Sorry, France: Russia to Build Powerful Mistral-Style Assault Ships

The Buzz

Russia will build its own amphibious assault ship in the wake of France refusing to sell Moscow two Mistral-class helicopter carriers.

In 2011, France and Russia signed a $1.5 billion deal for Paris to build two Mistral-class amphibious assault ships for Russia. The ships have already been built and the first one was scheduled to be delivered last November, but France pulled out of the agreement at the last minute over Russia’s role in the Ukraine crisis.

Ever since Paris began to reconsider the agreement, there have been periodic reports that Russia might build its own helicopter carriers to replace the Mistral vessels.

Indeed, as far back as October 2014, Rear Adm. Victor Bursuk, the deputy Commander-in-Chief of Russia’s Navy, declared: “We are not dependent on France in any way, it is just one of the contracts of military-technical cooperation and nothing more. The [Russian] shipbuilding program planned building warships of this class, and it will certainly be implemented.”

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Discussion of domestically-produced amphibious assault ships has picked up in Russia in recent weeks as France has moved to formally terminate the contract.

For example, back in May, as French representatives were arriving in Russia to discuss the terms of the cancellation, Oleg Bochkaryov, the deputy chairman of the Russian Military-Industrial Commission, told local journalists: “We have these types of ships planned.” Around the same time, there were a number of reports that suggested that Russia had received some of the Mistral-class design blueprints from France, and would possibly produce a replica of the French-built ships. Bochkaryov denied these reports, however, saying the Russian amphibious assault ships “will be built in line with a different class as we have a different ideology of paratroopers landing. There is no set task of copying Mistrals.”

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Other Russian officials later denied that Moscow had received any of the Mistral technologies from Paris. For example, last month Denis Manturov. Russia’s Industry and Trade Minister, told reporters, “What technology we have received? - none as of today [sic].” He did allow, however, that Russia “already had the hull modular design technology, we just had no orders, and we supplied the stern section and the fore-body."

At an arms show in St. Petersburg this week, Vladimir Pepelyayev, the chief of naval shipbuilding division at the Krylov State Research Center, elaborated on how the Russian vessels would differ from the French ones Moscow had originally intended to purchase. According to Pepelyayev, the Russian design “suits the tactics of using our forces, our mentality and our approaches to amphibious operations." He added: "Mistral and other such foreign ships… are tailored to match the ‘Atlantic mentality’. The task of our ships is to provide assistance to frontline troops in defending our borders, in other words, landing assault groups in the rear of advancing enemy forces. Naturally, they are designed differently.”

Pepelyayev went on to say that his company had passed the design information to the Russian Navy and is currently waiting for its approval. “The concept has been proposed to the Navy for scrutiny. We shall now wait for the Navy to speak its mind.”

He also estimated that the ships would cost 30 billion rubles (roughly $550 million) to build, and possibly less. About 80 percent of this cost would go to weaponry, while the other 20 percent would go towards the hull.

Regarding the timeline for the ship’s construction, Pepelyayev explained: “The conceptual design will take about twelve months to accomplish and the technical project and design documentation, another year or two. Building the ship will require another three years." Other experts have given a similar timeline, saying the ship could be built by 2020.

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As The National Interest has repeatedly emphasized, Russia is undertaking a massive military modernization program, which it plans to continue despite its mounting economic woes. Like many of the weapon systems being contemplated, its unclear what level of priority the amphibious assault ship will be given, a factor that will be especially crucial if economic factors force Moscow to scale back the modernization effort.

In fact, there is some reason to believe that the amphibious assault will not be a high-level priority. Namely, Russian security officials have said France’s failure to deliver the Mistral-class ships will “definitely not” impact Russia’s national defense, and that the cancellation “cannot be even considered a loss." These comments, however, may have more to do with a long-standing belief in some Russian defense circles that Moscow should have built the ships domestically from day one.

Zachary Keck is managing editor of The National Interest. You can find him on Twitter: @ZacharyKeck.

Image: Wikimedia/Simon Ghesquiere/Marine Nationale

TopicsSecurity RegionsEurasia

Asia's Lethal Naval Arms Race

The Buzz

Claims that a destabilizing ‘arms race’ is underway in the Asia–Pacific have become commonplace and are supported by reports that regional defense spending has surpassed Europe for the third consecutive year. As my ASPI report released today shows, the corollary of this situation is intensifying naval competition in the region. The implications for Australia and the Australian Defense Force (ADF) are significant.

Decisions on arms acquisitions in the Asia–Pacific continue to be driven by a multitude of strategic rationales and domestic factors. The significant changes underway since 2008 raise questions regarding the primary motivation behind regional naval acquisitions, including their supporting air capabilities.

Maritime disputes between China and its neighbors have increased tensions and affected countries’ military modernization programs. These tensions have driven the requirement for greater surveillance capabilities and signals intelligence systems as well as more surface combatants with longer endurance and platforms able to launch anti-ship missiles, submarines, and long-range aircraft.

These disputes occur in the context of heightened uncertainty about the future distribution of regional power, particularly between the U.S. and China. Consequently, regional naval arms decisions are increasingly driven by ‘action–reaction’ dynamics—reciprocal dynamics in which developments in offensive and defensive capabilities become an interactive process in which the arms requirements of one party depend upon the known, assumed or anticipated capabilities of the forces of other parties; Those dynamics are manifested in counter-reaction (where one party responds to another’s capabilities) and mirror-reaction (where a party imitates another’s capabilities). In other words, these dynamics display some of the important characteristics of an arms race and show that the Asia–Pacific maritime zone is indeed becoming more contested, and potentially more volatile.

Obviously, there are regional differences between Northeast Asia and Southeast Asia. Naval ‘action–reaction’ dynamics are most clearly visible in Northeast Asia. It should be noted that a common argument (see for instance here) against the emergence of naval arms races or serious competition in Asia is that defense                        spending as a percentage of GDP remains rather modest in most countries. That’s also true for northeast Asian countries. However, this measure doesn’t take into account the real value amount, nor does it consider the sophistication or type of the defense equipment acquired by individual countries. Doing so paints a different picture, one that shows that China, Japan, South Korea and Taiwan are increasingly reacting to each other’s capabilities and modernization efforts. US capabilities are a key factor in this equation as well.

The picture in Southeast Asia is more complex. The South China Sea has dominated strategic rationales for increasing capabilities, particularly submarines. Since 2012 the number of naval platforms in many countries decreased while military expenditure continued to climb, indicating substantial efforts to modernize and invest in fewer but more capable systems. Despite these efforts, Southeast Asian countries (with the exception of Singapore) haven’t yet worked out how to develop, operate and sustain sophisticated capabilities. Should the ADF deploy to Southeast Asia in the future, it could face more sophisticated capabilities.

While the ADF won’t lose its ‘capability edge’ in Southeast Asia in the medium term, in the short term investments in certain platforms increase the chance of a ‘lucky punch’. For instance, Indonesia is testing supersonic missiles from its frigates and putting Chinese anti-ship cruise missiles on fast attack craft. With rising economic growth, Southeast Asian countries will better address problems such as maintenance and logistics and increase their combat capability through improved situational awareness and better command and control systems.

The dynamics of regional naval modernization indicate that the future security environment in the Western Pacific will only become more contested. Northeast Asia is already caught up in action–reaction dynamics. Maritime Southeast Asia might follow suit over time. Importantly, while not imminent, the ADF’s key tenet of being a technologically superior force in Southeast Asia will gradually be eroded, at least in certain capability areas.

The upcoming Defense White Paper will need to address how the ADF will modernize its own air and maritime capabilities in a neighborhood that’s becoming more complex. It also means that we need to invest even more in building sustainable regional defense partnerships and further strengthening our U.S. alliance.

This piece first appeared in ASPI's The Strategist here

TopicsSecurity RegionsAsia

Greece: The First Developed Country in History to Default to the IMF

The Buzz

Its failure to make a €1.73 billion euro payment to the International Monetary Fund by June 30 makes Greece the first developed country in history to default to the IMF.  It could also mark the beginning of the end for the European Union as the world has known it.

Brinkmanship by Greece’s hard-left Syriza government—rejecting its creditors’ demands to cut public sector wages, pensions, and other domestic spending while honoring its international debt obligations—continued down to the wire, and beyond. 

This default triggers a 30-day grace period, after which there could be serious consequences for Greece beginning in August, or sooner.  Greece’s other multilateral, government-backed international creditors—the European Central Bank (ECB) and European Commission—may now be forced to declare Greece in default in accordance with the terms of the current €130 billion euro bailout package that they and the IMF (the “Troika”) gave to Greece in 2012.  

That bailout was needed because the first one, a €110 billion euro package awarded by the Troika in 2010, failed to revive economic growth and put Greece back onto the path of fiscal stability.  The fact is that Greece has now essentially defaulted three times in the last five years, although the Troika institutions have tried to paper over the previous two defaults (which were euphemized as “haircuts” for investors), because they agreed to them. 

This third default, however, will be less orderly than the previous two.  Failure to make a €3.5 billion payment to the ECB on July 20 could be the final nail in the coffin and force Greece to leave the eurozone.

Heritage Foundation analysts criticized the IMF decision to proceed with the first bailout in 2010, which violated the IMF’s “exceptional access framework” lending caps. They also noted the certain predictability the first bailout would fail to solve the Greek debt problem in spite of the IMF’s bending the rules.  

The whole point of those IMF rules was to stop additional lending and force the Greek government to make the fundamental reforms and government spending cuts that must happen for a true economic recovery to begin.  But those reforms were barely being put into effect before the Syriza government—elected just last January—began rolling them back.

This week the Syriza government imposed capital controls and forced a week-long shutdown of the banking system, to head off a run by Greeks to grab what few euros are left in the vaults.   Meanwhile, Greece’s inexperienced and reckless Prime Minister Alexis Tsipras announced a referendum vote on Sunday, July 5, when Greek citizens can vote to accept the “austerity” measures being imposed by Brussels and Frankfurt—five days after the Troika deadline. 

There is an almost universal consensus among economists and policy analysts that Greece’s entry into the eurozone was a tragic mistake, especially for the citizens of Greece. At first the euro and the low interest rates it enabled provided a financial windfall.  

Unfortunately, the Greeks did not handle that unique opportunity prudently, but instead acted profligately.  Strong public sector unions demanded bloated government payrolls and generous early-retirement benefits. For their part, Greece’s protected and self-interested private business elites enjoyed the Eurozone benefits in tourism and shipping—then made tax evasion into an art form. The heavily indebted middle class saw this example and followed suit.

Greece is ranked 130th of 178 countries in the 2015 Wall Street Journal/Heritage Foundation Index of Economic Freedom, bettering only Ukraine and Belarus among its European counterparts. The rule of law is weak and corruption is pervasive. Despite some past efforts to create a more business-friendly regulatory environment, the labor market remains rigid and slow to adjust to market realities.

Getting out of the eurozone that it should never have been permitted to enter will be extremely painful for Greece. But at the end of the day, independence from the eurozone could be a blessing—albeit one accompanied by lower living standards for a while.  

A “Grexit” from the eurozone will also spur further soul-searching by Greece’s similarly indebted and economically less efficient EU neighbors in the southern tier.  And that will spell more trouble for the EU grand project, and the bureaucrats in Brussels.

James M. Roberts is a research fellow for economic freedom and growth at The Heritage Foundation. 

Image: Flickr. 


TopicsEconomics RegionsEurope

The Trillion Dollar Question: Is America's War on Terror Really Winnable?

The Buzz

In September 2004, President George W. Bush made a rare acknowledgment about the realistic outcomes of the war on terrorism in an exchange with Matt Lauer:

Lauer: Do you really think we can win this war on terror in the next four years?

Bush: I have never said we can win it in four years.

Lauer: So I’m just saying, can we win it? Do you see that?

Bush: I don’t think you can win it. But I think you can create conditions so that those who use terror as a tool are less acceptable in parts of the world—let’s put it that way.

This surprising remark came long after President Bush had repeatedly made the maximalist pledge that all global terrorists, as well as their ideology, would be defeated and destroyed. This was the purported strategic objective that was supposedly guiding U.S. counterterrorism strategies. As the February 2003 National Strategy for Combatting Terrorism proclaimed: “Objective: Destroy terrorists and their organizations. Once we have identified and located the terrorists, the United States and its friends and allies will use every tool available to disrupt, dismantle, and destroy their capacity to conduct acts of terror.” Moreover, this guidance was supposedly working; as Bush stated  on August 30, 2004, the month before speaking with Lauer: ”I have a clear vision and a strategy to win the war on terror.”

The President’s recognition, said during the height of the presidential campaign, was immediately denounced by Sen. John Kerry’s campaign, which released mildly humorous statements: “Bush Flip-Flops on Winning the War on Terror” and “Bush: Against Winning the War on Terror Before He Was for It.” Kerry’s running mate, John Edwards, proclaimed, “Saying we can’t win one day and flipping around the next day sends exactly the wrong message to the American people, to the world–and most importantly–to the terrorists who seek to harm us.”

The next day, August 31, while addressing the American Legion National Convention, Bush changed course and reverted to articulating the same implausible strategic objective that he had made the previous three years: “We meet today at a time of war for our country, a war we did not start, yet one that we will win…make no mistake about it, we are winning, and we will win. We will win by staying on the offensive. We will win by spreading liberty.”

This brief moment of clarity and honesty made eleven years ago is almost quaint in comparison to how Obama administration officials now describe progress in the war on terrorism. They no longer pretend the war can be won, or that it will even end. The expansion and growth of terrorist organizations that the United States claims it will destroy, and state of perpetual warfare are just something that Americans should accept and get used to. As CIA Director John Brennan noted this April, “It’s been a war that has been in existence for millennia…So this is going to be something, I think, that we’re always going to have to be vigilant about.” In short, the war on terror has always been with us, and it always will be.

I have a new piece in Foreign Policy that proposes a The National Commission on the War on Terrorism, which would consist of ten former officials, diplomats, and experts—with no personal or financial interest in the outcome—who would comprehensively review, evaluate, and offer new policy recommendations. Such commissions are rarely meaningful or impactful. However, current government officials and congressional members are too personally and professionally vested to objectively evaluate current strategies, demonstrate strategic learning, or implement any new policies. In short, U.S. counterterrorism strategy is both failing and frozen. The National Commission on the War on Terrorism would cost less than $4 million, and could be included in an authorization bill today. It would then be formed in the fall, with its conclusions and recommendations made publicly available in January 2017, just in time to inform Obama’s successor and the 115th Congress. It is a low-cost initiative to rethink the war on terrorism, and one that this Congress should pursue.

This piece first appeared on CFR’s blog Power, Politics and Preventative Action here.

Image: U.S. Marines Flickr. 

TopicsSecurity RegionsMiddle East

Newsflash: Working Is the Best Antidote for Poverty

The Buzz

Warren Buffett recently opined that economic growth no longer benefits low-income workers. His solution? Not to hike the minimum-wage—which he knows eliminates jobs—but to expand the Earned Income Tax Credit (EITC).

Buffett is wrong. Economic growth has considerably benefited low-income workers, while the EITC has problems as an anti-poverty tool. It has even larger problems with out of control erroneous payments. To help low-income workers, conservatives should focus on fixing these problems and mitigating federal disincentives to work and marriage that trap too many in poverty.

Popular opinion holds technology has made finding work harder for the less skilled. This is only partly true. True, technology has shifted employment away from routine tasks that computers can automate. The economy now needs fewer secretaries or assembly line workers than a generation ago—a painful transition for many.

However, automation also reduces costs and leaves Americans with more money to spend elsewhere. This has boosted both living standards and employment in non-routine jobs. Today’s economy also needs many more home care aides and IT staff than a generation ago.

On balance these changes have benefited most workers. Earnings have increased up and down the income ladder since the late 1970s. These changes have particularly benefitted the least skilled, who disproportionately work in non-routine manual jobs. Their skills are needed by more employers than before.

Many knowledgeable Americans think otherwise. This is because demographics and the economy have changed considerably since the 1980s. Household sizes have shrunk, the population has aged, and benefits now make up a much larger share of workers’ total earnings. Ignoring these shifts produces misleading conclusions.

Fortunately the Congressional Budget Office produces earnings figures accounting for these shifts. Their data shows that between 1979 and 2007, labor market earnings for the middle fifth of non-elderly households increased by a third, after adjusting for inflation. Compensation for the bottom fifth increased by about half.

The recession has partly eroded these gains, but most low-income households still enjoy higher material living standards than their predecessors. Anyone who doubts this should look at how consumption patterns have changed over the past generation. Goods that were once middle-class luxuries have become widespread among lower-income families.

In the 1980s, fewer than half of Americans in the bottom quintile had air-conditioning in their homes. Two-thirds did not have a drying machine. Just a third used a microwave. Virtually none had computers.

Today low-income Americans live in homes a fifth larger than in the 1980s. Most have drying machines. Only 1-in-6 go without air conditioning. Just 1-in-13 lack microwaves. 98 percent have televisions. Half own a computer. Half own smartphones—technological marvels unimaginable in the era of Commodore 64s. Small wonder the vast majority of Americans tell pollsters they live better than their parents.

Borrowing cannot explain these changes. Federal Reserve data show that low-income families spend little more of their income on debt-payments now than in the 1980s. Less-skilled Americans enjoy higher standards of living primarily because the rising tide of economic growth has lifted their boats, too.

Of course this does not make poverty pleasant. But policymakers should put connecting the poor to the labor market at the center of their anti-poverty efforts. In this regard, the EITC is better by far than raising the minimum wage or the vast majority of federal anti-poverty programs, which do not require work.

However, supporters have considerably oversold the EITC’s effectiveness. It’s true that policies promoting work can be an extremely effective tool to combat poverty. It’s also true that the EITC is intended to promote work. But contrary to conventional wisdom, the literature has consistently shown that the ETIC actually discourages work in two-income households.

And a new study offers compelling evidence that single mothers who are already in the workforce —a group that has historically increased participation in response to the EITC—worked less after the recent most recent EITC expansion in 2009.

Furthermore, the EITC’s complicated eligibility requirements consistently put the program at the top of the Office of Management and Budget’s “high-error” list. According to data from the Treasury Department, the IRS made almost $18 billion in improper EITC payments last year and $134 billion in improper payments over the last 10 years. This isn’t to say that policymakers should abandon the EITC. But the program needs reforms before conservatives should advocate expanding it.

Instead conservatives should focus their efforts on removing roadblocks the federal government places in front of those trying to get ahead. Americans who work full-time and get married are dramatically less likely to live in poverty than those who do not. Unfortunately most federal welfare programs discourage both full-time work and marriage. Even the EITC reduces benefits for single mothers who marry their children’s fathers.

Congress should restructure federal benefits to remove these marriage penalties. It should also make working—or work-related activities—a prerequisite for able bodied adults to collect federal benefits. Those who do not participate in the labor market cannot share in the benefits of its growth.

James Sherk is a Research Fellow in labor economics in the Center for Data Analysis and Paul Winfree is the Director of the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

Image: Official White House Photo

TopicsEconomics RegionsAmericas