- The plan by Australia, the UK and US (AUKUS) to provide the Royal Australian Navy (RAN) with nuclear-powered submarines from the early 2030s entails significant financial, operational, technical and industrial challenges.
- It has also elicited both negative and positive reactions from regional states. Southeast Asian responses to the AUKUS announcement have been mixed and essentially unchanged since 2021.
- The Philippines, Singapore and Vietnam appear to tacitly support, or at least understand the motivations behind, AUKUS. Malaysia and Indonesia have been more critical and have reiterated their concerns about arms racing, regional stability and nuclear non-proliferation.
- The various concerns about AUKUS can probably be mitigated. Australia has pledged to adhere to its nuclear non-proliferation commitments and implement safeguards. AUKUS will not ‘trigger’ an arms race because it is a reaction to China’s rapid military modernisation and build-up of military capabilities.
* Ian Storey and William Choong are Senior Fellows in the Regional Strategic and Political Studies Programme at the ISEAS – Yusof Ishak Institute. Ian is the co-editor of Contemporary Southeast Asia and William is the editor of Fulcrum.
ISEAS Perspective 2023/23, 29 March 2023
On 13 March 2023, US President Joe Biden, Australian Prime Minister Anthony Albanese and British Prime Minister Rishi Sunak met in San Diego, California to announce a timetable to provide the Royal Australian Navy (RAN) with eight to 12 nuclear-powered attack submarines over the next three decades.
Since the AUKUS (Australia-United Kingdom-United States) initiative was first announced on 15 September 2021, it has generated considerable controversy, debate and speculation. Canberra’s cancellation of a US$90 billion contract for 12 French-designed Barracuda-class conventionally-powered attack submarines caused a rift, albeit a temporary one, in the three countries’ relations with Paris. Defence analysts in Australia and elsewhere questioned whether the country would be able to fund, build and operate the complex naval vessels in a relatively short period of time. Observers also weighed the pros and cons for regional security dynamics and the impact AUKUS would have on Canberra’s already strained relations with Beijing.
While China reacted negatively to AUKUS, Southeast Asian responses were mixed and more nuanced. Malaysia and Indonesia expressed concern that AUKUS might fuel regional arms racing, undermine nuclear non-proliferation regimes and contravene key ASEAN security initiatives such as the Zone of Peace, Freedom and Neutrality (ZOPFAN) and the Southeast Asia Nuclear Weapon-Free Zone (SEANWFZ). Other countries, including Singapore, the Philippines and Vietnam, were generally more sanguine about AUKUS, and expressed understanding for Canberra’s decision. Following the March 2023 announcement, their respective positions remained essentially unchanged, though there were changes in tone and emphasis.
The purpose of this Perspective is twofold. First, it provides a brief analysis of the motivations for AUKUS and the challenges facing the initiative. Second, it examines regional responses to the March announcement, identifies changes in approach and assesses the validity of concerns raised by some countries.
AUKUS: RATIONALES, TIMETABLE AND CHALLENGES
In San Diego, the AUKUS partners reiterated that the principal rationale for the initiative is to promote the ‘Free and Open Pacific’ concept, and to deter and defend against challenges to the international order, primarily posed by China. A secondary rationale is to modernise and connect America’s alliances in the Atlantic and Pacific. A third reason is to help Australia defend its maritime trade routes.
Canberra’s original decision to cancel the Barracuda-class submarines was based on a strategic assessment that China’s rapid military modernisation, and assertive actions in the South China Sea and Taiwan Strait, had significantly altered regional security dynamics. To better prepare Australia for a more contested security environment, the government decided the RAN needed to operate nuclear-powered submarines rather than conventionally-powered ones because they offered advantages in stealth, speed and endurance. In the 18 months since the original announcement, those assessments have not changed, and have only been reinforced by China’s coercive policy in the South China Sea and against Taiwan.
To achieve the goal of providing Australia with nuclear-powered boats, the AUKUS partners laid out a multi-decade three phase timetable. In Phase 1, from 2023 onwards, US and UK submarines will increase port visits to Australia, while RAN personnel will embed on board American and British submarines, and civilians will train at the two countries’ submarine industrial facilities. Phase 2 envisages Australia acquiring three to five US-built Virginia-class submarines beginning in the early 2030s. In Phase 3, from the late 2030s, Australia will begin construction of eight AUKUS-class submarines which will be based on a UK-design but which will incorporate advanced US technology. The RAN will commission its first AUKUS submarine in the early 2040s.
Realising this ambitious plan entails considerable financial, operational, technical and industrial challenges never before faced by Australia. The programme will require approval from the US Congress to sell the submarines to Australia and transfer sensitive technology to the UK and Australia. The whole-of-life cost of the programme has been estimated at US$180 billion to US$250 billion, but will inevitably be revised upwards as production schedules slip and technical problems arise. In just ten years, Australia will have to train hundreds of naval and civilian personnel to operate and maintain the Virginia-class submarines. By the late 2030s, Australia will have had to develop the industrial capacity to build eight AUKUS-class boats in Adelaide.
As proponents and detractors of AUKUS debated these challenges, China and Russia repeated their strong opposition to the trilateral initiative. Both countries accused the three countries of trying to ‘contain’ and ‘encircle’ them by extending the NATO alliance into the Indo-Pacific, fuelling arms racing in the region and undermining the Nuclear Non-Proliferation Treaty (NPT) and International Atomic Energy Agency (IAEA) safeguards. Southeast Asian responses have been more measured and nuanced, but have echoed some of Beijing’s and Moscow’s concerns. The following section examines the positions of the key regional maritime states.
Among Southeast Asian countries, the responses to the first AUKUS announcement in September 2021 were varied. The Philippine national security establishment welcomed the trilateral arrangement, while Singapore and Vietnam were implicitly supportive. Malaysia and Indonesia, however, warned of the risks of nuclear proliferation, arms racing and the risk of AUKUS provoking aggressive actions by some countries. Southeast Asian responses to the AUKUS update of March 2023 evinced growing acceptance of the need for the nuclear power technology sharing arrangement: the Philippines remained supportive and Vietnam maintained its accommodative position. There was no statement from Singapore, suggesting that the country’s position remains unchanged. Malaysia and Indonesia tamped down their opposition to the deal, while at the same time indicating their acceptance of the strategic rationale for the arrangement and the concurrent need to support regional peace and stability.
The Philippines’ Department of Foreign Affairs’ (DFA) response to AUKUS on 16 March was more measured than then Foreign Secretary Teddy Locsin’s 2021 statement, but still generally positive. The DFA stated that the Philippines appreciated the efforts made by the AUKUS parties to keep them updated on the developments, and noted the “assurances made at the highest levels that AUKUS will contribute to the preservation of regional peace and stability”. The DFA said that Indo-Pacific partnerships or arrangements such as AUKUS should “support our pursuit of deeper regional cooperation and sustained economic vitality and resilience” and should uphold ASEAN centrality and reinforce a rules-based international order. However, the DFA urged the AUKUS parties to cooperate with the IAEA to ensure that their activities met the “relevant international nuclear safeguards and non-proliferation standards”.
Manila’s supportive position is not surprising: the country has seen repeated instances of Chinese coercion in the South China Sea. It has also offered new access locations to the US military, which would facilitate American force projection in the event of a military contingency in the Taiwan Strait. This means the Philippines would almost certainly be drawn into the fray given its alliance with America and geographical proximity to Taiwan. While AUKUS is unlikely to deter China from doubling down on its assertive policy in the South China Sea, it might help deter Beijing from taking military action against Taiwan.
Vietnam’s reaction to the San Diego statement was consistent with its response to the 2021 announcement. On 17 March, the Foreign Ministry stated that all countries should contribute towards “peace, stability, cooperation and development in the region and the world” and that nuclear energy should be used for peaceful purposes and must ensure the safety of humans and the environment. In view of its territorial and jurisdictional disputes with China in the South China Sea, and increasingly closer defence ties with the United States, Vietnam’s mild statement may be interpreted as a tacit endorsement of AUKUS.
Singapore’s position on AUKUS, if unchanged from 2021, underscores its support for America’s military presence in the region which the country views as vital to maintaining the balance of power. In the view of the island state, this balance should not swing either to China or the US; in this sense, AUKUS and the capabilities it brings could be seen as restoring an equilibrium in the balance.
Malaysia and Indonesia
In its statement of 14 March 2023, Malaysia expressed the same concerns as in 2021 (about arms races and proliferation risks), though there was a marked change in tone. Malaysia said it appreciated the “readiness on the part of the three [AUKUS] countries” in engaging with Kuala Lumpur at “various levels” and sharing the latest updates and future projections for AUKUS prior to the announcement. It acknowledged the “need of countries in terms of enhancing defence capabilities taking into account respective requirements and concerns”. Nonetheless, Malaysia reiterated its demand that AUKUS should “fully respect and comply” with Malaysia’s policy on the operation of nuclear-powered submarines in its waters, as well as the United Nations Convention on the Law of the Sea (UNCLOS), ZOPFAN and SEANWFZ. Malaysia stressed the importance of “transparency and confidence building among all countries”, and called on them to refrain from any “provocation” that could trigger an arms race or affect regional peace and security.
Indonesia’s reaction following the March 2023 AUKUS announcement was also more nuanced than its 2021 statement and may be interpreted as being more accommodating. The Foreign Ministry said it had been “closely following” the AUKUS partnership, in particular, the pathway to achieving “critical capability”. The ministry added that it is critical that all countries maintain peace and stability in the region. Jakarta said it expected Australia to remain “consistent in fulfilling” its NPT and IAEA obligations, and also to ensure that it develops a “verification mechanism” that is “effective, transparent and non-discriminatory”. It is worth noting here that the concerns raised in 2021 — about arms racing and power projection — were not mentioned this time.
Malaysia and Indonesia’s emphasis on the need for AUKUS to support regional peace and stability mirrors Singapore’s expressed position in 2021, calling for the trilateral deal to contribute constructively to peace and security in the region. It appears that persistent diplomacy by AUKUS countries, particularly Australia, to explain the trilateral deal to Southeast Asian countries has softened the ground. Australia, for example, made 60 calls in March to leaders in Southeast Asia and the Pacific to discuss the agreement. In March, Australia’s chief of navy was in Singapore and Indonesia to address concerns about AUKUS. The latest responses by Kuala Lumpur and Jakarta suggests a growing cognizance of the need for a regional balance of power and a need to respond to China’s growing defence capabilities and assertiveness.
ASSESSING REGIONAL RESPONSES
The concerns raised by Southeast Asian countries can be categorised into three groups: fears about interference by external powers and nuclear proliferation; concerns about arms racing and aggressive actions by major powers; and the use of Indonesia’s archipelagic sea lanes in the event of a future conflict (say, in the Taiwan Strait).
Interference by Extra-ASEAN Powers and Proliferation Risks
Malaysia’s reiteration of the need for ZOPFAN and SEANWFZ underscores its desire for a region free from the influence of external powers and a deep-seated resistance to the presence of nuclear weapons in the region. As noted by the authors in 2021, ZOPFAN is a dead letter while SEANWFZ is not an instrument that Australian can sign (it is only open to accession by the five recognised nuclear-weapon states, but none of them has signed it).
Indonesia has called on Australia to adhere to its NPT and IAEA obligations, but this appears to be more hortatory in nature rather than belying any real suspicion that Australia would cross the nuclear threshold. Australia has an “exemplary” record in non-proliferation. It signed the NPT in 1973 and implemented enhanced NPT safeguards under the Additional Protocol in 1997. It is a founding member of the IAEA. It is true that from Canberra’s perspective, its strategic environment has deteriorated; still, it does not feel the need to even broach the idea of going nuclear (which is the case for Japan, which now has a domestic debate about whether nuclear weapons outside the US extended deterrence umbrella are feasible).
A more serious concern is the risk of non-nuclear weapons states using the cover of acquiring nuclear-powered submarines as a covert route to nuclear weapons. In an opinion editorial, the Jakarta Post argued that Canberra’s assurances about abiding by the NPT aside, there is no guarantee that “other countries will not follow suit”. The point echoes an argument made by James Acton that countries can use Australia’s precedent as a non-nuclear weapon state as a cover to develop nuclear weapons. The issue, however, remains largely hypothetical. Firstly, Australia has taken practical steps to ensure compliance with the NPT and adhere to IAEA safeguards. Australia has asked the IAEA to start talks on arrangements required under Article 14 of its Comprehensive Safeguard Agreement. Under the agreement, the IAEA has the right and obligation to apply safeguards to the use of nuclear material in Australia or carried out under its control anywhere. Secondly, if other non-nuclear states such as Iran were to take the aforementioned “covert route” to nuclear weapons, it would be detected by the non-proliferation regime and acted upon.
On the issue of arms racing, it is worth noting that only Malaysia has broached the issue following the March 2023 announcement by the AUKUS countries. Malaysia’s position mirrors concerns voiced by China after the announcement was made. Again, however, it is worth noting that Malaysia’s position has shifted from stating that AUKUS is a “catalyst” for arms races, to a stance where it urges all countries to refrain from provocations that would “potentially trigger an arms race”.
As argued by the authors previously, concerns about AUKUS sparking an arms race fail to distinguish between cause and effect. It is a shared view that China’s military build-up in the region has precipitated security concerns by other states. In its March 2023 update of the 2021 Integrated Review of defence and foreign policy, the UK underscored the need to “shape” the UK’s strategic environment with like-minded partners all over the world, given that China poses an “epoch-defining challenge” to the international order (the phrase was used four times in the 59-page document). Japan’s December 2022 National Security Strategy struck the same tone, noting that China’s rapid enhancement of military power, attempts to change the status quo in the East and South China Seas, and augmented partnership with Russia challenged the international order.
Currently, there is little or no evidence of arms racing in the Indo-Pacific, as seen in previous episodes such as the Britain and Germany at the turn of the twentieth century or the US and the Soviet Union in the 1950s and 1960s. As Tim Huxley argues, China is a “long way” from competing with the US in terms of military effort; moreover, no other regional states comes close to competing with China. In 2018, China’s defence spending stood at US$151.5 billion against America’s US$602.8 billion; corresponding figures for 2021 stood at US$207.3 billion and US$754 billion respectively. Moreover, Southeast Asian countries’ defence spending as a proportion of GDP have remained largely stable, and have tracked relatively rapid economic growth. Evinced fears by Malaysia and Indonesia about arms racing stem more from concerns about a potential (rather than extant) arms race in Northeast Asia that could spill over into Southeast Asia. If such an arms race does occur in Northeast Asia, Southeast Asia is “best obliged” to come up with a “predictable, standard response” (either enhancing self-reliance or seeking external partners). Even on the former, Southeast Asian countries would “fall short” of attaining even asymmetrical means such as anti-submarine systems.
Fears about eight to 12 AUKUS submarines sparking an arms race are also misplaced when compared to China’s rapid acceleration in its defence spending and increase in the PLA’s capabilities. The collective tonnage of warships launched by China between 2014 and 2018 was 678,000 tonnes －larger than the aggregate tonnages of the navies of France and Spain combined. The PLA-Navy currently operates six nuclear-powered attack submarines, six nuclear-powered ballistic missile submarines and 44 diesel-powered/air-independent powered attack submarines. It would likely maintain between 65 to 70 submarines through the 2020s — years before the first AUKUS submarine becomes operational. Overall, China’s defence budget for FY2022 increased 7 per cent over the previous year. The nominal size of China’s defence budget is about 2.2-fold bigger than the corresponding figure 10 years earlier.
Closure of Indonesian Archipelagic Sea Lanes
There is also the question as to whether Indonesia might close off its archipelagic sea lanes to AUKUS submarines. Such access will be vital for AUKUS boats. A retired two-star army general and member of Indonesia’s parliamentary committee overseeing foreign affairs, defence and intelligence said that Indonesia’s “standpoint is clear that [our country’s archipelagic sea lanes] cannot be used for activities related to war or preparation of war or non-peaceful activities”. This would constitute a concern for the three AUKUS countries. If AUKUS submarines are prevented from entering Indonesian archipelagic waters and thereafter into say, the Taiwan Strait during a military contingency, there could be a loss in stability that could affect the region as a whole.
Officials from the AUKUS countries, however, are confident that their submarines will continue to operate, closure or not. Firstly, according to UNCLOS (to which Indonesia is a party), all ships, including submarines, are allowed to navigate through archipelagic waters under the right of “archipelagic sea lanes passage”. This right grants ships to navigate in their “normal mode” －as applied to submarines, this means they can remain submerged. Dita Liliansa’s analysis is worth quoting at length here:
“While UNCLOS promotes peaceful uses of the seas and oceans, it contains no provision permitting archipelagic states to suspend the right of archipelagic sea lanes passage through their archipelagic waters. Rather, it specifically provides that there shall be no suspension of the right of archipelagic sea lanes passage [emphasis added].”
Secondly, for decades US Navy submarines have been traversing regional waters; when Australia commands the AUKUS subs, it is expected that they will conduct operations in a similar manner. As Collin Koh states, archipelagic sea passage is the same as transit passage －neither can be suspended. According to him, Indonesia could suspend innocent passage in its archipelagic waters outside archipelagic sea lanes. In such cases, however, Jakarta can only do it “temporarily, and in specific areas”. Thirdly, AUKUS officials intimate that even a closure of the sea lanes (while unlikely) will not compromise submarine operations, partly because Indonesia lacks the capabilities to locate and track them.
The plan to provide the Australian Navy with nuclear-powered attack submarines within the next decade is one of the most controversial defence procurement programmes in the Indo-Pacific. Implementing the multi-decade endeavour will be extremely costly, and technically and operationally challenging. Several Southeast Asian countries, such as Malaysia and Indonesia, have reiterated their concerns that AUKUS could undermine regional stability and weaken global nuclear non-proliferation regimes. Officials from the three AUKUS countries－but especially Australia－have spent considerable efforts to explain the strategic rationales for AUKUS and assuage their concerns, resulting in a more nuanced stance than when the trilateral security initiative was first announced in 2021. However, it is likely that Malaysia and Indonesia will continue to express disquiet regarding the effect AUKUS submarines will have on security dynamics in the region.
For endnotes, please refer to the original pdf document.
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