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  February 26, 2021 | International, Aerospace, Naval, Land, C4ISR, Security

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  September 17, 2018 | International, Aerospace

  Indonesia plans to buy C-130J Super Hercules, CH-47 Chinooks

  By: Mike Yeo MELBOURNE, Australia — Indonesia's defense minister has said the country intends to acquire new tactical airlifters and heavy-lift helicopters from the United States, as it continues its gradual drive to modernize its military. Speaking in the capital Jakarta earlier this week, Ryamizard Ryacudu said Indonesia is looking to acquire five Lockheed Martin C-130J Super Hercules transport aircraft and the Boeing CH-47 Chinook heavy-lift helicopter, according to the country's state-owned Antara News Agency. He did not specify the number of helicopters Indonesia is seeking, but Defense News understands from an Indonesian source the number of Chinooks will be between three and five. This expected procurement is likely to be just the first step in the southeast Asian archipelago nation's effort to recapitalize its airlift inventory. Earlier this year, the Indonesian Air Force's chief of staff, Air Marshal Yuyu Sutisna, was reported by Antara as saying that the service plans for all six of its airlift squadrons to have new aircraft by 2024, which currently operates a mix of light and medium transports alongside older variants of the C-130. Indonesia's current Hercules fleet consists of about a dozen "B" and "H" variants of the C-130 aircraft, the oldest of which date back to the early 1960s. The inventory has also been bolstered in recent years by the ongoing transfer of nine C-130Hs from Australia, which has retired the type from service in favor of the C-130J. However, this has been offset by the loss of five C-130s since 2000, including one of the former Australian aircraft, which crashed while landing in bad weather at one of Indonesia's remote eastern islands in December 2016, while the older aircraft have suffered from ongoing serviceability issues. This is not the first time Ryacudu has said Indonesia was seeking the C-130J. He first flagged the intention to do so back in May, following a meeting with U.S. Defense Secretary Jim Mattis in Hawaii. There have also been earlier reports that Indonesia was interested in acquiring Chinooks; however, this is the first time the defense minister has confirmed that it will go ahead with the acquisition. Antara also quoted him as saying Indonesia had evaluated the Russian Mi-26T2 heavy-lift helicopter, but found it unsuitable for the country's requirements. The Indonesian military currently does not operate any heavy-lift helicopters, and alongside its relatively small airlift fleet represents a key capability gap for a country made up of more than 17,000 islands that are also prone to natural disasters. Any Indonesian acquisition of the C-130J and CH-47 will likely be done through Foreign Military Sales channels. It is unclear if Indonesia has formally submitted a request to acquire the types, which must first be approved by the U.S. State Department. https://www.defensenews.com/air/2018/09/14/indonesia-plans-to-buy-c-130j-super-hercules-ch-47-chinooks

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  August 17, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

  Budget and pandemic present challenges to Russia’s defense industrial base

  By: Fenella McGerty The two Russian defense companies in this year's Top 100 list — air defense missile systems manufacturer Almaz-Antey and weapons developer Tactical Missiles Corporation JSC — have again fallen in rank. Almaz-Antey has fallen to 17th place from 8th and 15th in 2018 and 2019 respectively. Similarly, Tactical Missiles Corporation JSC has fallen to 35th place from 25th and 32nd in 2018 and 2019 respectively. The falling revenues of the companies this year reflect the difficult market conditions these enterprises are operating in as a result of the impact of COVID-19 on government budgets. Even before the pandemic and the consequent contraction in economic output emerged, the outlook for Russian defense spending was already subdued in light of persistently low oil prices in 2019. Domestic spending was further constrained this year as the oil price fell below $20 per barrel in April, with the projected average price for the year reaching just $40 per barrel. The International Monetary Fund forecasts a 6.6 percent contraction in Russia's real gross domestic product this year as lockdown measures to prevent the spread of COVID-19 subdued domestic and international economic activity, the latter further weakening global energy demand. The 4.1 percent growth projected for 2021 means the Russian economy will only return to pre-pandemic output in 2022. Last month, as part of wider measures to offset the bleaker fiscal setting, the Russian Ministry of Finance proposed a 5 percent reduction in financing for the state armament program over the next three years. Under the new plans, the 20 trillion rouble (U.S. $271 billion), 10-year military appropriations program (known as GPV 2027) that runs to 2027 covering defense procurement, repairs, research and development, and infrastructure investment will be reduced by a total of 225 billion roubles between 2021 and 2023. Wider defense funding could be reduced by as much 323 billion roubles. The previous state armament program (GPV 2020) saw significant increases enacted to defense investment between 2011 and 2016 as the country pursued ambitious modernization targets. As a proportion of GDP, the official Russian defense budget peaked in 2015 at 3.8 percent. If one includes wider defense spending items such as military pensions, social support and housing, total Russia expenditure accounted for as much at 4.8 percent of GDP that year. This period of significant defense investment helped to recover some lost ground from the previous two decades. Progress was remarkable but by no means comprehensive, with strategic nuclear forces and defense aerospace surpassing modernization targets, while maritime and land forces fared less well. Pockets of advanced capability — e.g., air defense, weapons, combat aircraft — evolved alongside less efficient entities that failed to deliver against the ambitions of GPV 2020. Nonetheless, as Russia approached the overarching target of 70 percent “modern” equipment within the armed forces inventory, defense spending increases slowed and the country moved from a period of dramatic capability buildup toward a sustainment phase — a move further presaged by wider economic constraints at the time As such, GPV 2027 is less ambitious than GPV 2020, and annual defense budget allocations have reflected this. Russian defense spending has been stagnant in real terms since 2017, as sanctions impacted government finances, energy revenues remained subdued and modernization ambitions were deemed close to fulfillment. Official projections of the budget for national defense saw slightly stronger growth in 2021 and 2022, although this was proposed in the months before the full economic ramifications of the pandemic were realized. Russian companies therefore face a tighter domestic market — as indeed will most countries in the wake of the pandemic — while the burden of debt has stifled investment in new technologies and R&D. This lack of funds to invest in research has created a further challenge for companies facing increasing political pressure domestically to diversify production efforts toward the civil market. The reported moves to restructure defense industry debt will ease some of the stress on companies and provide some temporary bandwidth with which to focus on investment. However, such moves will further constrain domestic defense spending, as funds to absolve debt will inevitably squeeze investment elsewhere in the budget. Perhaps on the positive side, the further weakening of the rouble against the dollar in 2020 has the potential to provide Russian defense equipment with an added price advantage in global defense markets and to facilitate exports. The comparatively cheaper kit will appeal to countries that find they have less investment funds at their disposal than a year ago. As competition in export markets intensifies and funding tightens, buyers may find they can demand greater industrial participation, partnership and technology transfer in moves to bolster self-sufficiency and resilience. Markets which have previously shown preference for Western equipment may find such capabilities are no longer affordable with Russia's relative willingness to offer favorable exchange rate agreements and flexible financing terms, offering a further advantage in constrained export markets. Fenella McGerty is a senior fellow for defense economics at the International Institute for Strategic Studies. https://www.defensenews.com/opinion/commentary/2020/08/17/budget-and-pandemic-present-challenges-to-russias-defense-industrial-base