
slightly trim its overall defence budget this
year - even if procurement was unaffected.
Budget growth continues to escalate rapidly
in Russia and Turkey, albeit at a slightly lower
than expected pace.
The end of the year promises a meet­
ing of EU leaders to discuss defence policy,
with many holding out hopes for tangible
measures on streamlining European defence
processes, industry, procurement, and co­
operation. For a number of Western nations,
co-operation through NATO and in particular
‘Smart Defence’ efforts continue to play a
large part in their plans - although several
countries remain sceptics. As great a priority
for NATO’s European nations is maintaining
their levels of interoperability, which are cur­
rently at an all-time high following 12 years
of coalition warfare in Afghanistan.
With the culmination of the combat
mission in Afghanistan looming in 2014,
2013 saw many European nations begin in
earnest the process of withdrawing troops
and equipment from theatre, with several
having already completed their withdrawals.
In Turkey the prospect of an end to almost 30
years of conflict with the separatist Kurdistan
Workers Party (PKK) was raised following a
ceasefire call by jailed PKK leader Abdullah
Dassault saw its domestic production rate for
the Rafale multirole fighter slashed from 26 per
year to 11 for the period 2014-19.
20 ! Jane’s Defence Weekly 11 December 2013
Ocalan in March. For its part, the Turkish gov­
ernment has announced significant reforms,
although the ceasefire is currently looking
increasingly delicate.
Air
The Russian aerospace sector was something
of a mixed bag in 2013, with Sukhoi continu­
ing to enjoy success, and rival MiG continuing
to suffer setbacks. However, overall Russia’s
massive modernisation push continued
largely unabated; despite a slowdown in
Russia’s economic growth causing the Rus­
sian Ministry of Defence (MoD) to cut its
spending plans by 1.2%, defence spending
is still planned to rise by 42.5% in real terms
between 2013 and 2016.
Russia’s flagship fifth-generation fighter
programme, the Sukhoi T-50 (PAK-FA),
continued to progress in 2013, with a fifth
prototype aircraft making its maiden flight
in August. Factory trials of the T-50 are
expected to be completed by United Aircraft
CorporatioTffrjAC) before the end of the
year, while 2014 should see the Russian
MoD launch its own state testing programme
for the aircraft. However, the T-50 is a long
way away from entering series production or
frontline service.
The Sukhoi Su-35 ‘Flanker-E’ made its
Europe
debut outside Russia at June’s Paris Air Show,
arguably stealing the show - just as it did when
compared to the smaller MiG-35 ‘Fulcrum-F’
in 2013. The first six series-production aircraft
entered Russian Air Force service at the
close of 2012 and, with 48 aircraft currently
under contract, state acceptance tests began
in February. Sukhoi also continued to mark
deliveries of its Su-34 ‘Fullback’, with the
company possessing a strong order book that
also includes Su-30SM and Su-30M2 fighters
for the Russian Air Force and Navy.
MiG, by contrast, began the year with high
hopes for the MiG-35, pressing for a produc­
tion contract in the first half of 2013. How­
ever, such optimism was not to be borne out,
with Russian Deputy Defence Minister Yuri
Borisov stating in August that Russia would
not place a contract for the aircraft until at
least 2016: a state of affairs he confirmed in
November. MiG also confirmed to IHS Jane’s
in June that it has abandoned work on its
Skat unmanned combat air vehicle (UCAV),
but is now working on a new, similar, type of
ihs.com/janes
Europe
unmanned aerial vehicle (UAV). MiG does,
however, still have orders for about 60 MiG-
29-based aircraft from India and Russia and
may also receive an order for the MiG-2 9SMT
from the Russian MoD before an eventual
MiG-3 5 order.
January may have seen Dassault Rafales
flying from Saint-Dizier to conduct strikes
around Gao in the opening waves of France’s
intervention in Mali, but domestically the
year was arguably a challenging one for the
platform. Despite seeing progress on the
latest standard for the aircraft, Rafale F3R,
and the delivery of the first production
version fitted as standard with an active
electronically scanned array (AESA) radar
in September (a first for any of the ‘Euro-
Canards’), production of the aircraft for the
French market has been drastically slowed.
Previously running at 11 Rafales per year,
production for the French market was cut by
almost two thirds to only 26 for the period
2014-2019 under the defence funding
programme (LPM) announced in August. The
viability of this rate of production has been
called into question, given that an export
contract with India is still elusive. Although
the potential initial Indian order totals 126
aircraft, only 18 would be built in fly-away
condition at Merignac, while the level of
production at Merignac on Indian-assembled,
and eventually Indian-built, aircraft remains
to be defined. As such 2013 and the pressures
on the French defence budget have put the
Rafale on an unsteady footing and it will need
to have a strong year in 2 014 - including a
signed export contract - to place production
in a more secure position.
Despite gaining new export orders abroad,
the Eurofighter Typhoon had a largely
uneventful year in Europe, and the question
over when the aircraft will gain an AESA
capability continued to go unanswered. The
Paris Air Show in June did at least see the
signing of a contract to integrate the MBDA
Meteor beyond-visual-range air-to-air missile
(BVRAAM) onto the aircraft, while a contract
was signed in October for its Evolution Pack­
age 2, providing a range of avionics, radar, and
other upgrades, albeit not an AESA capability.
2013 was a strong year for the JAS 39
Gripen in Europe, with Saab securing a devel­
opment contract for the latest version of the
aircraft, the single-seat Gripen E, on 15 Feb­
ruary. Worth SEK2.5 billion (USD390 mil­
lion) until 2014, this was then significantly
increased in a subsequent contract in March
ihs mm/ianeR
ANNUAL DEFENCE REPORT 2013 «
worth SEK10.7 billion and carrying through
until 2023. Sweden is currently planning to
receive 60 Gripen E multirole fighter aircraft,
for which assembly of the first pre-produc­
tion model began in July.
Switzerland is also planning to purchase
the Gripen E, with 2013 seeing the coun­
try’s buy of 22 aircraft going through a
lengthy process of parliamentary voting.
Despite vocal opposition to the purchase, the
programme cleared its final parliamentary
vote on 27 September with solid majorities
of 119:71 in the Swiss lower chamber of
parliament and 25:17 in the upper cham­
ber. However, a contract signature remains
elusive, with 2014 heralding the prospect of
a national referendum on the issue in either
May or September.
Likewise the Gripen travelled a rocky road
in the Czech Republic, where the Army of
the Czech Republic (ACR) has operated 14
JAS 3 9 C/D fighters on lease from Saab since
2004. With this deal set to expire in 2014,
2013 saw protracted contract negotiations
between the Czech Republic and Saab over a
potential renewal of the lease. The collapse
of the government of Petr Necas in June
threatened to throw a spanner in the works,
while the US sought to ruin the Gripen’s
chances with the offer of used Lockheed
Martin F-l 6 fighters to the ACR. However,
on 11 September the Czech caretaker
government led by Jin Rusnok opted to
renew the Gripen lease for a further 14
years, although this decision is subject to
final approval by the new Czech government
emerging from the elections of late October.
As JDW went to press, a new Czech govern­
ment had yet to form.
The Lockheed Martin F-35 Lightning II
Joint Strike Fighter (JSF) had another mixed
year in Europe. January saw a setback to the
programme, with Turkey postponing its
January 2012 decision to purchase an initial
two, of a planned 100, aircraft, blaming
falling orders, rising costs, and doubts over
the aircraft’s capabilities. April then saw a
further European setback for the programme
when the Netherlands opted to ground its
two initial operational test and evaluation
(IOT&E) aircraft amid political opposition to
the programme. In September the Nether­
lands formally opted for the F-35, announc­
ing plans to purchase 37 aircraft. The two
Dutch IOT&E aircraft subsequently returned
to training operations in October.
The F-35 programme continued to move
forward in the UK: the country’s third IOT&E
aircraft began operations in June. In Norway
the aircraft also made headway, with approval
for the purchase of a further six aircraft, of a
planned 52, granted by the Norwegian parlia­
ment on 27 June.
Turkey’s F-35 purchase may be facing
headwinds, but the same cannot be said for
the majority of the country’s other aircraft
programmes. The past year saw Turkey truly
establish itself as a significant new defence
industrial player as the products of over a
decade of heavy and targeted investment
into the country’s defence industry began to
bear fruit.
Notably, the Turkish Aerospace Industries
(TAI) Anka medium-altitude long-endurance
(MALE) UAV completed its acceptance flight
tests in January. This was followed up with an
order for 10 of the aircraft on 25 November,
making the Anka the only European MALE
UAV currently in serial production.
TAI also made headway on a third Turkish
aviation project in 2013, unveiling three
different concepts for Turkey’s planned
 » Europe
fifth-generation F-X fighter programme in
May. The aircraft has been designed under a
24-month concept design contract, awarded
in 2 011, and is planned to eventually replace
Turkey’s F-16s. With this work scheduled to
be completed by the end of 2013, Turkey is
soon expected to decide whether to further
pursue what is a highly ambitious, potentially
challenging, and expensive project.
Another major milestone for Turkey’s
aviation industry came in August with the
maiden flight of TAI’s Hiirku§-A turboprop
basic trainer that ended a 60-year hiatus in the
production and design of manned fixed-wing
aircraft in Turkey. Three versions of the air­
craft are currently planned: basic (Hurku§-A),
advanced (Hiirku§-B), and armed (Hiirku§-C).
In September, Turkey began contract discus­
sions with TAI for serial production of 15
Hiirku§-As. Meanwhile, in October the coun­
try issued a formal request for proposals (RfP)
to purchase 50 basic turboprop trainers, with
deliveries planned to run from 2015-16.
Poland also made progress on buying new
trainer aircraft in 2013, formally restarting
efforts to replace its ageing TS-11 Iskra jet
trainer aircraft on 25 February, when the
Ministry of National Defence (MND) launched
its advanced jet trainer (AJT) competition.
The successor to the previous Lead-in Fighter
Trainer (LIFT) programme that was cancelled
in November 2011, the project aims to pur­
chase eight jet trainers included in a holistic
training package. The programme made rapid
pace throughout the year, with initial propos­
als received on 7 June and the three final bids
submitted on 20 November. A decision is now
expected in early 2014 on whether Poland
opts for the Alenia Aermacchi M-346 Master,
the BAE Systems Hawk AJT, or the Korean
Aerospace Industries T-50 Golden Eagle,
offered via Lockheed Martin UK.
The beginning of the year saw Germany’s
planned purchase of five Northrop Grumman/
EADS RQ-4E Euro Hawk UAVs stopped by
the spiralling cost of certifying the aircraft to
fly in civilian airspace. Originally intended to
provide a high-altitude signals intelligence
(SIGINT) capability, fears that the cost of gain­
ing airspace certification for the aircraft could
cost as much as EUR600 million (USD815.4
million) saw the programme cancelled in May.
Meanwhile, the General Atomics MQ.-9
Reaper UAV had a good year in Europe,
securing two new customers in the shape of
France and the Netherlands. France formally
requested a USD 1.5 billion package of 16
Reapers from the US in June, although the
22 | Jane’s Defence Weekly 11 December 2013
LPM subsequently cut France’s MALE UAV
requirement down to 12 aircraft. France
has remained largely tight-lipped about its
MQ-9 purchase; while a contract is known to
have been signed, the eventual number to be
purchased remains unclear. However, French
personnel began training on the platform
in the US in September and French Defence
Minister Jean-Yves Le Drian confirmed in
October that two Reapers, purchased for
EUR150 million, will be active in the Sahel
before the end of 2 013.
The Netherlands followed France’s
example in November, announcing its intent
to purchase four MQ.-9 Reapers, which, like
Italy’s, will be unarmed. The Dutch Reapers
should become operational in 2016, while
the UK’s final batch of five MQ-9s are set
to enter service imminently. It was also
revealed in late October that the UK’s BAE
Systems Taranis UCAV technology demon­
strator had made its maiden flight, although
a formal announcement from the UK MoD
remains outstanding.
This year saw the start of Airbus Military
A400M Atlas transport aircraft deliver­
ies. The aircraft, the first military airlifter
conceived to meet civilian air worthiness
standards, received its full civil type certi­
fication on 13 March. This was followed in
July by the A400M receiving approval for
its military type certification, after which
aircraft MSN007 was delivered to the French
Direction Generale de l’Armement (DGA)
on 1 August. A second aircraft was delivered
to the DGA on 6 November, with a third -
which made its maiden flight on 9 August -
planned for imminent delivery to the Turkish
Air Force as JDW closed for press.
Looking ahead to 2014, theA400M
programme should also mark first deliver­
ies to the UK Royal Air Force (RAF) and
German Luftwaffe. With the programme
now delivering to customers, Airbus Military
hopes to expand its 174-strong order book
for the aircraft. Although already contracted
to deliver aircraft to eight different nations,
only one of these (Malaysia) is an export
beyond the original seven launch customers
within the Organisation of Joint Armament
Co-Operation (OCCAR).
2013 also saw the RAF begin to recapital­
ise its airborne SIGINT capability, with the
delivery of the first of three Boeing RC-135W
Rivet Joint aircraft from L-3 Communications
on 12 November.
Meanwhile, the question of how the
smaller, poorer nations of Europe maintain
ihs.com/janes

a credible and affordable air defence capabil­
ity only gets more challenging as national
budgets shrink and price inflation within the
industry continues to rise. Besides abandon­
ing the capability and relying on another
country to protect their airspace, as with
the Baltic states and NATO, procurement of
second-hand aircraft, the lease of new/old air­
craft, or the attempt to maintain ever-ageing
aircraft in an airworthy condition remain the
only available options to the poorer European
nations. This year saw a number of nations
take different paths to square this particu­
larly tricky circle.
Romania’s plans to replace its Mikoyan
MiG-21 Lancer (upgraded ‘Fishbed’) fleet
continued apace in 2013 in spite of opposi­
tion from the European Commission. In June
Romania issued a document to procure used
Lockheed Martin F-16 fighters from Portugal,
while in July legislation backing the purchase
was approved by Romanian President Traian
Basecu. In order to muster enough aircraft
to sell to Romania, Portugal purchased three
F-16s from the US in August and the deal was
completed in October, with a contract signa­
ture for 12 F-16 aircraft signed between Roma­
nia and Portugal and valued at about USD250
million. Romania subsequently requested
a weapon package for the aircraft, worth
USD457 million, from the US in November.
In contrast to Romania’s decision to
replace its MiG-2 Is, in June Croatia opted to
forsake purchasing a new fighter and instead
decided to upgrade its existing fleet of MiG-
2 Ibis ‘Fishbed-Ls’. A contract was signed by
the Croatian MoD with Ukrspecexport on 8
July, with the firm to upgrade seven fighters
of the Croatian Air Force and Air Defence,
which will also purchase a further five MiG-
21s from Ukroboronprom’s State Enterprise
(SE) Odessa Aviation Plant.
Much like Croatia, and unlike neighbour
the Czech Republic, with its lease of Gripens,
Slovakia opted in September to upgrade its
12 MiG-29 ‘Fulcrum’ fighters. In theory Slo­
vakia’s ‘Fulcrums’ shouldn’t need upgrading,
having already undergone a modernisation
programme from 2004-8 to extend their
service life up to 2035. However, a familiar
tale of poor programme management and the
Slovakian MoD failing to enforce past sup­
port arrangements saw widespread cannibali-
sation of aircraft due to a shortage of spares.
Land
A whole host of new vehicle platforms were
unveiled at the three major European land
Europe «
shows of the year: IDEF in Turkey, MSPO in
Poland, and DSEI in the UK. In particular
IDEF, in Istanbul in May, saw a flurry of
new vehicles making debuts, with Turkish
land systems firm Otokar displaying three
new vehicles: the Ural and Cobra II 4x4
armoured patrol vehicles and the Tulpar PROTECTS YOUR MISSION
tracked infantry fighting vehicle (IFV).
FNSS unveiled its Kaplan STA-Px tracked
armoured reconnaissance vehicle and its
Korkut amphibious armoured tracked
platform, while Aselsan released further
details on its Hisar-A design for Turkey’s
low-altitude air defence missile system
(T-Laladmis) requirement and the Hisar-B
design for the medium-range air defence
system (T-Malamids) programme. Turkey
subsequently conducted the first test firings
of the Hisar-A system on 6 September.
At London’s DSEI show in September Nex-
ter Systems unveiled its new Tactical Infantry
Transport & Utility System (Titus) 6x6
armoured personnel carrier (APC), initially
aimed at the export market. Patria unveiled a
new, as yet unnamed, 8x8 vehicle referred to
as the Next Generation Armoured Wheeled
Vehicle Concept, building on the company’s
experience with the 8x8 Armoured Modu­
lar Vehicle. General Dynamics unveiled a
new steel-hulled version of its Ocelot light
protected patrol vehicle (LPPV). The company
also saw a further order for 24 Ocelots,
known in UK service as Foxhounds, for the
British Army, bringing the UK’s total orders of
the vehicle to 400.
Poland’s MSPO show, held in Kielce in KMW
KRAUSS-MAFFE! WEG MANN
September, saw Obrum, in partnership with
BAE Systems, unveil its PL-01 AFV concept,
aimed at the Direct Support Vehicle (DSV)
element of the Polish Armed Forces’ Univer­
sal Modular Tracked Platform (UMPG) pro­
gramme. AMZ Kutno, meanwhile, debuted The predator
its Bobr 4x4 amphibious vehicle, touted to
among all MBTs
replace Poland’s BRDM-2 scout cars, and
the LPU 4x4 light strike vehicle, aimed at ■ superior firepower
a requirement for Polish special forces and ■ unique mobility
reconnaissance units. Huta Stalowa Wola
■ excellent protection
(HSW) unveiled a version of its Rak 120 mm
mortar system installed on a Rheinmetall ■ optimal command
Defence Marder 1A3 infantry fighting and control
vehicle (IFV) hull - understood to be under ■ unmatched reliability
development for a Chilean requirement.
Jelcz-Komponenty, part of HSW, showed its
| www.kmweg.com |
new 443.32 4x4 truck, aimed at a large Pol­
ish requirement.
Throughout 2013 Poland was involved
in negotiations with suppliers to increase
its inventory of Rosomak (Patria AMV) 8x8
11 Doromhor 9D1 Q lancs’o r'lcyfoni-'a \A/ocjLH\/ I 0*3
 » ANNUAL DEFENCE REPORT 2013 Europe

wheeled APCs. July saw Poland sign a new

agreement with Finland for licensed produc­
tion of the AMV in Poland, while October saw
the country agree an extension to its licence
for the Oto Melara Hitfist-30P vehicle turret.
With these agreements signed, Poland signed
a USD544.1 million contract on 24 October
for an additional 307 new-build Rosomaks,
bringing the country’s eventual Rosomak
fleet to 5 7 0 vehicles.
Not satisfied with this level of modernisa­
tion in its armoured force, Poland signed
a contract on 22 November for a further
119 Leopard 2 main battle tanks (MBTs)
from Germany, plus a further 200 recovery
and utility vehicles to provide a complete
modernised equipment set for one of its
armoured brigades. This will mark the first
deliveries of MBTs to a European NATO
member since 2010.
Poland also moved forward with its
plans to comprehensively modernise its air
defence capabilities in 2013, beginning the
medium-range element of its Shield of Poland
programme in June.
Meanwhile, in February Denmark downse-
lected five vehicles from an original field of
eight for the trials element of its Ml 13 APC Piranha 5 and the Nexter Systems Vehicule from potential missile attacks emanating
replacement competition. Split between Blinde de Combat d’Infanterie (VBCI). The from the conflict in neighbouring Syria.
three tracked and two wheeled vehicles, the trials programme ran for 17 weeks from April Three NATO nations - Germany, Nether­
bidders are competing for a potential order of to September, but plans to select a winner lands, and the United States - each deployed
about 400 vehicles. The three bidding tracked in February 2014 are understood to have two missile batteries, comprising both the
vehicles are the BAE Systems Armadillo, the slipped, given the emergence of a Danish Patriot Advanced Capability 2 and 3 (PAC-2/
FFG Flensburger Protected Mission Module request for updated indicative offers from PAC-3) missile configurations. Turkey asked
Carrier (PMMC) G5, and the General Dynam­ each bidder. NATO to extend the Patriot deployment on
ics European Land Systems (GDELS) - Santa In January NATO began to stand up six 8 November, with the Netherlands confirm­
Barbara Sistemas ASCOD 2. The two bidding batteries of Raytheon Patriot missiles in ing it would maintain its presence at Adana
wheeled vehicles are the GDELS-MOWAG southeast Turkey to protect the country on 15 November and the United States
announcing it will maintain its two batteries
May saw Turkey unveil a host of armoured vehicles at the IDEF defence exhibition in Istanbul. at Gaziantep on 18 November. Given that
Otokar’s new Tulpar IFV is pictured.
negotiations are currently still under way on
the formation of a government in Germany
following the elections there, the country
had yet to decide whether to keep its two
Patriot batteries at Kahramanmaras as JDW
went to press.
After years of competition - and inde­
cision - Turkey selected the Chinese
HQ-9 surface-to-air missile (SAM) for its
T-Loramids air-defence programme on 27
September. The HQ-9, a derivative of the
Russian S-300 system, had been competing
IHS/Nick de Larrinaga: 1461777

against the S-300 and the Raytheon Patriot

and Eurosam SAMP/T systems. Despite
reportedly offering the best price (USD3.44
billion), and the best industrial participation
package, the Chinese being selected for this
contract caused - and continues to cause -

24 | Jane's Defence Weekly 11 December 2013 ihs.com/janes

Europe
considerable consternation within NATO.
Turkey has asserted that it will be able to
build an interface to integrate the HQ-9 into
the NATO Air Command and Control System
(ACCS), but other NATO members have been
vociferous in their concerns over potentially
giving Chinese technicians access to sensi­
tive NATO systems.
Sea
Despite Turkey’s notable year in terms of
aviation and land systems, 2013 saw a topsy­
turvy year for the country’s flagship naval
project: the Milli Gemi (National Ship, or
MILGEM) corvette programme. With two
vessels already delivered, Turkey selected
RMK Marine to construct six follow-on ves­
sels. However, this decision was cancelled in
August, with errors in procurement proce­
dures cited as the reason. A new procurement
strategy for the vessels was unveiled at the
end of September.
Although Russia’s air and land modernisa­
tion may be on a strong footing, one element
that continues to prove problematic is the
country’s naval modernisation, with 2013
offering some sharp examples of this trend.
In January the Russian Navy commis­
sioned Yuri Dolgoruky, the first Borey-class
(Project 955) nuclear-powered ballistic
missile submarine (SSBN). However, a re-
emergence of problems with the Bulava (SS-
NX-30) submarine-launched ballistic missile
(SLBM) - including a failed test launch in
September - has thrown a spanner into
the works for the acceptance of the second
and third boats in the class, planned for the
end of 2013. The latest indications from
the Russian MoD are that it has identified
and corrected issues found with a batch of
Bulava missiles and that acceptance of the
Borey class can now continue.
ANNUAL DEFENCE REPORT 2013 «
Meanwhile, Russia’s first Yasen-class
(Project 885M) nuclear-powered attack
submarine (SSN) was scheduled to enter
service at the end of 2013, although it had
been rumoured to be suffering technical
issues and had not entered service as JDW
went to press. Consequently, maintaining
Russia’s existing submarines has taken on
additional importance, and the decision
was made to modernise the Russian Navy’s
two Sierra I-class SSNs in March. Work on
existing boats is not without its problems,
however; Tomsk, anAntyey-class (‘Oscar
II’) (Project 949A) nuclear-powered guided
missile submarine (SSGN), was damaged by
a fire in September while in refit, following
a similar incident in December 2011. Ele­
ments of Russia’s surface fleet modernisa­
tion also continue to struggle, with the first
Admiral Gorshkov-class frigate only making
the machinery trials stage three years after
its launch and seven years after being laid
down. Russia did, however, begin work on
the fourth Admiral Gorshkov-class frigate
in November and launched its first new Yuri
Ivanov (Project 18280)-class intelligence
ship in September. Construction of the
second began in November.
Meanwhile, the Admiral Grigorovich-class
frigates appear to be running to schedule,
with a fifth vessel having its keel laid in
November, although none have entered ser­
vice yet. Russia also announced in June that
it would modernise the Kirov-class (Project
1144) nuclear-powered missile cruiser Admi­
ral Nakhimov, thus bringing two of
the class into operational service.
The country’s two French-built
Mistral-class vessels also
appear to be on schedule,
with the first vessel, Vladi­
vostok being floated out
by DCNS in October.
Russia’s plans for the
second and third
vessels in this class remain obscure.
May saw Norway complete its Skjold-class
fast patrol boat programme, with the rede­
livery of KNM Skjold: the prototype vessel
for the six-strong class. The country was,
however, forced into denying local media
reports in September that its Fridtjof Nansen-
class frigates were being cannibalised, stating
they were being operated as planned and in
accordance with common policy among many
navies worldwide.
The UK Royal Navy’s (RN’s) Daring-class
Type 45 destroyer programme was completed
in 2013, with fifth-of-class HMS Defender
commissioned in March and the final vessel,
HMS Duncan, commissioned in September.
Elsewhere, the UK’s Queen Elizabeth-class
aircraft carrier programme also made good
progress, with completion of the first vessel’s
hull on 10 November, while the RN’s second
Astute-class SSN entered service in March.
The milestones made by these programmes
in 2013 was offset by the bitter pill of the
announcement in November that BAE Sys­
tems was to close its shipyard in Portsmouth
to concentrate its surface vessel activities on
the Clyde, in Scotland.
October saw an about-turn in the Nether­
lands, with the country deciding to reverse a
plan to sell off its yet-to-be completed Karel
Doorman-class Joint Logistics Support Ship
(JSS), that was announced in September. The
country now plans to man the ship with a
skeleton crew and offset its running costs by
‘hiring’ it out for NATO or EU missions.
The Polish Navy finally saw the conclusion
of the ongoing saga of its Project 621 Gawron
II (Meko A 100)-class multipurpose corvette
programme. Although any follow-on hulls
remain cancelled, in September the Polish
MND signed a contract to complete the first-
of-class vessel, in build since 2001, with a
reduced armament as a patrol vessel. At the
same time Poland announced a contract for
the completion of design work for the Polish
Navy’s planned three Kormoran II (Project
258)-class mine destroyers. In July the Polish
Navy marked the formal receipt of its first
coastal defence missile battalion armed with
the Kongsberg Naval Strike Missile (NSM),
while in November it was announced that
one of the Polish Navy’s Oliver Hazard Perry-
class frigates would be overhauled to remain
in service until 2015. ■
The UK Royal Navy completed its Type 45
destroyer programme in 2013. crown copyright: 1513506
11 nor'omhor Onn lano’c tlofonro \A/ooklv/ I OR
» ANNUAL DEFENCE REPORT 2013
Maritime territorial spats, Indian procurement hits and misses, uncertainty in Afghanistan, arms
build- ups in Southeast Asia, and the continuing rise of China: regional trends stayed the same in
2013 even as the situation on the ground changed
he Asia-Pacific region’s status as the
T world’s most populous and dynamic
economic zone is tempered by the
fact that it is riven with unresolved territorial
disputes. These - as well as continued concerns
over China’s military development - are driv­
ing defence spending across the region. This
has been characterised by some as an arms race,
although it may be better viewed as a region-
wide materiel upgrade propelled by resource
competition, rising government revenues, and
declining markets elsewhere in the world.
Expect more of the same in 2014. It is
unclear whether any of the governments with
interests in the region have answers to the
big strategic questions: China’s rise, Afghani­
stan’s future, North Korea’s nuclear weapon
programme, and myriad territorial disputes.
However, one important change to look for is
the US role in the region. With its involvement
in the Middle East and Afghanistan apparently
winding down, the Obama Administration
could decide to focus more effort on its much-
touted As-Pac rebalance in the next year.
Southwest Asia
The year in Afghanistan was dominated by
the steady withdrawal of International Secu­
rity Assistance Force (ISAF) troops alongside
concerns whether the government institu­
tions and political and security infrastruc­
ture, established under international supervi­
sion since 2001, will survive presidential
elections next April and the end of ISAF
combat operations in December 2014.
The number of US forces in Afghanistan,
which peaked at about 100,000 in June 2011
at the height of the 'surge', is scheduled to fall
to 34,000 by February 2014. The remaining
900 German troops providing security in
Kunduz had withdrawn by the end of October
2013, while Danish troops ended their com­
bat mission in Helmand province in July. In
the place of international troops, local forces
have taken on security responsibility for the
whole country: a process that was completed
in June with the fifth and final transition
from ISAF to local command.
This transition has been characterised by
a 'tough love' approach, under which ISAF
has been declining requests for support in an
attempt to force the Afghan National Security
Forces (ANSF) to stand on their own feet.
ISAF Commander General Joseph Dunford
said in June that his forces were providing
tactical support for ANSF operations only as
a last resort - a key change in how interna­
tional troops have supported local troops
Asia Pacific
since the transition timetable was announced
at the 2010 NATO summit in Lisbon.
The challenges facing the ANSF were
illustrated by a growing number of civilian
casulties due to Taliban improvised explosive
device (IED) attacks in 2013 - up 41% on
2012 according to UN figures released in
June - and crossfire during firelights between
the insurgents and government forces.
Local forces also suffered major increases in
casualties, with the UN Secretary General
noting in a September 2013 report that more
than 3,500 Afghan military personnel were
reportedly wounded or killed in action during
the second quarter of 2013, while the Afghan
Ministry of the Interior reported that 299
Afghan National Police (ANP) personnel were
killed between mid-May and mid-June: a 22%
increase over the same period in 2012.
The Taliban's 'counter-counter insurgency'
tactics - and the massive increase in ANSF
casualties - undermined ISAF’s key policy
objective: to see the ANSF establish a security
cordon inside which government institutions
could operate. For his part President Hamid
Asia Pacific
Karzai continued to challenge US plans for the
post-2014 security in the country: a move that
unsurprisingly frustrated Washington but per­
haps underscored the complexity of the situ­
ation facing the Afghan government. Karzai's
irritation at unilateral US moves to hold peace
talks with the Taliban in Qatar hampered US
hopes for a status of forces agreement and
raised fears that the US forces may see a repeat
of their unplanned withdrawal from Iraq.
Meanwhile, the reconstruction programme
under way in Afghanistan was again dogged
by accusations of waste, mismanagement,
fraud and corruption. The US Special Inspec­
tor General for Afghanistan Reconstruction
(SIGAR) reported in October that “Afghani­
stan’s endemic corruption constitutes one of
the most serious obstacles to the effective and
efficient use of US reconstruction dollars. As
the United States provides more of its develop­
ment assistance on-budget - directly to the
Afghan government, rather than through US-
managed contracts - theft and fraud will pose
an even greater risk to US taxpayer dollars.”
Operationally a SIGAR audit found the
Afghan National Army (ANA) had failed to
consistently use or update its inventory to
track spare parts - leading to capability gaps
and waste - while it also pointedly complained
to US Secretary of Defense Chuck Hagel that
the US Army had declined to bar from contract
awards "43 companies with ties to the Taliban,
Al-Qaeda, or the Haqqani Network".
In Pakistan there were glimmers of hope
when Prime Minister Nawaz Sharif, who was
returned to power in May for the first time
since being deposed in a 1999 coup, promised
negotiations with the Pakistani Taliban and
an end to US unmanned aerial vehicle (UAV)
attacks on suspected Islamist sites near the
country's border with Afghanistan.
However, Sharif's inability - or unwilling­
ness - to secure the latter meant the former
was also scuppered, along with any chances
for a peace deal that could lift Pakistan out
of a destructive cycle of terrorism that has
paralysed the country.
The continuing economic crisis meant mili­
tary procurement was lower on Sharif's list of
priorities, although the federal defence bud­
get did increase by 10% to PKR6 2 5.3 billion
(USD6.7 billion): the equivalent to 2.71% of
GDP. The increase was lower than the 16.6%
average annual rises that have occurred since
2008 and continued a trend of declining
increases over the past five years.
ihs.com/Janes
ANNUAL DEFENCE REPORT 2013 «
Despite this fiscal environment, officials
continued to hold out hope for a deal with
China on submarines, following on from the
successful completion of the Sword-class
frigate programme and ongoing co-produc-
tion of the FC-l/JF-17 Thunder multirole
combat aircraft.
In September Pakistani officials made
more overtures to Beijing to increase defence
industrial ties, while Islamabad also looked to
South Korea and Turkey as possible part­
ners in defence joint ventures. In February
Turkish technology and systems engineering
house STM signed a contract with Pakistan's
Ministry of Defence Production to provide
technical and material support for the con­
struction of a new double-hull fleet tanker
for the Pakistan Navy.
South Asia
India was a case of the same old same old
in 2013: some real progress towards armed
forces modernisation undermined by corrup­
tion allegations, bureaucratic foot dragging,
and good old-fashioned incompetence.
There were qualified successes across all
three services. In terms of new platforms
entering service, the navy had perhaps the
best year, the highlight being the commis­
sioning in mid-November of INS Vikrama-
ditya, its refurbished former Soviet Navy
aircraft carrier. A MiG-29 squadron was
established earlier in the year that will supply
the ship's air arm.
India also launched the hull of Vikrant, the
navy's indigenous aircraft carrier, in August.
In June it commissioned INS Trikand, the last
of six Russian-built Project 135.6 Talwar-
class (Krivak III) guided missile frigates, and
received the first three of eight Boeing P-8I
Neptune multimission maritime patrol aircraft.
The navy also made progress in commis­
sioning smaller vessels, which play a vital role
in the littoral patrol missions that became
a priority after the 2008 Mumbai terrorist
attack. Early in 2013 it received Vaibhav, the
last of three Vishwast-class offshore patrol
vessels, and two 50 m inshore patrol vessels:
Rajdoot from Garden Reach Shipbuilders and
Engineers' Rajabagan Yard and Rani Avan-
tibai from Hindustan Shipyard Ltd. These
deliveries followed those in mid-March, by
Sri Lankan boat builder Solas Marine Lanka,
of the first four of 80 composite-hulled fast
interception craft (FIC).
There were also signs of movement in the
test programme for a submarine-launched
version of the BrahMos supersonic cruise
missile, while in August the navy activated
the reactor aboard ballistic missile submarine
(SSBN) INS Arihant: derived from the Soviet
’Charlie I'-class design that was built in India
with Russian assistance. Once in service,
Arihant will constitute the nucleus of India's
retaliatory nuclear deterrent.
However, there were inevitable problems
in India, not least an explosion that killed
18 submariners aboard INS Sindhurakshah
a Type 877EKM variant of the ‘Kilo’ class.
Meanwhile, three Kolkata-class (Project 15A)
destroyers continue to sit idle at Mazagon
Docks in Mumbai due to system integration
issues. It is also notable that many of 2013's
'successes' were programmes that should
have been completed years ago.
The Indian Air Force (IAF) had an equally
mixed 2013, with a number of important
deliveries offset by major programme delays.
Of 10 Boeing C-17 Globemaster III stra­
tegic airlifters on order, 4 were inducted in
2013 and there are plans to order a further 6
by 2022. The IAF also plans to buy six more
Lockheed Martin C-l 30-30J tactical trans­
port aircraft, which will be operated from
Forward Base Support Unit (FBSU) Panagarh
in the east.
In August a C-130J-30 landed at the 5,065
m high Daulat Beg Oldi (DBO) advanced
landing ground (ALG), which is located in the
Ladakh region about 7 km from the line of
actual control (LoAC): India's disputed border
with China.
In the past the Indian armed forces have
used mule trains, helicopters, and airdrops
to resupply troops along the LoAC. "The IAF
will now be in a better position to meet the
requirements of our land forces, which are
heavily dependent on the air bridge for sus­
tenance in these high and inhospitable areas
[along the LoAC]," the air force said.
The six additional C-l 30s will be deployed
in the island territories of Andaman and
Nicobar off India's east coast and along the
LoAC in support of the Indian Army's new
mountain strike corps.
To realise this, the IAF is spending
INR21.73 billion to upgrade the Nyoma air-
base (altitude 4,053 m) in Ladakh, which was
reactivated in September 2009 after being
disused for 45 years. The IAF is also spending
INR7.2 billion to upgrade the Kargil airstrip
in northern Kashmir and seven advanced
11 December 2013 Jane's Defence Weekly I 27
 » ANNUAL DEFENCE REPORT 2013
Indian Navy: 1525708
landing grounds in the Himalayas.
India also released a request for proposals
(RfP) for medium transports to replace its
ageing Avro 748M light transports and in early
January downselected the Airbus Military
A3 30 Multirole Tanker Transport (MRTT) air­
craft to fulfil its aerial refuelling requirement.
The A3 3 Os will refuel a combat aircraft
fleet that continues to be dominated by
Russian platforms: a state of affairs that was
confirmed by a follow-on sale of 42 Sukhoi
Su-30MKIs to India in late December 2012
that will take the total number of‘Flankers'
in IAF service to about 270.
The enlarged Su-30 fleet will be a vital
frontline presence for the IAF as delays to
contract negotiations for 126 Dassault Rafales
have jeopardised any plans to sign a deal before
the 2014 general election. The IAF is also
bracing itself for delays to other incoming plat­
forms: the Fighter Generation Fighter Aircraft
(FGFA), which is based on the Sukhoi T-50
PAK-FA prototype; and the HAL Tejas light
combat aircraft, which continues to face major
delays despite a December 2013 deadline for
initial operational clearance (IOC) imposed by
Defence Minister A K Antony.
Rotary-wing developments were another
area in which the Indian Ministry of Defence
(MoD) grasped defeat from the jaws of vic­
tory in 2013. Alongside the Su-30 follow-on
contract, India signed up for 59 more Mil
Mi-17V-5s utility helicopters to supplement
80 similar platforms acquired in December
2008, while negotiations for Boeing CH-47F
28 | Jane's Defence Weekly 11 December 2013
Chinook heavylift helicopters and AH-64E
Apache attack helicopters were ongoing.
HAL scored a minor triumph in February
with the acceptance into service of the Rudra:
a weaponised version of the Dhruv advanced
light helicopter. The Rudra is the test-bed
for HAL's long-delayed 5.8-ton light combat
helicopter (LCH), which made its maiden test
flight in March 2010. Officials told IHS Jane's
at Aero India 2013 that the third LCH proto­
type, fitted with a weapon suite similar to that
of the Rudra, would complete developmental
trials by late 2013 and secure its IOC in 2015.
However, for all the capability enhance­
ments, there were inevitable procurement
delays and snarl-ups. The most potentially
damaging was the MoD's efforts to cancel
a deal to buy 12 AgustaWestland AW 101
helicopters for the IAF’s VIP squadron over cor­
ruption allegations. Although the AW 101 s in
question fulfilled a niche capability, the move
to cancel could lead to the banning of Agus­
taWestland from other contests in India and is
a stark reminder to the global defence industry
of the risks of doing business in South Asia.
A manufacturer that needs no reminder
of this is BAE Systems, which announced
in October the suspension of production at
the M777 howitzer line in Barrow, northern
England, after the Indian MoD again delayed
signing off on plans to buy 145 of the towed
155 mm/39-calibre lightweight guns.
BAE sources in New Delhi said the com­
pany had spent more than USD 50 million
to keep the M777 production line in the
Asia Pacific
United Kingdom open in anticipation of an
Indian Army contract through the US Foreign
Military Sales (FMS) route. BAE extended its
M777 commercial bid for the Indian contract
five times during the past three years, but the
price is now expected to jump substantially
due to the Indian MoD's intransigence.
The M777 delay was symptomatic of
procurement failures across the Indian Army,
which in June outlined a wish list of over
700 items - worth an estimated INR2 trillion
(USD36 billion) - that it hopes to acquire
during the government's 12th Five-Year Plan
(2012-2017). The list included howitzers;
main battle tanks and light tanks; infantry
combat vehicles; trucks; and light, attack and
heavylift helicopters. Other materiel listed
included missiles, assault rifles, carbines,
body armour and helmets.
The chances of these 700 items being
acquired seems slim, as over the past five
years nearly half the army's RfPs for equip­
ment have been recalled or terminated for
being "impracticable and un-implementable",
an official acknowledged in mid-2013.
In the interim, the army is following the
tried and tested route of follow-on orders of
Russian equipment: in September the MoD
approved a contract for an additional 235
licence-built T-90S MBTs.
India's border disputes with Pakistan and
China both flared up in 2013, with a number
of cross-border firings in Kashmir between
Pakistani and Indian troops and an apparent
infiltration of Indian territory by Chinese
People’s Liberation Army (PLA) troops in
April. Beijing and New Delhi sought to create
a structure to deal with such incidents when
they signed a Defence Border Co-operation
Agreement (BDCA) in October reaffirming
that "neither side will use force or threaten
to use force or seek unilateral superiority to
alter the LoAC's status". Prime Minister Man-
mohan Singh said the "strategic benchmark"
between India and China was to maintain
peace along their border and work towards
negotiating a "fair, reasonable and acceptable
settlement" of their frontier.
Bangladesh had a quiet 2013 in terms of
procurement. In January it was announced
that Bangladesh had secured a USD 1 bil­
lion loan from Russia to procure a range of
materiel, although the items to be procured
were not specified. Russian media suggested
armoured vehicles, infantry weapons, air-
defence systems, and additional Mil Mi-17
helicopters would be included in the package.
Given Dhaka's sensitivity to potential
ihs.com/janes
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» ANNUAL DEFENCE REPORT 2013
energy deposits in the Bay of Bengal and
exclusive economic zone (EEZ) protection,
it is unsurprising that the navy saw the lion's
share of procurement. In January a senior
military official told reporters Bangladesh
was in negotiations to buy submarines from
China. Options are believed to include Type
035 Ming-class orType 039G Song-class
boats. The acquisition target date set by the
navy, but apparently not yet approved by
parliament, is 2019.
In May the US Coast Guard (USCG) hot-
transferred high-endurance cutter Jarvis
(WHEC 725) to the Bangladesh Navy (BN).
Renamed BNS Somudro Joy, it is the navy's
largest vessel and gives Bangladesh another
helicopter-capable ship with high endur­
ance for persistent patrolling of its EEZ and
maritime zones.
Northeast Asia
Changes of leadership in China, Japan and
South Korea in 2013 have had a major effect
on the strategic outlook for Northeast Asia.
However, underlying defence trends have not
changed significantly in the past 12 months.
The key threat to the status quo remains
North Korea, which followed up Decem­
ber 2012's successful launch of an Unha-3
space launch vehicle with a nuclear test - its
third - in February 2013. The following two
months saw a major escalation in tensions
around the peninsula that were not helped
by the US' decision to deploy Northrop
Grumman B-2 Spirit stealth bombers on a
long-range bombing drill.
The cycle of tensions eventually ran its
course, although North Korea appears to be
Japan Maritime Self-Defense Force and US Navy landing craft air cushion simulate a beach-front
assault on Red Beach at Camp Pendleton during the ‘Dawn Blitz 2013’ amphibious exercise in June.
30 i Jane's Defence Weekly 11 December 2013
intent on resuming nuclear material produc­
tion and enrichment at its Yongbyon complex.
Given the international community’s lack of
any enthusiasm for negotiations with Kim
Jong-un, it is likely that the outcome of the
ongoing nuclear talks with Iran may prove
more significant than any initiatives in Asia in
2014, given that if a deal is possible with Teh­
ran, then the same may be true for Pyongyang.
On the conventional weapon front, the
most notable incident involving North Korea
was the interception in the Panama Canal of
one of its cargo ships with 25 ISO containers
of Soviet-era Cuban materiel hidden under
200,000 sacks of sugar. The equipment,
which included two MiG-21 fighters, 15
MiG-21 engines, S-75 air-defence systems,
missiles, and command-and-control vehicles,
seemed to confirm previous reports that
North Korea is struggling to keep its MiG-21
fleet in the air. The Korean People's Navy may
be having similar issues with its surface fleet
following rare admissions of accidents - and
sailors’ deaths - late in the year.
China, under the new leadership of Xi Jin-
ping, came out hard against the North Korean
nuclear test as it continued to deal with the
consequences of the US rebalance to the
Pacific and increasing regional disquiet over its
growing military clout and territorial claims.
The PLA Navy's modernisation programme
maintained a high tempo. Rumours of a new
‘Type 081’ landing helicopter dock swirled
but are yet to be substantiated by satellite
imagery or spotter-sourced photography,
although an intriguing block that appeared
in a dry dock at Shanghai's Changxing Island
shipyard in January could be evidence of the
Asia Pacific
PLAN'S first amphibious flat-top.
Alternatively, the block could be part
of China's first indigenous aircraft carrier,
although the smart money suggests that
any carrier developments will take place at
Dalian, where Liaoning - the Kuznetsov-class
carrier that entered PLAN service in 2012 -
was rebuilt.
China also had an eventful year in the air.
Although there were no fifth-generation pro­
totypes to unveil in 2013, perhaps of greater
significance to Beijing's strategic plans was
the first flight of the XAC Y-20 heavylift
transport aircraft on 26 January. If it enters
production, the Y-20 will fill a massive gap
in China's strategic airlift capability and help
to bring it up to parity with neighbours and
competitors such as Australia, India, and the
United States.
The abundance of UAV programmes under
way in China and the continued lack of trans­
parency about programmes of record meant
it was impossible to create a comprehensive
picture of developments in this field. Indeed,
the IHS Jane’s report on the 15th Beijing
Aviation Expo held on 25-28 September
concluded that "the Chinese unmanned aerial
vehicle [UAV] market is massively frag­
mented, with various bodies competing for
the same government contracts or segments
of the export market".
However, a number of intriguing contend­
ers did break cover in 2013. One was the Cai
Hong 4 (CH-4 or Rainbow 4): a medium-
altitude long-endurance (MALE) unmanned
combat air vehicle (UCAV) developed by the
China Academy of Aerospace Aerodynam­
ics (CAAA). Technical staff claimed it had
ihs.com/janes
Asia Pacific
a payload roughly twice that of the rival Yi
Long (Wing Loong or Pterodactyl) UCAV
produced by the Aviation Industry Corpora­
tion of China (AVIC).
Other UAVs to make appearances in Chi­
nese web forums included a new 'box-wing'
UAV that is much smaller than the only other
known Chinese box-wing UAV, the turbofan-
powered Guizhou-Chengdu Soar Dragon, and
a stealthy X-47B lookalike called Li Jian, or
‘Sharp Sword’.
It is not possible to confirm whether any
of these UAVs are programmes of record.
However, one programme that appears to
have official funding is a MALE UAV called
the BUAA BZK-005, which was photographed
by a Japan Air Self-Defense Force (JASDF)
aircraft heading towards Okinawa in early
September. About 170 km short of the
Miyako strait, it performed a short circular
patrol before turning back towards China.
That UAV patrol coincided with the one-year
anniversary of Japan's part-nationalisation of
the Senkaku/Diaoyutai islands, the dispute
over which has contributed to possibly the
worst period of Sino-Japanese relations since
diplomatic ties were established in the 1970s.
In a worrying escalation of the situation in
the East China Sea, China announced in late
November a unilateral Air Identification Zone
(ADIZ) that overlaid parts of Japan's ADIZ.
The risk of Japanese F-15s coming up against
Chinese J-11 Bs just got a lot greater.
Japan is unlikely to back down under
the stewardship of Shinzo Abe, who was
re-elected in December 2012 for his second
stint as Japanese prime minister following
a disastrous cameo in 2006-7. One of Abe’s
first foreign policy moves was to announce
his hopes for a “democratic security dia­
mond” aligning Japan with like-minded
countries such as Australia and India against
Chinese aggression.
This has seen Tokyo look to 'normalise'
its defence and foreign policies and to make
the international case for a reinterpreta­
tion of its Constitution to allow collective
self-defence - basically the right to come to
an ally's aid. Meanwhile, Abe has focused on
building better relations with Association of
South East Asian Nations (ASEAN) countries
suspicious of Chinese behaviour, such as the
Philippines and Vietnam.
Abe also proposed the first increase in
the defence budget in 11 years (a 3% rise);
oversaw the launch of the first 22DDH
helicopter carrier, JS Izumo; and established
a nascent amphibious task force that may be
ihs.com/janes
ANNUAL DEFENCE REPORT 2013 «
The first six Boeing AH-64E Apache attack helicopters were unloaded
and assembled at Kaohsiung Port, southern Taiwan, on 4 November.
the vanguard for a Japanese marine corps. In
response to the perceived threat to Japan's
southwestern islands, the JASDF also moved
more Boeing-Mitsubishi F-l 5J/DJ Eagle
strike aircraft and Northrop Grumman E-2
Hawkeye advanced early warning and control
aircraft to Okinawa Prefecture.
The Japan Maritime Self-Defense Force's
patrol capabilities also received a boost with
the arrival of the first Kawasaki P-1 maritime
patrol aircraft, which is destined to replace
the Lockheed-Kawasaki P-3C Orion.
Citing the "increasingly severe security
situation around Japan", Abe also wrote a bill
to create a National Security Council and is
formulating Japan's first ever national security
strategy, which seeks to co-ordinate foreign
and strategic policy across government depart­
ments. Given Tokyo's well-known proclivities
for bureaucratic factionalism, the strategy's
success is doubtful. One clear objective,
however, according to Japanese officials, is to
use overseas development aid more "strategi­
cally"- and that means helping countries that
can help Japan in its dealings with China.
One country that should have better rela­
tions with Japan is South Korea, which would
almost certainly rely on Japanese assistance -
and acquiescence - in the event of a war with
North Korea. However, just as China and
Japan seem incapable of getting on, so new
President Park Geun-hye has articulated deep
South Korean suspicions of renewed Japanese
'militarism' and Abe's previous statements on
Japan's culpability in relation to the Second
World War and 1910-45 occupation of the
Korean Peninsula.
History is a very real player in current bilat­
Republic of China Army: 116882
eral relations, something that has so far been
an irritation rather than a game-changer in the
strategic make-up of Northeast Asia. Regime
change or further nuclear developments in
North Korea may challenge this assessment.
For its part, South Korea under its new
president is exploring a 'trustpolitik' policy
with North Korea, whereby it supports confi­
dence-building measures such as the reopen­
ing of the joint Kaesong industrial complex,
but reserves the right to strike back quickly at
any perceived 'provocations' by Pyongyang.
In terms of defence industry, South Korea
saw a quiet year compared to the successes of
2012, but continued to establish itself as an
emerging force in the global defence market.
IHS Jane's analysis has seen it move from 26th
to 11th in the list of top defence exporting
nations, helped by major sales to Indonesia,
the Philippines and India.
Seoul was also at the heart of the Asia-
Pacific region's biggest defence procurement
story: the FX-III saga. Boeing was left at the
altar after Seoul rejected its F-15 Silent Eagle
concept at the last minute, apparently in
preference for the Lockheed Martin F-35
Lightning II Joint Strike Fighter and its in-built
sensors and superior stealth characteristics.
However, Boeing did secure a contract to
provide AH-64E Apache attack helicopters to
Taiwan, the first export examples of which
made their public debut when they arrived on
the island in November.
Other than the Apache arrival there was
little to report from Taiwan in 2013. In
November the Republic of China Navy (RoCN)
confirmed that it will begin deploying the
indigenous Tien Chien II (Sky Sword 2)
11 December 2013 Jane's Defence Weekly j 31
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Asia Pacific
surface-to-air missile on its fleet of six Lafay­
ette-class (Kangting-class) frigates in 2017.
The RoCN is also scheduled to receive a new
fast combat supply ship in 2014 after CSBC
Corporation launched Pan Shi on 5 November.
Southeast Asia
The Spratly islands and the associated territo­
rial disagreements again made headlines in
2013, although there were none of the land
grabs seen in 2012.
Nonetheless, the shadow of China's expan­
sive territorial claims loomed large as ASEAN
members built up their maritime surveillance
capabilities. A number of nations signed con­
tracts for better coastal radar systems, while
Malaysia made perhaps the greatest invest­
ment when it announced the establishment
of a new naval command at Bintulu. The new
base will be about 80 km from James Shoal:
a submerged bank that is China's southern­
most claim in the South China Sea and was
visited by a four-ship PLAN flotilla in March.
The base will also help Malaysia deal with any
further events in Sabah, where the Malaysian
armed forces spent much of the year dealing
with Sulu separatists.
Vietnam, which has first-hand experi­
ence of Chinese assertiveness in the South
China Sea, received the first of six ‘Kilo’-class
submarines from Russia and in August signed
up for the first two of four Damen Schelde
SIGMA 9814-class corvettes. Vietnam
also announced the purchase of 12 more
Su-30MK2 aircraft, which will be delivered
between 2014 and 2015.
Indonesia finally received its first consign­
ment of ex-German heavy armour and also
signed up for eight Boeing AH-64E Apaches
from the United States. The first two KAI
T-50 Golden Eagle aircraft - known locally
as the T-50i - arrived at Iswahjudi Airbase
in East Java in September, with 14 more
expected before the end of 2013. However,
concerns in South Korea at the potential
financial risks of the KFX fighter programme
meant its Indonesian counterpart - the IFX -
was left waiting for Seoul to commit ahead of
a June 2014 deadline.
The Armed Forces of the Philippines'
(AFP's) plans for major procurements -
including their own version of the T-50 - are
likely to be undermined by the effects of
Typhoon Haiyan. It is ironic that the typhoon
illustrated the necessity of the AFP moderni­
sation that is now likely to be derailed, but
is set to be a recurring motif until Manila
invests in the tactical lift, sealift, and human­
ihs.com/janes
ANNUAL DEFENCE REPORT 2013 «
itarian assistance and disaster response tools
the AFP needs.
Meanwhile, the Singaporean armed
forces continued to maintain their edge as
the region's most capable fighting force.
There were no announced deliveries of new
materiel in 2013, but in September Defence
Minister Ng Eng Hen revealed plans to
upgrade the Republic of Singapore Air Force's
Lockheed Martin F-16C/D fleet, while earlier
in the year a senior US Air Force official stated
that Singapore was looking seriously at the
short take-off/vertical landing (STOVL) ver­
sion of the Lockheed Martin F-35.
In January ST Engineering announced it
had secured a contract to design and build
eight 80 m, 1,200-tonne patrol vessels for
the Republic of Singapore Navy as replace­
ments for the existing Fearless class. Delivery
of the first of class is planned for 2016 and all
eight vessels are to be operational by 2020.
Australia
Fourteen years of high-tempo operational
deployments by the Australian Defence Force
(ADF) ended in December with the conclu­
sion of its combat role in Afghanistan in the
wake of earlier operations in East Timor, Iraq,
and the Solomon Islands.
More than 1,000 troops were withdrawn
from their base at Tarin Kowt in Uruzgan
province during the year, leaving about 400
army personnel in logistics and advisory roles
until the end of 2 014 when the ISAF mission
ends. Forty Australians were killed and 261
wounded during the 12-year deployment.
In May the then government announced it
- _____________
—■
Indonesia received the first of 103 modernised Leopard 2A4 MBTs in October.
would acquire 12 EA-18G Growler electronic
attack aircraft at a cost of AUD1.5 billion
(USD 1.6 billion) rather than convert to
the Growler configuration 12 of the Royal
Australian Air Force’s 24 in-service F/A-18F
Super Hornet strike fighters. All 12 Growlers
will have been delivered by 2017.
The Liberal-National Party coalition gov­
ernment elected in September promised an
increase in defence spending from 1.5 9% of
GDP to 2% over the next decade.
The coalition also lost no time in initiating
Operation ‘Sovereign Borders’: its conten­
tious military-led border protection policy
that includes turning back asylum-seeker ves­
sels to Indonesia when it is safe to do so.
Final decisions on the acquisition of new
submarines, F-35s and high-altitude, long-
endurance UAVs for maritime surveillance are
expected by early 2015 in tandem with a new
Defence White Paper.
An international Fleet Review in Septem­
ber, marking the centenary of the first entry to
Sydney harbour of the Royal Australian Navy’s
(RAN’s) fleet, drew ships from 20 navies.
Meanwhile, construction proceeded on
schedule on the RAN’s two 27,800-tonne
Canberra-class landing helicopter docks, the
first of which will be delivered in early 2014
and the second in 2015.
Amphibious training received a boost in
the biennial Australian-US ‘Talisman Sabre’
exercise in northern Queensland, while
work continued under Plan Beersheba on the
reshaping of the army’s regular brigades to
generate three ‘alike’ multirole manoeuvre
formations. ■
Rhemmcta'i Defence: 1525704
11 December 2013 Jane’s Defence Weekly | 33
» ANNUAL DEFENCE REPORT 2013 The Middle East and Africa
The Middle East and Africa
Wars, coups, military intervention and terrorism made 2013 another eventful year for the Middle East and
Africa. It was also a year that saw diplomacy triumph - at least for the time being - over military options, as
Syria committed itself to disposing of its chemical weapons and Iran agreed to freeze its nuclear programme
he situation in the Middle East looked
T increasingly grim in 2013. As Iran and
its Lebanese ally, Hizbullah, contin­
ued to prop up President Bashar al-Assad in
Syria the region’s Sunni-Shia power struggle
became even more pronounced, while various
Gulf states fuelled the insurgency and foreign
jihadists poured into the country.
It was also a year that saw two potentially
historic agreements to neutralise Syria’s
chemical weapons and Iran’s ability to pro­
duce nuclear weapons. Yet US efforts to find
a peaceful resolution to the Iranian stand-off,
its reluctance to facilitate Assad’s demise,
and its attempts to encourage Egypt back to
democracy after a military coup provoked a
backlash from some of its regional allies.
Proxy war
The scale of foreign involvement in the
Syrian war became apparent in April, when
Hizbullah fighters were credited with taking
a lead role in storming the insurgent-held
town of Al-Qusayr near the Lebanese border.
The following month, French Foreign Min­
ister Laurent Fabius said an estimated 3,000
to 4,000 Hizbullah fighters were operating
in Syria. “When you have fighters who are
heavily armed and who are ready to die, it
makes a huge difference,” he told France’s
National Assembly. In September insurgents
released captured video footage showing
Iranian military advisors taking command of
pro-government forces.
At the same time Assad’s claims that his
forces are fighting foreign terrorists have
been given credence by the arrival of large
numbers of militant Sunni Islamists from
other countries, most of whom appear to be
joining the Al-Qaeda-affiliated Islamic State
of Iraq and the Levant (ISIL).
Some of the blame for the emergence of
the radical Islamists has been directed at
Turkey’s National Intelligence Organisation
(Milli Istihbarat Te§kilati - MIT) for failing to
control the insurgent supply lines running
into northern Syria. In October US officials
briefed The Wall Street Journal that “Turkey
was letting arms and fighters flow into Syria
indiscriminately and sometimes to the wrong
rebels, including anti-Western jihadists”.
US-led attempts to forge the moderate
insurgents into a more unified force were also
undermined by the Arab Gulf states’ ten­
dency to supply weapons directly to favoured
groups rather than via the Syrian opposition’s
Supreme Military Council (SMC). By logging
the weapons seen in insurgent videos, IHS
Jane’s was able to identify clear trends show­
ing that moderate Islamist groups aligned
with the SMC were almost the only users
of Chinese HJ-8 anti-tank guided weapons,
while Salafist groups not formally affiliated to
Al-Qaeda were mainly using Russian Konkurs
missiles. There were also signs that ISIL was
acquiring some of the weapons supplied by
foreign states, presumably by collaborating
and trading with other groups.
This growing domination of the insurgency
by Islamists of various shades has helped
cement Assad’s support base, especially among
the minority Alawi, Shia, and Christian com­
munities (the Kurds remain on the sidelines).
In turn, this has facilitated the raising of
pro-government militias called the National
Defence Forces (NDF), which have freed up
regular units for offensive operations.
Nevertheless, the regime still lacks the
manpower it needs to reassert its author­
ity, while the insurgency is too divided and
poorly equipped to defeat concentrations of
pro-government forces. At the time of writ­
ing, the repeatedly delayed peace talks were
scheduled to begin on 22 January, but with
Assad refusing to step down there is little
hope of a resolution.
Spreading insecurity
The Sunni militant focus on Syria did little to
reduce jihadist violence in other countries,
especially neighbouring Iraq, where the death
toll rose to a level not seen since 2008. In
the run-up to a visit to Washington in early
November, Prime Minister Nuri al-Maliki
called on the United States to supply the weap­
ons and platforms that Iraq’s security forces
“need to fight terrorism, including helicopters
and other military aircraft, so that we can
secure our borders and protect our people”.
This seemed a strange plea, given that Iraq
has no US helicopters on order (although it
Egypt’s military coup on 3 July was popular,
but led to a freeze in some US military
support, including a suspension in the
delivery of AH-64 Apaches.
The Middle East and Africa ANNUAL DEFENCE REPORT 2013 «
has requested Bell 412 search-and-rescue
aircraft) and has little hope of significantly
speeding the delivery of its F-16 multirole
strike aircraft. At the same time, many
observers believe that new weapons will
make little difference until Maliki abandons
the policies that have alienated Iraq’s Sunni
Arab minority.
Sunni jihadist attacks also increased in
Lebanon as tensions escalated between
Hizbullah and the Alawi community on one
side and the predominantly Sunni supporters
of the Syrian insurgency on the other. The
most notable incident was the 19 November
suicide bombing at the Iranian embassy. The
bombers were identified as followers of a
radical preacher, Sheikh Ahmed al-Assir, who
went underground in June after the Lebanese
Armed Forces (LAF) stormed his compound
in Sidon. The perception that the LAF is a
neutral force was undermined by the involve­
ment of Hizbullah fighters in the operation.
Nevertheless, the LAF has so far man­
aged to contain the outbreaks of communal
violence and its capabilities are being quietly
bolstered by UK, French, and US aid. This
understated support is exemplified by the US
donation of Cessna 208B Caravan aircraft
that have been fitted with advanced sur­
veillance payloads and the ability to launch
Hellfire air-to-surface missiles.
Yemen continues to suffer regular jihadist
violence, despite the military victory against
Al-Qaeda in the Arabian Peninsula’s (AQAP)
proto-Islamic state in 2012, while attacks on
security forces in the Sinai Peninsula esca­
lated notably in the wake of the 3 July coup in
Egypt. The severity of the situation was seen
in an army video that showed M60 tanks
firing into a village as AH-64 Apache attack
helicopters flew overhead.
Elsewhere in Egypt, the coup that ousted
the democratically elected Muslim Brother­
hood government proved popular, even with
many members of the pro-democracy move­
ment that deposed the autocratic former air
force commander Hosni Mubarak in 2011.
The coup highlighted inter-Sunni divisions:
Hamas, Turkey, and Qatar objected; while
Saudi Arabia and the United Arab Emirates
(UAE) began supplying billions of dollars to
Egypt’s new government. The situation also
put Washington in an awkward position
as US law says the government must stop
providing aid to states in the wake of coups.
This would ostensibly mean an end to the
ihs.com/janes
USD2.1 billion in Foreign Military Financing
that Egypt receives every year. Washington
adopted a pragmatic approach, freezing the
delivery of new F-16s, Apaches, and M1A1
MBT kits pending fresh elections while doing
nothing to jeopardise Egypt’s counterterror­
ist capabilities.
The situation is far more chaotic in
neighbouring Libya, demonstrating what can
happen when an authoritarian state collapses
in the face of a decentralised uprising. More
than two years after the fall of Muammar
Ghadaffi, the country is still controlled by a
myriad of local militias. Most of these groups
are ostensibly security forces whose salaries
are paid by the ineffectual central govern­
ment, but they prioritise their own interests
or those of associated tribes and frequently
clash with each other.
In one of the most extreme examples of
self-interest, militias closed the eastern oil
terminals that they are supposed to protect
in an apparent attempt to negotiate better
compensation. Government officials accused
them of being separatists who were attempt­
ing to sell the oil stored at the terminals and
in August tasked the navy with preventing
tankers from docking at the terminals.
Libya demonstrates what can happen
when an authoritarian state collapses
in the face of a decentralised uprising
The navy and air force are making progress
in repairing and servicing their old equip­
ment, but there are few signs that an effective
national army is emerging, despite announce­
ments that Italy, Turkey, the United Kingdom,
and the United States will train its personnel.
At the same time, the expected major
defence contracts remain on hold pending
the Libyan defence white paper that is being
drawn up with international assistance.
Intervention averted
Post-Ghaddafi Libya - as well as the attempts
to stabilise Iraq and Afghanistan - clearly
influenced Washington’s reluctance to
intervene in Syria, where ethno-sectarian
divisions and regional rivalries could result in
a failed state, massive weapon proliferation,
and a protracted conflict.
When chairman of the US Joint Chiefs of
Staff General Martin Dempsey outlined an
unappetising menu of options in a 19 July
letter to the US Senate Armed Services Com­
mittee, he warned that tipping the military
balance in favour of the insurgency could be
disastrous. “Should the regime’s institutions
collapse in the absence of a viable opposition,
we could inadvertently empower extremists
or unleash the very chemical weapons we
seek to control,” he said.
Nevertheless, it looked like the United
States would be forced to intervene in the
wake of an extensive sarin attack against vari­
ous Damascus suburbs on 21 August.
In his letter Gen Dempsey had already
stated that a small invasion would be needed
to forcibly dispose of Syria’s chemical weap­
ons: a reflection of the failure to develop air-
launched munitions capable of safely destroy­
ing toxic agents. “At a minimum, this option
would call for a no-fly zone as well as air and
missile strikes involving hundreds of aircraft,
ships, submarines, and other enablers. Thou­
sands of special operations forces and other
ground forces would be needed to assault and
secure critical sites,” he wrote.
Instead, the US military began drawing up
a plan for limited stand-off strikes that would
be so carefully calibrated that they would
punish the 21 August attack and deter Syria
from using chemical weapons again, but not
provoke retaliation such as ballistic missile
attacks on Israel or NATO bases.
The US Navy began to build up its presence
in the region as ships were kept on station
after their relief had arrived. The political
preparations proved more complicated, how­
ever. The UK government failed to obtain par­
liamentary approval for a military operation
against Syria and Obama struggled to secure
the congressional support he felt he needed.
Moscow came to the rescue by brokering
a deal that saw Damascus agree to dispose
of its chemical weapons by June 2014 under
the supervision of the Organisation for the
Prohibition of Chemical Weapons (OPCW).
In a possibly related development, Russian
President Vladimir Putin announced that
11 December 2013 Jane’s Defence Weekly | 35
» ANNUAL DEFENCE REPORT 2013 The Middle East and Africa
Russia would suspend the controversial deal
to supply S-300 air-defence systems to Syria.
The current plan is to centralise Syria’s
chemical munitions and precursors at a
coastal location before loading them on to the
specially equipped US Ready Reserve Force
cargo ship Cape Ray for destruction. There
are also concerns that the Syrian government
will try to retain some chemical weapons as
a deterrent or drag out the disarmament in
the belief that the international community
will not want it to collapse until the process is
completed. If this happens, the Pentagon may
have to dust off its strike plans in 2014.
The Iranian deal
There was also no Israeli military strike on
Iran in 2013, which had been identified by
outgoing Israeli defence minister Ehud Barak
as the year in which the Islamic Republic’s
nascent nuclear weapon capability would
have to be destroyed before it reached a ‘zone
of immunity’. Iranian officials have countered
by threatening to retaliate against both Israel
and US assets in the region, raising the pos­
sibility that a strike would provoke a major
conflict in the Gulf that would disrupt global
energy supplies.
The credibility of the Israeli threat con­
tinues to be debated. Many military analysts
believe the Israel Air Force (IAF) lacks the
aircraft and munitions to inflict a significant
setback on Iran’s nuclear programme. Israel
could nevertheless attack with the intention
of forcing the US to finish the job, although
Iran’s uranium enrichment programme following the 24 November deal
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36 | Jane’s Defence Weekly 11 December 2013
its leaders would presumably be extremely
reluctant to take such an extreme decision.
As it happened, Iran gave Israeli Prime
Minister Benjamin Netanyahu an excuse for
inaction by converting some of its highly
enriched uranium (HEU) into reactor fuel
before the stockpile reached Netanyahu’s ‘red
line’ of 250 kg.
A US decision to bolster the IAF’s ability
to carry out long-range strikes may have also
influenced Israeli calculations. Announced in
April, this package includes Lockheed Martin
KC-135 aerial refuelling tankers, Bell Boeing
V-22 Osprey tiltrotor transports, and anti­
radiation missiles.
The number of tankers and their delivery
dates have not been revealed, but US Secre­
tary of Defense Chuck Hagel announced on
31 October that Israel will get “six V-22s out
of the next order to go on the assembly line”.
Hagel said the aircraft will “greatly enhance
the range and effectiveness of Israeli spe­
cial forces”. They would also significantly
increase the IAF’s ability to rescue pilots
who eject during long-range sorties, filling a
capability gap that has prompted speculation
that Israel would need to stage helicopters
out of Iraqi Kurdistan or Azerbaijan during
an attack on Iran.
The window for such an attack closed (at
least temporarily) with the Iranian presiden­
tial election in July. Hassan Rowhani - the
most moderate candidate on offer - won a
landslide victory and a mandate to negotiate
a deal that would ease the sanctions imposed
60
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on the country. “It is a beautiful thing to have
[uranium enrichment] centrifuges spin, but
on the condition that the country’s wheels are
also spinning,” he said during his campaign.
After intense negotiations between Iran
and the permanent members of the United
Nations (UN) Security Council and Germany
(the P5+1), a deal was reached in the early
hours of 24 November. The Iranians agreed to
stop producing HEU, dilute all their existing
HEU or turn it into reactor fuel, cease work
on the IR-40 reactor at Arak, and allow more
intrusive inspections. They will be allowed to
continue producing low-enriched uranium
(LEU), but will not increase the number of
operational centrifuges or the LEU stockpile
above its current level. In return, Iran will
receive some sanctions relief and access to
some frozen bank accounts.
This was presented as a preliminary,
six-month deal that would build confidence
and pave the way for a more comprehensive
agreement aimed at completely neutralising
Iran’s ability to produce nuclear weapons.
Friendly fire
The White House tried to pre-empt any
criticism of the deal. It noted in a fact sheet:
“Taken together, these first-step measures
will help prevent Iran from using the cover
of negotiations to continue advancing its
nuclear programme as we seek to negotiate
a long-term, comprehensive solution that
addresses all of the international community’s
concerns.” It stressed that the concessions
made by the P5+1 were “limited, temporary,
targeted, and reversible”.
Netanyahu - who had argued since July that
Rowhani would use negotiations to buy time
to build a nuclear weapon - was unimpressed.
“What was achieved last night in Geneva
mistake,” he told his cabinet on 24 Novem­
ber. Noting that the P5+1 had effectively
authorised Iran’s enrichment of uranium for
the first time, he said: “Today the world has
become a much more dangerous place because
taken a significant step toward attaining the
most dangerous weapon in the world.”
While it is inconceivable that Netanyahu
will order an attack for as long as Iran remains
committed to the current deal, he could try
to encourage the US Congress to pass more
sanctions, thus undermining the confidence-
building process.
Netanyahu is not the only US ally in the
region who is deeply uneasy about engaging
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» ANNUAL DEFENCE REPORT 2013 The Middle East and Africa
with Iran. The Saudis have made it clear in
off-the-record briefings that they share the
Israeli prime minister’s opposition to the
negotiations, as well as the US government’s
decision not to intervene in Syria and its
tepid criticism of the coup in Egypt.
This frustration apparently manifested
itself in Riyadh’s rejection of a temporary
seat on the UN Security Council in October,
although the move was officially a protest
against the UN’s failure to end the war in
Syria, resolve the Israeli-Palestinian con­
flict, and make the Middle East “a zone
free of all weapons of mass destruction”.
The unprecedented Israeli and Saudi
criticism of the Obama administration’s
Middle East policies has fuelled concern
that the US has lost credibility with its
regional allies, who will now look for alterna­
tive ways of guaranteeing their security. There
has been speculation that the Saudis could
facilitate an Israeli attack on Iran or buy Paki­
stani nuclear weapons. The BBC’s Newsnight
show raised the latter spectre again when it
cited a “senior NATO decision-maker” as say­
ing he had seen intelligence that the nuclear
warheads were ready for delivery.
Arms diversification
There has also been speculation that some
Middle Eastern states will diversify their arms
suppliers, just as Turkey did when it selected
China’s HQ-9 system for its long-range air
defence requirement. Russia was mooted
as another possible beneficiary. A visit by
Russian Defence Minister Sergey Shoigu to
Egypt in November 2013 was accompanied
by reports that Cairo and Moscow were lining
up a major arms deal. However, Rostec CEO
Sergey Chemezov highlighted a significant
snag: “Because of the financial problems
that have arisen on the Egyptian side, these
contracts are for now only at the stage of dis­
cussion,” he told Russian state news agency
RIA Novosti.
In reality, the Arab Gulf states are unlikely
to buy Russian when Moscow is supplying
arms to Syria and providing Assad with diplo­
matic top cover at the Security Council. Many
are already locked into major US programmes,
such as Saudi Arabia’s F-15SA fighter and
M1A2S MBT upgrades. In a sign that business
would proceed as normal, Boeing announced
at the Dubai Airshow in November that it had
signed a deal with an unidentified customer -
presumed to be Saudi Arabia - to deliver AH-6i
attack helicopters.
In fact, there is already significant
38 [ Jane’s Defence Weekly 11 December 2013
A Senegalese peacekeeper in Mali.
diversification in the Gulf defence market,
with West European companies being the
main beneficiary. This trend continued
in 2013, with Germany’s Krauss-Maffei
Wegmann (KMW) announcing in April
that Qatar had ordered 62 Leopard 2 MBTs
and 24 PzH 2000 155 mm self-propelled
artillery systems. France’s DCNS reportedly
won a major contract to upgrade Saudi naval
vessels and was reportedly close to finalis­
ing another to upgrade the Saudi army’s Sha-
hine short-range air-defence systems.
The European aerospace companies also
seem confident that either the Eurofighter
Typhoon or the Dassault Rafale will win the
Emirati fighter contest, although a deci­
sion continues to be delayed. They are also
competing against US aircraft for Kuwaiti
and Qatari orders. One of the key selling
points of the Typhoon and Rafale is that they
will come with advanced European weapons.
After years of denial, BAE Systems finally
admitted in a results statement published in
March 2013 that it was selling Storm Shadow
air-launched cruise missiles to Saudi Arabia.
The US increased the attractiveness of its
fighters in 2013 when it agreed to supply
new types of weapons to Saudi Arabia and
the UAE. These include Raytheon AGM-154
Joint Stand-Off Weapons (JSOWs), Boeing
AGM-84H Standoff Land Attack Missiles -
Expanded Response (SLAM-ERs), and Boeing
GBU-39/B Small Diameter Bombs (SDBs).
While none of these deals have been final­
ised, Textron Defense Systems was awarded
aUSD640 million contract to produce 1,300
CBU-105 advanced cluster munitions for
Saudi Arabia in August.
The UAE’s investment in developing its
defence industry is producing some interest­
ing collaborations. The Emirati army displayed
its new Multiple Cradle Launchers (MCLs) for
the first time at the IDEX defence exhibi­
tion, held in Abu Dhabi in February. Clearly
developed with the help of Turkey’s Roketsan,
the MCLs comprise Oshkosh transporters tow­
ing semi-trailers with three or four 122 mm
rocket launchers, each with 60 tubes. During
the Dubai Airshow it was announced that the
Emirati air force had placed an order for
the Al-Tariq bomb guidance kit: a sys­
tem that was originally developed by
South Africa’s Denel Dynamics.
While the Europeans and
South Africans are using
technology transfer agreements to increase
their share of the Emirati market, only the
US can supply a combat-proven ballistic
missile defence system: the Raytheon/Lock­
heed Martin Patriot PAC-3. It also has the
only operational exo-atmospheric missile
interceptor in the form of the Lockheed
Martin Terminal High Altitude Area Defence
(THAAD) system.
Production contracts were awarded to
Lockheed Martin for the Emirati THAAD and
Kuwaiti PAC-3 upgrade in 2013. Qatar has
expressed interest in both systems; although
there were no overt developments on this
front over the last year, it requested the sale
of a Raytheon AN/FPS-132: an early warning
radar with a 5,000 km range. Saudi Arabia
has yet to request either THAAD or PAC-3
upgrades for its existing PAC-2 fire units.
Ultimately, the United States also remains
the overwhelmingly dominant military
power in the region. While Israel and the Gulf
states may want it to take a harder line on
Iran and Syria, they still need close defence
relationships with the United States to guar­
antee their security.
From crisis to crisis
In Africa it seems as though another crisis
emerges as soon as the international com­
munity begins to get a grip on the previ­
ous one. In 2012 the situation in Somalia
appeared to be improving as the African
Union Mission in Somalia (AMISOM)
expanded out of Mogadishu.
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The Middle East and Africa ANNUAL DEFENCE REPORT 2013 «
The new crisis appeared in Mali, where
a coup in Bamako allowed a coalition of
Islamists to take control of the north.
Mali saw another dramatic reversal in
2013 after a militant offensive prompted
French military intervention in January. The
militants were largely defeated by the end
of February, with the Malian Armed Forces
(FAMa) re-installed in two of the north’s
major cities (Timbuktu and Gao) and Tuareg
separatists taking the opportunity to move
into the third (Kidal).
While French counter-insurgency opera­
tions continued, the emphasis shifted to sup­
porting the deployment of a peacekeeping
force, supervising a rapid transition back to
democracy, encouraging a national recon­
ciliation process that would curb northern
separatism, and reforming the security sec­
tor. Elections were successfully held in July,
the new government moved to marginalise
the coup leaders, and the EU Training Mission
in Mali is currently training a third, multi­
ethnic battalion.
Progress was also made in other African
trouble spots in 2013. Sudan and South
Sudan reached an agreement in March over
how much the latter pays to export its oil
through the former’s pipeline to the Red Sea.
While this resolved one of the main issues
of contention, the two Sudans continued
to accuse one another of supporting their
respective rebel forces.
After suffering humiliating defeats in
2012, the Armed Forces of the Democratic
Republic of the Congo (FARDC) managed
to regain some dignity by crushing the M2 3
rebel group in early November. One possible
explanation for this remarkable turnaround
was the deployment of the Force Interven­
tion Brigade (FIB): a UN force with a mandate
to go on the offensive against the militias of
North Kivu province. While the UN played
down the role of the FIB, there were rumours
that its South African contingent was
engaged in heavy fighting.
Rwanda may have ceased its support for
M2 3 due to pressure from its foreign donors.
“If it turns out that Rwanda is no longer
involved in such activities... then we would
certainly review whether it’s appropriate to
continue these sanctions,” Russ Feingold, the
US special envoy, said in November.
Even if this was the case, the FARDC man­
aged to concentrate its forces and overrun
the rebel positions at Kibumba after pound­
ing them with multiple rocket launchers
and T-55 tanks. It also had the logistics to
ihs.com/janes
advance to Bunagana on the Ugandan border,
where the last M2 3 positions were captured.
Meanwhile, the Central African Republic
(CAR) became the new crisis country of
2013. At the start of the year it appeared
that the Seleka coalition of rebel groups had
stopped their offensive after the Economic
Community of Central African States
(ECCAS) reinforced its Mission for the Con­
solidation of Peace in the CAR (MICOPAX).
Chadian troops moved across the border
and took up a defensive position at Damara,
around 70 km north of the capital. “If the
rebels attack Damara, that would amount to
a declaration of war [against] the 10 Cen­
The Central African Republic became the
new crisis country of 2013
tral African states,” MICOPAX’s Gabonese
commander, General Jean Felix Akaga, told
journalists on 2 January.
Yet MICOPAX did nothing to stop Seleka
when it renewed its offensive in March. The
only serious resistance came from a contin­
gent of South African paratroopers and spe­
cial forces that had been deployed to protect
a training team. The South Africans inflicted
heavy casualties and suffered 13 fatalities in
a nine-hour battle on 23 March before being
ordered to withdraw to the international
airport. The CAR’s president, Francois Bozize,
fled the capital as the rebels moved in.
Although ECCAS decided to recognise
Seleka as the new transitional government,
the country was plunged into lawlessness and
violence. In November UN Secretary-General
Ban Ki-moon warned that the situation
could get worse. “In response to the viola­
tions committed by the ex-Seleka combat­
ants, traditional militia groups known as the
‘anti-balaka’ have emerged, creating a new
dynamic of violence and retaliation,” he said
in a report. “This cycle, if not addressed now,
threatens to degenerate into a countrywide
religious and ethnic divide with the poten­
tial to spiral into an uncontrollable situation
that could include atrocities and have serious
regional implications.”
Shortfalls
In response the African Union authorised
the establishment of the International Sup­
port Mission for the CAR (MISCA), with a
uniformed strength of 3,500, the core of
which would be created by rebadging the
2,500 MICOPAX soldiers on 9 December.
The plan to form MISCA, along with the
expansion of AMISOM to more than 22,000
uniformed personnel, created a major surge
in demand for African peacekeepers at a time
when the UN Multidimensional Integrated
Stabilisation Mission in Mali (MINUSMA)
was still around 6,000 troops short of its
authorised strength of 11,200. “We are faced
with severe challenges,” UN special represen­
tative to Mali Bert Koenders told the Security
Council on 16 October. “Troop generation
will have to accelerate.”
There were also major problems find­
ing the transport aircraft and helicopters
needed to support peacekeeping operations
in Africa. This situation was compounded in
August 2012 when three Ugandan Mi-24s
crashed into Mount Kenya on their way
to Somalia, leaving AMISOM without a
single helicopter.
In a rare example of a Western country pro­
viding a military contribution to an African
peacekeeping operation, the Netherlands said
it would support MINUSMA by deploying
four Apaches to Mali, along with personnel to
gather and distribute intelligence.
Some African countries are increasing
their tactical transport capabilities. Ghana,
for example, commissioned high-spec
Mi-17 ISh helicopters in January and
announced in September that it would
lease two Airbus Military C295transports
to support MINUSMA.
However, other African countries are
spending more on jet aircraft that are expen­
sive to maintain. The Russian media reported
in October that Angola would buy the 18
Sukhoi Su-30K fighters that were used by
India as a stopgap solution and returned
when it received its Su-30MKIs.
Sudan, meanwhile, took delivery of new
Sukhoi Su-24 supersonic ground-attack
aircraft, and the DRC received more Sukhoi
Su-25 ground-attack aircraft. Photographs
published on the internet also showed that
Mozambique was returning its fleet of
Mikoyan MiG-21 s to the air with the help
of Romanian company Aerostar.
There are even rumours that Uganda
is looking to buy another squadron of
SU-30MK2 fighters. ■
11 December 2013 Jane’s Defence Weekly | 39
» ANNUAL DEFENCE REPORT 2013
Industry
In 2013 the challenges of budget cuts and the need to restructure to survive were largely met with
stoicism in the Western world, while industry in the East increasingly looked to international expansion
or the US and European defence sector,
F 2013 was one of the more significant of
recent years. The fog of uncertainty that
shrouded the industry as 2012 drew to a close
thickened as the new year dawned. Fears over
the impact of US sequestration were realised,
leading to a frenzied atmosphere on Capitol
Hill, and a sense of confusion about the future
of the defence industry reigned.
In times past, European contractors would
have watched with a sense of detachment.
Heaving investment in the US defence
market over the preceding decade, however,
and reliance on US spending to bolster weak
domestic demand, served to spread the fear
across the Atlantic.
Sequestration had a direct impact on
defence companies on the both sides of the
Atlantic, and the uncertainty hampered
efforts to plan and adjust to new realities.
While in the United States industry did not
miss an opportunity to defend its interests and
make the case for the sequester to be ended,
and for defence to share a lesser burden of US
deficit reduction efforts, Europe’s industrial
40 | Jane’s Defence Weekly 11 December 2013
atmosphere was marked by stoic resignation.
Across Europe there was general consen­
sus: national governments are under severe
fiscal strain and economic recovery is slow;
domestic demand will plateau at best and
most likely decline; and exports are not guar­
anteed. Therefore, a reduced defence industry
is a certainty.
In the United States the future looked
more confused, with debate heavily influ­
enced by the highly charged political environ­
ment. For industry leaders it was a question
of specificity: which programmes would be
funded and which would not? Without know­
ing the direction of travel, taking business
decisions became fraught.
As Lockheed Martin told IHS Jane’s in May,
uncertainty created “an overhang on our
industry that stifles investment in plants,
equipment, people, and future research and
development essential to the future health of
our industry”.
By the end of 2013 it was possible to
detect faint signs of optimism among leading
industry players, albeit this was owed more to
Industry
the feeling that the worst was known than to
signs that better times lay immediately ahead.
Industrial consolidation
The question of industrial consolidation was
an underlying theme on both sides of the
Atlantic. Europe’s concern was how far and
how fast industrial consolidation would go.
Over-capacity and duplication of effort - for
example, there are 11 concurrent land systems
programmes in Europe and three concurrent
multirole fighter programmes - were cited as
just causes for consolidation, yet the solution
to the puzzle was no nearer to being found.
By volume and value, mergers and acquisi­
tion (M&A) activity in the European defence
sector was weak despite some expectations
to the contrary at the outset of the year.
The flurry of deals expected by financiers
in the second half of 2013 failed to mate­
rialise, and the transformational activity
that many insist is a necessity - such as the
failed BAE Systems and EADS merger - was
seldom on the agenda for the year. What
deal-making did occur followed the same
trajectory as it did in previous years: in-fill
acquisitions to position for best advantage
in the remaining perceived growth domains
(for example: cyber security and unmanned
aerial systems), or speculative investment
by non-strategic players, taking advantage of
subdued asset values and betting on areas of
growth in the coming years.
In the United States budgetary uncertainty
was a key influence in the absence of major
M&A activity, despite a general consensus
that a contraction in the number of defence
companies is both likely and necessary.
There appeared to be little appetite within
the Pentagon for consolidation at the prime
level, while industry had little expectation
that there would be a ‘Last Supper’ of the
kind that saw the last great round of prime
contractor consolidation in the mid- 1990s.
M&A activity in the United States was char­
acterised by consolidation among the lower
tiers and the creation of spin-off companies,
ihs.com/janes
Industry
following divestment by larger primes.
Indeed, IHS Jane’s analysts have commented
that the conditions that led to the creation
of L-3 Communications - a collection of
cast-off Lockheed assets that grew into a
behemoth - are in play today, positing an
interesting view of what may lie ahead.
According to IHS Jane’s data (which
includes transactions of commercial
aerospace companies with exposure to
defence markets), in the first six months of
2013 there were 58 transactions compa­
rable, with previous years (59 transactions
in 2012 and 61 transactions in 2011).
However the deal values were much lower,
totalling only USD3.16 billion, compared
with USD4.26 billion in 2012 and USD9.87
billion in 2011 during the same period.
Additionally, almost 80% of the deals were
transacted within borders: a far higher
percentage than in the previous four years,
which averaged around 65%.
Restructuring and regulatory reform
The trend of company restructuring and
subsequent job reductions across Europe and
the United States continued up and down
the supply chain. Job losses ran into tens of
thousands on both sides of the Atlantic.
Almost all major companies announced
facility closures, portfolio divestments,
and/or major workforce reductions. By way
of example: in 2013 alone US company
announcements regarding job losses totalled
almost 30,000, exceeding 2012 levels by
roughly one-third. Across Europe the picture
was the same. Almost all major companies
announced deep job cuts and site closures,
and many warned of more to follow.
Of additional concern was the impact of
prolonged stress on defence supply chains.
Niche suppliers of technologies relying
on a few - perhaps even only one - major
programme are particularly exposed and
vulnerable. With procurement money being
concentrated in fewer programmes over
longer acquisition periods, the question of
the health of the supply chain became even
more important. In the United Kingdom, the
government launched the Defence Growth
Partnership initiative, an export-led strategy
to support the wider industry - particularly
small and medium enterprises (SMEs) - to
combat the long-term threats faced by the
industry by reduced domestic demand.
On the political side, both Europe and
ihs.com/janes
ANNUAL DEFENCE REPORT 2013 «
the United States saw regulatory reforms
affecting industry. Of particular note in
the United States was the long-anticipated
Export Control Reform (ECR).
After a long period of hiatus and inactiv­
ity, a series of measures aimed at stream­
lining the International Transfer of Arms
(ITAR) system was signed into law. The first
round of rule changes (the ECR is being
rolled out in a phased approach into 2014)
took effect in October. Items such as satel­
lite technologies that were previously listed
on the United States Munitions List (USML)
were removed and placed on the Commer­
cial Control List to allow for easier interna­
tional export.
The reforms also opened up the global
supply chain for component providers to
military systems. The new ECR allows US
industry to search the world for customers
hitherto inaccessible because their compo­
nents were governed by ITAR.
Indeed, international original equipment
manufacturers (OEMs) sometimes try to
avoid US-origin components so that their
final product will not be drawn under ITAR
control. The new rules open up many more
opportunities for component manufacturers
in the United States.
In Europe the greatest regulatory change
was the previous year’s implementation of
European Union (EU) defence procurement
directive 2009/81/EC: the market-changing
measure intended to open the bloc’s defence
markets to greater cross-border competi­
tion. Scheduled for transposition in August
2012, a degree of clarity began to emerge in
2013: particularly relating to the practice
of defence offsets. Offsets - a practice upon
which European regulators frown - escaped
mention in the directive, although the mar­
ket was framed in such a way as to make their
application extremely difficult. A series of
defence markets announced updated offsets
procedures in 2013, indicating the practice
is far from dead although application may
certainly be curtailed.
The longer-term impact of directive
2009/81 /EC remains to be seen, but its bid
to increase cross-border competition sparked
justifiable concern among smaller defence
manufacturing countries, with some fearing
the new EU rules will allow larger European
primes to outmuscle indigenous companies.
At the same time, these smaller players will
no longer derive benefit from offsets and are
unlikely to be enriched by the ‘liberalised’ EU
defence procurement environment.
International competition
Companies on both sides of the Atlantic
continued to seek growth opportunities in
international markets. The cash-rich and
emerging economies in the Middle East and
Asia continued to attract activity, the source
of some relief for Western firms from the
travails of domestic markets.
A number of countries, including Saudi
Arabia, the United Arab Emirates, and Qatar,
are undergoing systematic modernisation
programmes that require new equipment and
capability, spending vast sums in the process.
Their own indigenous industries are not
mature enough to meet requirements and
the regional demand for the most sophisti­
cated equipment available continued to bait
the international feeding frenzy that has
developed in recent years.
However, in contrast to similar investment
periods in past decades, these Middle Eastern
customers demonstrated a keen understand­
ing of their newfound importance. Interna­
tional OEMs proactively sought partnership
with local companies hoping to ride the wave
of defence self-sufficiency and indigenisation
policies being pursued by many Gulf countries.
US companies became more active than ever,
looking to transact deals not just through the
Foreign Military Sales (FMS) system - long a
preferred route to market - but also through
direct commercial sales. This was matched by a
new spirit of partnering with local companies,
particularly in the Middle East. The Dubai
Airshow in November saw the announcement
of a number of partnerships, including those
of Boeing and Tawazun, and Abu Dhabi Ship­
building and Spain’s Navantia.
Asia-Pacific region
In Asia, 2013 was marked by China’s growing
industrial ambition, evidenced by increasing
efforts to penetrate international defence mar­
kets through acquisitions and military sales.
IHS Jane’s tracked five completed acquisi­
tions in 2013 featuring Chinese purchases of
US- or European-based aerospace firms that
had varying degrees of exposure to defence.
In 2012, by comparison, Chinese companies
secured two acquisitions, while a bid for
another company, US-based Hawker Beech-
craft, proved unsuccessful.
The most notable acquisitions completed in
11 December 2013 Jane’s Defence Weekly | 41
» ANNUAL DEFENCE REPORT 2013
2013 included Chongqing Helicopter’s pur­
chase of Enstrom, a US manufacturer of com­
mercial and military helicopters, and state-run
Aviation Industry Corporation of China’s
(AVIC’s) acquisition of German company
Thielert, a manufacturer of aircraft engines.
China’s expansion into global markets has
been underlined by a dramatic rise in exports
in recent years. The value of deliveries of
Chinese materiel to export markets stood at
USD 1.16 billion in 2012, according to IHS
DS Forecast figures. By 2012 this figure had
increased to USD2.2 billion, putting China
in eighth place worldwide (behind the US,
Russia, the UK, France, Germany, Israel, and
Italy) and supplanting Spain and Sweden.
Expansion efforts were further exemplified
by Turkey’s selection in September of HQ-9
surface-to-air (SAM) missiles developed by the
China Precision Machinery Import-Export
Corporation. In late 2013 the United States
was putting pressure on Turkey to review its
decision, but if the deal is signed it will repre­
sent China’s largest-ever military export.
China attributed its preferred-tenderer
status in Turkey to the low cost of its materiel
and its willingness to transfer technologies
to Turkish industry. In this sense, 2013 was
also a year in which China was conspicuous
in promising dozens of potential custom­
ers around the world - from Argentina to
Zambia - full technology transfer to support
potential military purchases.
Given the financial firepower of China’s
defence industry and its high motivation
to expand and develop through access to
42 | Jane’s Defence Weekly 11 December 2013
Western technologies, its penetration in
international markets through acquisitions
and exports is certain to become an increas­
ing feature in the global defence market, and
in 2 014 further deals can be expected.
While China’s industrial progression in
2013 was marked by corporate expansion and
capability improvements - signalled by the
emergence during the year of platforms that
include a new strategic airlifter and modern
missiles systems - advancements made by its
rival and neighbour, India, were hindered by
excessive procurement delays.
Major Indian programmes delayed during
2013 include the indigenous programme to
develop a Future Infantry Combat Vehicle,
the acquisition of 126 Dassault Rafale fighter
aircraft, and the purchase of 145 M777 towed
155 mm lightweight howitzers. These delays,
and others, are related to administrative
procrastination, lingering concerns over Indian
industrial capability, and the country’s dimin­
ishing purchasing power: a factor linked with
the continuing depreciation of the rupee.
India’s procurement system was ques­
tioned further by the scandal surrounding
its purchase of 12 AW101 helicopters from
AgustaWestland. The company has consis­
tently denied allegations that it paid bribes
to secure the contract, but this did not stop
India suspending payments with the major­
ity of the helicopters undelivered. The legal
minefield that accompanies misconduct
allegations in India were put into perspec­
tive in October when India’s Central Bureau
of Investigation concluded that unrelated
Industry
corruption charges levelled eight years earlier
against Denel could not be substantiated.
Procurement delays in India are also affect­
ing the development of local industry due to
a lack of finalised offset programmes (New
Delhi revealed in August that just 18 defence
deals had been concluded since introducing
offset in 2005) and a reduced exposure to for­
eign technologies. BAE Systems, for instance,
cited M777 procurement delays as a factor
prompting its decision - announced in Febru­
ary - to pull out of a joint venture (JV) with
Mahindra. The cancellation of the partnership
was notable, given that it was the first major
deal (agreed at USD6 million in 2009) to
attract foreign investment into India’s defence
market. In 2013 the value of such JVs fell to a
record low of just USD 17,000 when France’s
NSE concluded a JV with Hical Technologies.
Given its problems during the year, it is
notable that India introduced in 2013 an
overhauled Defence Procurement Proce­
dure (DPP) that includes new guidelines to
improve the efficiency of acquisitions. Unfor­
tunately, the lack of positive impact of previ­
ous DPP updates means it is unlikely that the
2013 version will have the desired effect.
Elsewhere in Asia, the military modernisa­
tion of China - coupled with Beijing’s moves
to enhance its strategic influence across the
region - can be partly attributed to increas­
ing efforts during 2013 to develop defence
industrial capabilities through collaboration
between local companies and those from
the Europe, Russia, and the United States.
Meanwhile, countries in the region that felt
no direct threat from China - Indonesia, for
instance - increasingly regarded Beijing as a
potential technology provider.
Japan most clearly illustrates Asia’s growing
emphasis on industry co-operation. Gradu­
ally breaking free from years of self-enforced
defence industrial isolation, in which it has
allowed itself to co-operate only with the
United States, in 2013 Japan added Turkey
and France to its expanding list of potential
collaborators. Tokyo also signed a Defence
Equipment Cooperation Framework with
the United Kingdom - the first fruit of which
was a deal to co-develop protective hazard
suits - and, on a larger scale, finalised a deal
to co-operate with Lockheed Martin on the
local production of the F-35 fighter. While the
industrial programme with the United King­
dom can hardly be considered high profile, it
does represent the start of what is certain to be
additional joint projects in future years with
countries that Tokyo considers allies. ■
ihs.com/janes
18th INTERNATIONAL AIR & SPACE FAIR
Arturo Merino Benitez Airport - Av. Diego Barros Ortiz 2300, Pudahuel
Phone: 56-2 29769563
www.fidae.cl - E-mail: ptrivelli@fidae.d
 A WORLD OF MARITIME SECURITY.

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■ , - '■ -■ -
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a.