Tsai will strengthen Taiwan's defence capabilities

Subject Taiwan's defence policy. Significance Taiwan's new president, Tsai Ing-wen, has signalled a major shift in national defence policy. She aims to boost the overall defence budget to 3% of GDP (from 2% currently) and strengthen the domestic arms industry. Tsai hails from the Democratic Progressive Party (DPP), which traditionally favours permanent de jure independence from mainland China. Impacts Tsai will tread carefully on sensitive sovereignty issues, trying to avoid provoking China even while raising defence spending. Chinese pressure will constrain Taiwan's ability to secure investment and cooperation on defence projects (except from the United States). Washington will press Taiwan for higher defence budgets and offer access to advanced technologies and weapons. The military balance in the Taiwan Strait will shift further in China's favour. Taiwan will find more support in Washington and Tokyo for inclusion in regional defence architecture.

Subject Shortcomings of Argentina's defence policy. Significance On November 15, the submarine ARA San Juan suffered an internal explosion, presumably caused by water leaking into its battery propulsion system. There were 44 naval personnel on board the vessel, which has yet to be found. ‘Accidents’ in Argentina often involve corruption, political clientelism and incompetence. Although it is early to rush to judgement in this case, blame is likely to be shared among politicians managing the defence sector, the military hierarchy and defence sector factories. A political earthquake may follow. Impacts Absent a merit-based civil service, weakened state bureaucracies will be incapable of resolving multiple demands for public goods. The accident will prompt a shake-up of the armed forces high command but no real defence reform. The annual defence budget of some 5 billion dollars could prove sufficient, if spent effectively.


Subject China's military spending. Significance Two decades of almost double-digit growth in China’s defence budget has transformed the People’s Liberation Army (PLA) into a force with world-class capabilities in some areas. Strengths in ‘asymmetric’ weaponry, such as ballistic and cruise missiles, air defence, electronic warfare and cyber capabilities, have eroded the ability of the United States to operate securely in the region. Impacts The lack of transparency in China’s defence expenditure will unnerve its neighbours in Asia. China’s defence industry is capturing greater efficiency and cost-effectiveness by increasing private sector involvement. Restructuring the military into a modern force capable of joint operations is resource-intensive and will take decades to complete.


Subject Russia's Armata tank programme. Significance Russia's military is currently undergoing a 700 billion dollar rearmament programme, with Moscow aiming to supply the military with 70% modern equipment by 2020. The reform plan is looking to upgrade Russia's armoured formations with a new family of vehicles collectively called Armata. The Armata tank variant will be far superior to any tank operating in Russia's neighbours as well as many NATO armies. However, it is costly and the Defence Ministry is actively trying to force down the price. Impacts Defence spending has been largely protected from 10% spending cuts but budgetary pressures will remain. It will take time to bring defence and procurement spending in many NATO members up from current low levels below 2% of GDP. The Ukraine crisis will force Russia's defence industry to produce weaponry domestically with less reliance on foreign supplies.


Subject The outlook for Taiwan under the new administration. Significance Tsai Ing-wen, leader of the Democratic Progressive Party (DPP), was sworn in on May 20 as Taiwan's first female president and only its second leader not from the Kuomintang party, which has governed the island for all but eight years since 1945. In her inaugural address, Tsai outlined a five-point plan focused on reviving a stagnant economy, increasing social services for a rapidly aging population, and moving the export-driven economy away from a reliance on mainland China, Taiwan's largest market. Impacts Restructuring the economy will take time, and public pressure will build if global demand for exports does not rise quickly. Taiwan's bids to join regional trade blocs will meet resistance from China, which will press other countries to block it. Initiatives on judicial reform and 'truth and reconciliation' that discredit the Kuomintang will make domestic politics more acrimonious.


Significance Tensions between the Gulf states and Iran have escalated significantly in 2016, in the wake of Iran's signing of a landmark deal in 2015 that brought to an end the decade-long dispute over its nuclear programme. The response of Iran's military to the heightened tensions will be partly influenced by the new chairman of the Armed Forces General Staff (AFGS), the country's top military body, Major General Mohamad Hossein Bagheri. Impacts A more assertive and non-compromising IRGC will increase pressure on President Hassan Rouhani as he seeks re-election in 2017. Improvements in intelligence collection and dissemination are likely in Syria, aimed at reducing Iranian casualties. The military and government are likely to clash soon over the defence budget and its allocation. The government will try to keep the IRGC in check by tipping the media off about alleged financial wrongdoings. With the next US president expected to adopt a harder-line stance on Iran, the diplomatic rapprochement may be reversed partially.


Subject Palace politics Significance Military courts earlier this month handed down the most severe sentences thus far in lese majeste cases, sentencing two people to 30 and 28 years in prison for criticising the monarchy on Facebook. The sentence, which has drawn sharp criticism from the United States and the UN, reflects a broader trend of tighter political and legal controls by the military in the context of the monarch's declining health. Impacts Domestic consumption will suffer as long as political uncertainty regarding the return of civilian rule persists. The palace has become more partisan since 2006; this is likely to continue after the royal transition. Lese majeste prosecutions will damage US-Thai relations, but Washington will not expand sanctions.


Significance The military coup, which began on September 16, has dealt a major blow towards restoring constitutional order. The 'soft coup' ousting last year of former President Blaise Compaore was on the back of a popular insurrection. This new coup represents a grab for power by old regime members. Presidential and legislative elections due on October 11 are unlikely to take place as scheduled. Impacts Prolonged unrest in Burkina will jeopardise the ability of France and the United States to use the country as a counterterrorism base. Compaore's possible role in the coup, from his current base in Ivory Coast, could embarrass the Ivorian president's own re-election bid. If the crisis persists, Burkina's steady economic performance will be imperilled from suspensions in donor support.


Subject Swedish and Finnish defence policy. Significance Sweden and Finland have intensified defence cooperation in recent years, most recently by signing a defence pact on July 9. This comes on top of other efforts to promote stronger Nordic defence collaboration with neighbouring Denmark and Norway, the Baltic states, as well as with the United States and NATO around regional security issues. Impacts Russia is likely to use airspace violations to test Swedish and Finnish military readiness. While Sweden and Finland will deepen collaboration with NATO, membership remains off the table for the foreseeable future. Finland supports stronger EU defence initiatives such as PESCO. Sweden has traditionally been sceptical of EU efforts but has adopted a more positive view over the past two years.


Subject The Pentagon's recent Missile Defense Review. Significance President Donald Trump this month unveiled the first major review of US missile defence policy since 2010. Trump and his vice president have become staunch missile defence advocates, championing expansion in conjunction and coordination with efforts to create a Space Force. The ambitious effort outlined in the Pentagon’s Missile Defense Review this month would take the current, regionally focused missile defence programme and expand it so that it can, according to Trump, protect US nationals from missile attack, "anywhere, anytime, anyplace". Impacts US advances in defensive capabilities will trigger technological escalation as China and Russia move to improve offensive capabilities. Washington likely cannot afford to keep pace with potential adversaries' offensive capabilities because defensive capabilities cost more. If the United States overtly ‘weaponises’ space, other countries will follow. The demise of the Intermediate-Range Nuclear Forces treaty will bring a whole class of destabilising missiles back into the equation.


Subject Future EU defence integration. Significance The Permanent Structured Cooperation (PESCO) and the European Defence Fund (EDF) have become key pillars of EU defence policy, but divergence between member states is increasingly making defence integration slow and limited. In addition, opposition towards third-party participation and arms exports, and uncertainty about the future EU-UK security relationship, threaten to diminish the capabilities of future EU defence projects. Impacts London’s exclusion from the EU’s Galileo project suggests Brussels does not want close UK collaboration in future EU initiatives. The EU will likely prioritise steps to enhance European defence industry integration in order to reduce duplication and overspending. National-level defence spending could stall over the coming years as a result of slowing economic growth across the euro-area.


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