The Military Balance 2013

                              THE MILITARY BALANCE 2013


INTRODUCTION
Welcome to the launch of The Military Balance 2013, the annual assessment of global military capabilities and defence economics from the IISS.
Joining me to answer your questions today are James Hackett, Editor of The Military Balance; Nigel Inkster, Director of Transnational Threats and Political Risk; Mark Fitzpatrick, Director of the IISS Non-proliferation and Disarmament Programme; Dana Allin, Senior Fellow for US Foreign Policy and Transatlantic Affairs and Editor of Survival; Toby Dodge, Consulting Senior Fellow for the Middle East; Douglas Barrie; Senior Fellow for Military Aerospace; Brigadier Ben Barry, Senior Fellow for Land Warfare; Christian Le Mière, Senior Fellow for Naval Forces and Maritime Security; Henry Boyd, Research Associate for Defence and Military Analysis; Giri Rajendran, Research Associate for Defence and Economics; and Virginia Comolli, Research Associate for Transnational Threats.
This year’s Military Balance sees continued improvements to the book’s presentation, information and assessments. We have reorganised and expanded the set of defence policy and capability essays at the start of the book, and have added a new section on ‘conflict analysis and conflict trends’, this year focusing on the wars in Afghanistan and Syria. We again analyse policy and defence economics questions for the countries with the largest defence budgets, and this year assess more countries. The analytical summaries of national military capabilities, introduced to some regions in the book last year, are now complete. These country capability summaries are designed to help inform readers’ understanding of the numerical data within the book and are part of our effort to
build more qualitative analysis on to The Military Balance’s renowned sets of quantitative data.
SYRIA AND THE MIDDLE EAST
This year’s Military Balance is published at a time when global attention remains focused on the strategic consequences of the Arab Spring, and particularly the civil war in Syria.
Across that country, ethnic and sectarian faultlines have deepened. It is likely that government capability and support will further diminish. From a notional strength of 220,000, the Syrian army’s effective strength had fallen by autumn 2012 to about half that number. Essentially, the regime could only be certain of the loyalty of the mainly Alawite Special Forces, the Republican Guard, and the elite 3rd and 4th Divisions – perhaps 50,000 troops in total. The cumulative effect of defections, desertions, battlefield losses and damage to morale will weigh heavily in determining the outcome oftheconflict.
External support for the rebels is increasing, in terms of non-lethal assistance, funding for weapons procurement and, possibly in the near future, overt foreign supply of combat-capable equipment. They are now able to acquire some limited capabilities from foreign sources. Though a notionally united opposition emerged after talks in Qatar last November, concern persists about the sheer number of rebel groups, their aims, and the presence of jihadists. While the rebels’ capability is increasing, the embattled Assad regime is aware of two things: on the one hand, the many rebel groups share a common objective to remove it; but on the other hand, they share little else, are disunited and un-coordinated. Instances of rebel-on-rebel violence
have been seen, as have confrontations between rebel forces and ethnic militias.
The Assad regime is also aware that direct foreign intervention remains unlikely, so long as no red lines are crossed, for example through the use of chemical weapons. Syria will not be another Libya. But events in that country will provoke concerns about the aftermath of a regime collapse. A year and a half after the fall of Muammar Gadhafi, many Libyan rebel groups have still to disarm. If Assad falls, there will be considerable focus among regional states and international actors about the intent of armed groups and the fate of government and rebel weapons. There is a considerable risk that a rapid end to the conflict is likely to be as destabilising as its prolongation.
Elsewhere in the region, Egypt’s president Morsi has recalibrated relations with the country’s military leadership, but has not challenged the armed forces’ core corporate interests. Both Egypt and Tunisia saw comparatively stable transitions, at least initially. But extended civil deployments could have a negative effect on the readiness of both states’ armed forces. In Tunisia, there is concern that border security and the fight against armed militants have been partly sacrificed to the need to maintain civil order in cities.
Another regional country is in a later stage of its transition, and provides a salutary reminder of the possible outcome of regime change. As noted in our recent Adelphi book ‘Iraq: from war to a new authoritarianism’, heavy investment in the reconstitution of Iraq’s security forces since 2004 has left the country again subservient to a military machine. The Adelphi says that the way the armed forces are now used by Prime Minister Maliki ‘makes Iraq comparable not only to the repressive Arab regimes of the pre-spring Middle East, but also to the country’s own history, from its independence in 1932 to regime change in 2003’. Beyond political interference, a broad set of problems continue to plague the Iraqi army and challenges remain for the armed forces to protect Iraqi airspace, the borders and deal with continuing terrorist campaigns.
DEFENCE SPENDING
While the Middle East region is clearly in a state of flux, all around it the global redistribution of military power is continuing. Reflecting the subdued global economic climate, total defence spending actually fell in real terms in 2012 for a second year running. However, real increases were seen in the Middle East and North Africa, Russia and Eurasia, Latin America and in Asia, while real declines were seen in North America and Europe. As we predicted this time last year, 2012 saw nominal Asian defence spending overtake that of NATO European states for the first time.
This is not simply a result of Asia spending more; it is as much a result of states in Europe spending less. In 2012, European NATO members’ defence spending was, in real terms, around 11% lower than in 2006. This reduction continues to shape military capabilities, and especially in the United Kingdom, France, Germany, Italy and Spain which account for almost 70% of European spending. According to our data, total military personnel in European NATO states have reduced from 2.51 million in 2000 to 1.86m for the same set of states now, a decline in excess of 25%. The intention was that reduced numbers, when combined with structural reforms, would produce an increase in the usability of armed forces. But in many European countries, this has not happened. The budget crisis exacerbates the trend. Regardless of their strategic intent to maintain forces suited to present-day needs, defence ministries are playing ‘catch-up’, adjusting force structures to match immediate financial priorities.
In 2011, European capability gaps were underscored by the war in Libya. The 2013 operation in Mali again highlighted shortcomings in airborne refueling, airlift and ISR. Discussions on pooling, sharing and role specialisation continue, and NATO promotes its ‘smart defence’ initiative. But progress towards better cooperation remains limited, with national capitals concerned about loss of sovereignty and jobs. This is occurring as it becomes ever more clear that Europe should not presume that the US will provide the same level of operational support. The restricted nature of the US role in Libya, and again this year in Mali, could be seen as an incentive for European countries to work together to develop a wider spectrum of capabilities. But there is little sign of this happening.
Defence spending is also in decline in the United States. The Pentagon was already implementing cuts of $487 billion over five years, and as a result of sequestration will
now need to make additional reductions of $600bn over ten years. The inflexible design of sequestration and the exemption of military personnel accounts from the process limit the DoD’s room for manoeuvre.
It needs to be remembered, however, that the defence budget of the United States still equals that of the next 14 nations combined and the United States still intends to remain engaged globally. Although much has been said about ‘rebalancing’ to the Pacific, in military terms there is less to this than first appeared. It will of course be important in the longer term, but the rebalance should mainly be seen as a signal that the US will remain engaged in Asia-Pacific security, reflecting not just US economic ties to the region but also the emergence of China as a regional competitor in both economic and military terms.
China’s indigenous capacity to produce advanced equipment is gradually transforming the People’s Liberation Army. China’s rise, and its growing strategic reach, was illustrated by the commissioning of its first aircraft carrier in September, and the first at-sea landing of the J-15 combat aircraft two months later. But China is still learning how to operate carriers, the J-15 remains largely developmental and the PLA Navy’s ability to carry out integrated carrier task group operations remains embryonic. Attention should also be paid to the new Type-052D destroyer, possibly designed to provide a blue-water air-warfare destroyer capability, the modular Type-056 corvettes, and new maritime patrol aircraft as well as recent developments in China’s guided weapons systems.
China’s military developments are fuelled by continuing increases in defence spending, witnessed by the 10.7% rise in its official defence budget announced last week. China now spends more on defence than
neighbouring Japan, South Korea and Taiwan combined. When might Chinese spending rival that of the United States? If the 15% average annual increases in China’s official defence spending seen over the past decade continue into the medium term, Chinese defence outlays could rival US base defence-budget spending by 2025. If additional elements of military spending widely believed to be excluded from the official PLA budget are included, convergence could occur in 2023, just a decade away. A graph on page 42 of The Military Balance 2013 shows a comparison of China–US defence spending projections under various assumptions.
FLASHPOINTS AND CONFLICTS
In the Asia-Pacific, potential flashpoints and smouldering conflicts continue to threaten peace and stability. In North Korea, it is clear that the ‘military first’ policy remains intact despite the change of leadership at the top. Following a failed effort last April, Pyongyang successfully launched a rocket to space in December then, in February, for the third time tested a nuclear device. Pyongyang claimed the test was of a miniaturised nuclear bomb, and the yield was estimated to be around 6–7kt. A test of a smaller device would be expected if North Korea wanted to be certain that it had a workable warhead to fit the nosecone of its Nodong missiles.
Continuing tensions in the South China Sea have unnerved several Southeast Asian governments, particularly the Philippines and Vietnam, further motivating their attempts to improve their military capabilities. The IISS analyses these issues in its next Adelphi book ‘Regional Disorder: The South China Sea Disputes’. Territorial disputes are also flaring in Northeast Asia, with tension rising between Japan and China following a radar lock-on incident in January.
Across East Asia, advanced military systems such as anti-ship missiles, new submarines, advanced combat aircraft and cruise missiles are proliferating in a region lacking security mechanisms that could defuse crises. Bilateral military to military ties are often only embryonic. There is a tangible risk of accidental conflict and escalation, particularly in the absence of a strong tradition of military confidence-building measures.
Iran’s expanded uranium enrichment capacity, as well as continuing construction of the Arak reactor, with the plutonium production route this will provide, means that for Western powers there is a more urgent need for progress
in diplomatic talks. Fear of Iran is an important influence on the Gulf states’ military programmes. Meanwhile, Iran appears to have upgraded old air defence systems supplied originally by the US and the Soviet Union, and is believed to have acquired a licensed production line for anti-ship missiles. The creation of hybrid systems based on outdated weapons, but supplemented with modern subsystems, and deployed using asymmetric tactics, has the potential to surprise adversaries.
In Afghanistan, the insurgency is not expected to have been eliminated by the end of 2014. Rather, the hope is that it can be reduced to such a level that it no longer poses an existential threat to the state and can be contained by Afghan forces. The most likely situation in Afghanistan in 2015 is a patchwork of insurgent activity, suppressed in many areas but still important in others, particularly in the east.
CONCLUSION
This year’s Military Balance is, as you would expect, rich in detail and broad in its analytical reach, with an updated graphics section, essays on European defence industries, anti-access/area denial, trends in land, sea and air capabilities, Russian defence policy, and Latin American security challenges as well as the regions I have mentioned. As usual, it includes the wall-chart on global conflict.
We analyse in great detail emerging trends in the development of defence capabilities and assess more deliberately capacities in new areas such as cyber. A number of countries have embarked on acquisition programmes that will in time provide them with genuinely new capacities previously the preserve of Western powers and Russia. The nature and quality of submarine proliferation in Asia is a case in point.
For western states traditionally seen as net providers of security, responses to crises are complicated by declining finances for defence, as well as for diplomacy and aid. While the US, even in the current difficulties, stresses its commitment to Asia, it will be difficult to see how its most important partners in Europe will be able credibly to pivot with the US to this part of the world.
The Military Balance 2013 in no way describes a world that is egalitarian from a defence point of view. Over the next decade, understanding how the newly rich acquire genuinely important military capacities, and how long it takes for some established powers to lose certain key, especially expeditionary, abilities, will be an important task for all defence and strategic analysts.

Planned Global Defence Expenditure by Region 2012†
Latin America and the Caribbean 4.4%
Sub-Saharan Africa 1.2%
North America 42.0%
Middle East and North Africa 10.5%
Asia and Australasia 19.9%
Russia and Eurasia 4.4%
Europe 17.6%
†Figures do not sum due to rounding effects
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