Are the BRICS Putting Up a Defensive Wall?
The BRICS countries have been subject to a vast number of puns over the years – obviously including the title above. After the Brazil summit of the five emerging economies, the parallel with clay blocks seems reasonable, though. Messages recently emanating from BRICS leaders could be designed to convey the impression that their ambition to curb what they describe as “Western hegemony” and seek mechanisms to reduce developed countries’ influence should not be perceived as mere empty talk. But in what aspects could their cooperation bear fruit? In this article, a less discussed field of their relations will be briefly explored: defense, and mostly the defense industry, where issues of security, economy, trade and prestige meet.
Brazil, Russia, India, China, and South Africa are alike in that, wherever they are on their economic way as “emerging” markets and “developing” powers with a “strengthening” international voice, they are undergoing changes within their military and seeking an assertive role on the world’s military scene. All of them have seen their technology being upgraded and defense expenditures rising over the past years.
But do the BRICS pursue common interests in the military sphere? Or are they at least looking in the same direction? We will outline here some basic features which can be observed in each one’s defense sector. Far from being a thorough analysis, the text will consist by and large of an overview of defense spending and a summary of some latest developments within the military industry (especially regarding equipment) to see if the five countries have good enough basis to cooperate.
Brazil: A Regional Power Should Have Its Own Defense Industry (Military-Building at Home)
Brazil has kept setting aside a relatively steady percentage (1.5-1.6%) of GDP for defense spending over the past decade. Economic growth, hampered as it might be by the 2009 crisis, continues above 2% for that period according to World Bank estimates - which means military expenditure is also growing. Brazil has also planned to gradually boost it to 2.2 percent by 2030.
The USD 31.5 or 34.7 B (data by parallel projections) Brazil allocated to defense in 2013 places the country 12th and 10th respectively in world's Top 15 of military spenders. This makes it only the fourth-largest among the BRICS, but the numbers are strange enough given that it does not claim to be facing threats or any kind of challenges from powerful or populous neighbors, as Russia, China and India do. Unlike Russia, China or India, Brazil does not rank as a top importer or exporter of arms and does not have large per-capita strength of its military. Being a regional power, Brazil also seems to be rather both self-focused on military development and (as government plans say) poised to spend a certain part of its USD 241 B of the 2012-2017 framework precisely on modernization. This process will mostly benefit the protection of the country’s huge natural resources, but has also been envisaged to ensure security at the recent 2014 World Cup and the forthcoming 2016 Summer Olympics.
A relatively small part of the money (7.5 percent in 2012) is allocated to procurement of foreign defense technology which later enables domestic construction and might also lead to domestic development - and the aeronautical industry is a good example. Most of the armory in stock is either US or European, mostly German and French. Emancipation, however, underpins defense-deal policies, as the government has set out the condition that OEMs (original equipment manufacturers) that win procurement tenders transfer technology to local companies so that equipment itself is made in Brazil.
The active air force includes many French and US units, but Brazilian Embraer and Helibras have now produced most of the aircraft in stock; and will certainly continue to do so. Apart from obsolete US F-5 fighters dating back to the 1960s and 1970s and 12 French-made Mirage-2000 planes, 50 Brazilian-Italian AMX assault aircraft and nearly 1000 Super Tucano light attack, the country has long considered its combat capabilities (and equipment manufacturing capacities) as running below the potential displayed by the recent economic miracle. Now it will equip its air force with 36 JAS 39-NG Gripen fighters from Swedish manufacturer Saab. The deal worth USD 4.5 B was signed months after Brazil made clear it would reject a Russian offer among others from France and the US – just as it showed reluctance about a proposal by Russia that the two countries jointly develop a fifth-generation fighter. Saab is to have, on the other hand, limited participation in construction: on July 11 the specialized website Defense News quoted the company’s CEO Hakan Buskhe as announcing Brazilian firm Embraer would be in charge of "most of the development" of the Gripen F. In a similar fashion, while most of the 469 tanks in the Brazilian Army are either German or US-made, it does engage in their construction, apart from developing its own armored vehicles. In April 2013 Brasilia struck a deal to purchase 34 used German tanks which were to be delivered before the international sports events and also ahead of Pope Francis' visit in July that year. Brazilian firms, however, are commissioned most of the construction.
Brazil seems to be becoming more and more assertive as home to OEMs, as its aerospace concern Embraer S.A., one of the world's leading aircraft makers after Airbus and Boeing (though still trying to secure the third place from Canada's Bombardier), announced on May 20 it was on the verge of assembling its KC-390 military cargo plane in a new hangar at a ceremony attended by President Dilma Rousseff. Embraer is now also officially tipped to carry out a USD 3.3 B worth contract replacing Brazil's US-built Hercules cargo planes with 28 KC-390 over the next decade. Apart from fulfilling the needs of its armed forces, Brazil does not hide its interest in offering its defense product (or that of a company which the government formerly owned and in which still has a share). Embraer is thus gradually expanding its presence in the defense industry, with 20% of its 2014's sales expected to be of military units. The Wall Street Journal quoted Jackson Schneider, chief executive of Embraer Defesa e Seguranca, as saying that the company has intention letters to sell 32 KC-390 to countries like Chile, Argentina, Portugal and Colombia, but also others which he refused to name. Schneider also believes "few countries in the world can experience the pride of operating aircraft that were specified, developed and manufactured on their own soil."
Russia: A New Old Superstate and Top Arms Exporter?
Russia has the world's fifth-largest army of 1.04 million active troops and more than 2 million reserves. But the brief war Moscow fought in Georgia's Abkhazia and South Ossetia exposed long-standing issues of its military, which proved to be ill-trained and ill-equipped and not quite satisfactory in terms of reconnaissance and logistics. This triggered plans to carry out a large-scale modernization which were announced in late 2008 by former Russian Defense Minister Anatoly Serdyukov. Estimates made two years later saw its military possessing outdated hardware, as only 10 percent of it could meet modern standards. The Kremlin has now set aside substantial amounts of money to change that.
It is boosting the 2011-2020 arms budget by 46 percent, or to a total USD 620 B (it was USD 87.8/68.2 B in 2013, according to SIPRI/IISS, respectively). Such a target will not be difficult to match: a considerable increase in the military budget had already been observed in the early 2000s, when President Vladimir Putin came to power, with the USD 32.4 B set aside for defense in 2005 having jumped to USD 69.3 B in 2014 (and becoming the world’s third-largest military expenditure after US and China) and expected to grow to USD 93.9 B in 2016. If achieved, this would be a nearly threefold increase in slightly over a decade. '
Moscow does not hide its ambitions to outpace the US as the biggest exporter by 2020 and its working towards that goal, with arms deals on a global level amounting to 27% of the total in 2014, just two percent behind the United States. It sells arms valued at hundreds of millions of USD each year, with weaponry for other countries reaching USD 15.7 B in 2013 and topping USD 2 B just in Q1 of 2014. Alexander Fomin, the head of the Federal Service for Military-Technical Cooperation, was quoted as saying on Monday that the outstanding orders of the country were estimated at USD 47 B.
It is hard to dismiss Russia’s penchant for defending hard power as a basic principle in international relations: in 2014 the Ukraine crisis reminded of that feature, which is also discernible in the ongoing civil war in Syria, since Moscow has occasionally assisted its allies in Damascus in clinging to power. In its communications with the world, the country displays readiness to stand up for its own (and other countries') independence from Western pressure as well. That notwithstanding, it knows the Cold War has been long over and commercial relations with “the West” are thriving in the military sector. Apart from German equipment, Moscow has also lately purchased French one, with a recent controversially perceived deal on two Mistral-class assault ships dividing opinions amid the Ukraine crisis.
Nor does the Kremlin refrain from trade with the US, as a canceled 2013 deal shows: in a move experts had previously described as unthinkable, Washington was on the brink of buying 15 Mi-17 helicopters (they would have been added to another thirty delivered by Russian company Rosoboronexport under a previous contract) at a time when the White House was vehemently accusing Russia of supplying the Syrian regime with weapons that the regime used against its people.
Russia’s main arms export partners are two BRICS countries, China and India, with the latter accounting for about a third of all the military equipment sold by Russian companies. Both are still dependent on their weapons, though they are also seeking to boost their own industries and achieve self-sufficiency. They look at trade in arms with Russia as mostly business rather than cooperation, and Moscow is a useful partner until they manage to emancipate themselves.
India: Ambitions Match Demographic and Economic Weight
With its global eighth place in terms of military spending, India has topped the list of the world's largest arms buyers since 2010, when it outpaced China. It allocated over USD 47.4 (or 36.3) B to the sector in 2013, a sum exceeding 2 percent of its GDP for that year (albeit constituting a considerably lower share of the economy than in previous decades). India perceives security as a key priority, since it has territorial disputes with five neighboring countries, including claims to China and multiple wars and military conflicts with Pakistan in the past few decades. Threats, and also military rivalry with China and Pakistan, could have been among the factors underpinning the decision to bolster defense expenditure by 12% for the fiscal period leading into 2015 compared to the previous one.
Russia plays quite a significant role in weapons deliveries to the country, with USD 4.78 B worth of arms and equipment sold to Delhi in 2013 alone. The data suggests Russian-based imports to India leapfrogged about 50% compared to 2012, when they were at USD 3 B. In that year, bilateral trade saw a historic event, as India received from Russia the second nuclear-powered submarine ever exported by any country.
But as the Financial Times wrote in February, India is now also the United States' biggest customer. The paper has described India as 'the most enthusiastic buyer" of US-made equipment, with expensive Boeing C-17A strategic transport aircraft and P-8I Maritime Patrol Aircraft helping it to replace Saudi Arabia as Washington's most precious client. Just between 2009 and 2013, American imports rose from USD 237 M to USD 1.9 B. The paper quotes IHS Jane's Defense Weekly magazine’s expert Ben Moores as arguing India needs American technology to address its "big capability gap" with the Chinese. The world’s second biggest country certainly has a lot to catch up: while it has been able to develop land forces' weapons and equipment on its own (even though a vast part remains from the Soviet-Union era), the inventory of its navy and air force is either Soviet (and outdated) or mostly European, with the clear exception of predominantly Israeli-made drones. Delhi will therefore place a major emphasis on its bid to finally produce its own fighter jet, a move which, if successful, could jeopardize Russia's long-standing presence on the Indian arms market. The New York Times estimated, as of March this year, that the world's second most populated nation had commissioned equipment worth USD 39 B to Russia at that moment. The paper also quoted former Indian Defense Minister A. K. Antony (in office at the time when the article was written) as declaring at a defense industry conference in the country that reliance on foreign imports must come to an end: "A growing India still depending on foreign companies for a substantial part of our defense needs is not a happy situation."
While some argue what impedes equipment improvement through joint projects with foreign companies are mostly quality issues, others blame the government's decision not to allow a company from another country to own more than 49% of a factory (until earlier in July, the cap was officially even lower - at 26%, and Finance and Defense Minister Arun Jaitley raised it in an attempt to provide incentives in the sector).
Easing of restrictions to foreign investors has become possible after Prime Minister Narendra Modi assumed office earlier this year. The recently-appointed Modi, on the other hand, has firmly spoken of his ambitions to enhance India's role as a global military power, and as a global nuclear one as well. Modi also deems it vital to wipe out bureaucratic hindrances, corruption in public procurement and obstacles created by state-owned OEMs preventing the sector from further investment-driven development.
A deal with France worth USD 15 to 20 B, through which India is to acquire 126 Dassault Rafale fighters, but which had been in the making for years before commitment to it was restated in end-June, was going at a sluggish pace mostly due to India's manufacturing requirements, including recently lifted obligation of companies to carry out at least one-third of their manufacturing within the country, a need many OEMs believe pose a challenge, as doubts raise about production efficiency.
China: Should the World’s Future ‘Most Important’ State Have the Strongest Army?
India's military spending lags far behind China's, as the funds Beijing spent on defense last year was three times that of its neighbor.
With some USD 188 B (SIPRI) or USD 122 B (IISS) worth of military expenditure in 2013, China is by far the second-largest spender - outpaced by the US (USD 640/600.4 B, respectively), but with other countries lagging behind by tens of millions. The amount is just 1.4 percent of the Chinese GDP (also the world's second-largest), but the numbers hide the underpinning trend of China to develop technologies - for both "domestic" use and exports on the world market. Even before the country engaged in the renewal of a number of old territorial disputes with neighbors such as Japan and Vietnam, it showed assertiveness at the 2012 Chinese People's Political Consultative Conference, or the National People's Congress annual legislative meeting, in Beijing. The outgoing leadership then claimed China was on the road to becoming Asia's biggest naval power.
In terms of arms and equipment development, China is undoubtedly working toward that goal, since it has been constantly improving production capabilities. Over the past years, fighter jets, drones and sophisticated military machines were placed onto the Chinese weapons pipeline, where previously small arms had been the main items. This led to a surge in exports, which were boosted by 162 percent between 2008 and 2012 if compared with the five years before that. This helped the country to jump two places (3th, from 5th) up in the list of largest sellers of weapons within the same period (it was even fourth according to SIPRI data).
But it's noteworthy that China was also the second importer between 2008 and 2012, after holding the first place (before India takes over as number one) for the previous five-year period. Even more interestingly, “number three”, which is Pakistan, is China’s biggest customer, with technology such as combat aircraft, submarines, frigates and battle tanks. It even co-developed and co-produced 50 JF-17 aircraft with China, in which other countries in the region subsequently showed interest. Pakistan needs huge amounts of military equipment to withstand the perceived threat from India, and given this its common interests with China are not surprising.
Forging its image as a weapons seller, China always promotes its principle that trade is favoured by the policy of non-interference in other countries' domestic affairs. "Whoever is in the government, whoever has diplomatic status with us, we can talk about arms sales with them,” Xu Guangyu, a retired major general in the People’s Liberation Army, was quoted by the New York Times as saying in 2013.
Pricing turns out to be another key factor; a Chinese defense company named China Precision Machinery Export-Import Corporation surprisingly managed to sell an HQ-9 long-range missile system to Turkey beating traditional partners of Ankara like Raytheon Co, which had deployed a Patriot system commissioned by NATO in 2012. Some experts said the USD 4 B contract played its part.
The country also aims to enhance its role in the global drone production, hoping to become the world's most important drone manufacturer in less than a decade, with its industry expected to grow from USD 942 M this year to USD 2.3 B in 2023.
South Africa: Seeking Identity
South Africa's military expenditures were just USD 4.1 B according to SIPRI data, or 1.2 percent of GDP, with both nominal value and share dropping over the past few years. The leading African nation (though "ousted" from the first place by Nigeria in nominal terms, it is still considered to be the most developed one) uses its military mostly in joint operations with police to fight cross-border crime or block internal smuggling routes. Pretoria is also seeking to train excellent peacekeeping forces, while at the same time counting mostly on diplomatic means to ensure regional and continental security. President Jacob Zuma has previously pushed to boost his country's role in crisis response by offering the creation of an African intervention force, the African Capacity for Immediate Response to Crisis.
In other words, unlike other BRICS countries South Africa does not seem to be currently expanding the role and stature of its military to emphasize its place as a regional power through rearmament. Nor does the country undergo a large-scale expansion of its defense industry despite its previous efforts to do so. Alongside other politicians, former South African President Thabo Mbeki was embroiled in a scandal over controversial arms deals amounting to just USD 4.3 B in fourteen years which included aircraft, warships, helicopters and submarines. Their total value neared a year's military spending. The total order eventually stood at even more - about USD 7.6 B - and this is not hard to explain, as it included 3 U209 submarines, 4 MEKO A200 light frigates, 30 AW109 light helicopters, and 26 JAS-39C/D Gripen fighters were on the shopping cart under the 1999 Strategic Defense Procurement Process. On that occasion, the Defense Industry Daily wrote years later that "buying shiny toys but not having the maintenance training, or qualified people to operate them", a "regular occurrence in Africa", could also be observed here. The country's military is now facing numerous problems including collapsing infrastructure, shortage of ammunition, lack of experienced staff and far-reaching bureaucracy.
South Africa nevertheless offers a relatively unexplored arms market as well. Many were surprised by US giant Boeing's decision to work together with the Paramount Group of South Africa, the largest private defense and aerospace company of its nation which Defense News ranks far below the global Top 100.
Could Military Puzzle Pieces of BRICS Countries Fit Tight?
BRICS countries do have joint projects, and they are not just limited to this week's huge development bank. A recent example came in mid-May, during a meeting of Russian President Vladimir Putin and Chinese counterpart Xi Jingping resulting in the signing of a number of bilateral documents, including the joint construction of a long-haul wide-body aircraft between the two countries. The Russian daily Kommersant then argued the main aim of Beijing was to build "at least" 1000 jets as part of the bilateral project which might grow into a joint venture providing the conditions to compete "full-scale" against European and US giants. Two months later, hours before this week's summit in Fortaleza, Brazilian President Dilma Rousseff also expressed interest in Russian equipment, more precisely in acquiring “air defences from Moscow”.
Common positions are also likely among the BRICS; nobody was surprised, for instance, when they took Russia's side in the Ukrainian crisis. To be more precise, however, they were rather inclined to support President Vladimir Putin against his prospective international isolation than to recognize Crimea's right to break away from Ukraine - especially China does not seem to have the slightest intention, given its 150-million-strong Uighur minority it the north-west or its cautiousness about Tibet, which could wish to split just as Crimea did. There was an even more unmistakable image of the BRICS pulling together as a team and it was conveyed last year, when a meeting following the alleged chemical attack in Syria (and the alleged peacekeeping effort by Russia) delivered a somehow alarming message:
“No military or political cooperation was envisaged before the Syrian situation but it cannot be ruled out now," as Vyacheslav Nikonov, who chairs Russia's National Committee for BRICS Studies, was quoted by The BRICSPost as saying.
Even though Nikonov warned joint decision-making was a challenge in relations among the five countries, he did not hesitate to echo other members of the Committee's statements that a political role for the BRICS was "inevitable". Moreover, even if no "bloc"-like political rapprochement has been observed ten months later, following the developments in Ukraine, plans announced by Vladimir Putin to turn economically to non-Western partners – and most recently the deals with China in mid-May, including a historic gas supply deal – are undoubtedly a step in the direction of cooperation.
But as regards the short review which is now coming to an end, the “emerging five” tend to substantially differ in their defense interests. There is no single precise threat that could unite them apart from the vague term “Western hegemony”, which becomes more and more devoid of sense as the world is indeed becoming more and more multi-polar and phrases like “US dominance” are more a matter of propaganda for the public.
Emerging powers do not have real incentives to deepen integration in defense industries and boost arms trade, for instance; all of them want to develop their own technologies. Especially those with rising population and expanding economies would like to make sure they would protect the best their interests and would not count on foreign equipment (and know-how), but would rather be self-sufficient. It is hard to imagine how Brazil, aspiring to be a South American leader, would team up with Russia or China, which want a strong presence on markets there. India, striving to be more and more productive in terms of OEMs, would one day prompt the outrage of the dominant trade partner it counts on in the face of Moscow. Ambitious China, displaying the potential to generate more and more added value through its products, infuriates both Russia and India, with its growing army, its competitiveness and strategic alliance with Pakistan (especially unnerving for Delhi).
The BRICS might indeed be looking as though they were building a wall to provide more space for their thriving (at least some of them are) economies; but actually they would cling to their weapons rather to defend their interests and boost their trade than to stand together, when there is so much that could make them drift apart.
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