DATE=3/6/2000
TYPE=BACKGROUND REPORT
TITLE=ASIA/MILITARY SPENDING
NUMBER=5-45583
BYLINE=AMY BICKERS
DATELINE=HONG KONG
INTERNET=YES
CONTENT=
VOICED AT:
INTRO: Beijing announced Monday that China would
increase military spending by nearly 13-percent. This
marks the 11th year in a row in which China has
announced double-digit defense spending increases. As
Amy Bickers reports from Hong Kong, many other Asian
governments say defense spending has yet to fully
recover from the effects of the Asian financial crisis
of 1997.
TEXT: The jump in China's military budget was made
known Monday during the Third Session of the National
People's Congress, now taking place in Beijing.
Analysts say the spending hike is the result of strong
lobbying for more money by China's military, which
argued that increased tension with Taiwan, the
military conflict with NATO in the former Yugoslavia
last summer and the bombing of China's Belgrade
embassy justify more funds.
Beijing does not disclose its actual defense budget,
so the increase simply indicates that the trend of
higher military spending continues. Western analysts
estimate that the country's military budget totals
about 36-billion dollars.
That kind of increase is in contrast to many other
countries in the region, especially in Southeast Asia,
where the after-effects of the economic crisis are
forcing countries to rein in military spending.
While many Asian economies have shown strong signs of
recovery, Bud Hollenbom, regional sales manager for
the U-S defense firm Raytheon, says military
procurement is still weak.
/// HOLLENBOM ACT ///
First of all, the recovery has been very slow
coming. I think people were optimistic in
thinking that it was going to turn around much
quicker than it has. It has been slow, and we
see signs of that now.
/// END ACT ///
Nevertheless, there are indications that change is on
the way. Last week, India announced a three-billion
dollar increase in defense spending -- the nation's
largest ever. The announcement follows a recent series
of bloody skirmishes along the border between India
and Pakistan in Kashmir. With the increase, military
spending will account for about one-sixth of India's
79-billion dollar budget.
Richard Aboulafia, senior analyst for the defense
consultancy Teal Group, predicts defense budgets in a
number of Asian countries will rise substantially in
the next decade.
/// ABOULAFIA ACT ///
Far and away the most important market for the
next two years is South Korea with their fighter
aircraft market. Taiwan is also a fairly
guaranteed market, particularly with the U-S
political will to support them in the
confrontation with China. Singapore is probably
going to be a market for a new fighter in the
next three to five years. Same for Australia --
six or seven years out.
/// END ACT ///
Mr. Aboulafia says that a big defense contract can
take three to six years to negotiate and finalize. He
says that defense companies around the world are now
trying to woo Asian buyers. He forecasts that
aviation-related military procurement will be the area
where most spending takes place.
/// ABOULAFIA ACT ///
I think one aspect of Asian defense is it is
very difficult to know what the future threat
will look like. Procurement has to be based on
a variety of scenarios and allow for a variety
of potential opponents equipped with a variety
of potential systems. It is difficult to
determine where the next 10 years will go. The
one thing that is certain is that air dominance
remains absolutely the most important thing.
/// End Act ///
Government officials in Malaysia, South Korea and
Japan have hinted that military spending in their
countries will rise. As it does, defense analysts say
a number of purchases will also take place in the
technology sector. They add governments will look for
new high-tech products that will quickly transmit
large amounts of data, provide good reconnaissance and
integrate different systems as seamlessly as possible.
(SIGNED)
NEB/AB/FC/KL
06-Mar-2000 07:13 AM EDT (06-Mar-2000 1213 UTC)
NNNN
Source: Voice of America
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