Naval Power in the Pacific: Toward the Year 2000 9781685852610

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NAVAL POWER IN THE PACIFIC

NAVAL POWER IN THE PACIFIC Toward the Year 2000

edited by Hugh Smith and Anthony Bergin

Lynne Rienner Publishers

•

Boulder & London

Published in the United States of America in 1993 by Lynne Rienner Publishers, Inc. 1800 30th Street, Boulder, Colorado 80301 and in the United Kingdom by Lynne Rienner Publishers, Inc. 3 Henrietta Street, Covent Garden, London WC2E 8LU © 1993 by Lynne Rienner Publishers, Inc. All rights reserved Library of Congress Cataloging-in-Publication Data Naval power in the Pacific : toward the year 2000 / Hugh Smith and Anthony Bergin, editors, p. cm. Includes bibliographical references and index. ISBN 1-55587-358-8 1. Sea-power—Pacific Area. 2. Pacific Area—Strategic aspects. I. Smith, Hugh, 1943- II. Bergin, Anthony, 1954VA730.N38 1993 359'.03'099—dc20 92-46772 CIP

British Cataloguing in Publication Data A Cataloguing in Publication record for this book is available from the British Library.

Printed and bound in the United States of America

(S)

The paper used in this publication meets the requirements of the American National Standard for Permanence of Paper for Printed Library Materials Z39.48-1984.

Contents

List of Illustrations List of Acronyms and Acknowledgments

Abbreviations

Introduction Hugh Smith and Anthony Bergin Part 1 The Military and Economic Environment of Naval Power 1

The Future of Naval Power Admiral Charles R. Larson, USN

2

The Implications of Economic Development for Naval Power in the Pacific Wolfgang Kasper

Part 2 The Changing Context of Naval Operations 3

Regional Constraints on the Role of Navies William T. Tow

4

New Developments in the Law of the Sea Anthony Bergin

5

Arms Control at Sea Andrew Mack

vi

Contents

Part 3 Navies and Technological Change 6 7 8

Technological Change and Surface Forces Rear Admiral N. D. H. Hammond, RAN

101

Technological Change and Sub-surface Forces Captain Richard Sharpe, RN

107

Naval Aviation for Pacific Navies Norman Friedman

113

Part 4 The Changing Roles of Navies 9

10

11

The Functions of Navies in the Southwest Pacific and Southeast Asia Commodore Sam Bateman, RAN

129

The Role of Navies in Peacetime: The Influence of Future History on Sea Power Ken Booth

145

Navies in Future Conflicts Eric Grove

163

Index About the Contributors About the Book

175 183 186

Illustrations

Tables 2.1 9.1 9.2

Key Economic and Social Indicators of Pacific Countries Southeast Asia and South Pacific Maritime Zones ASEAN Merchant Fleets, 1981-1991

22 131 ¡33

Figures 2.1 2.2 2.3

Ranking the International Attractiveness of Nations to Investors, 1991 The Pacific Economies in the Year 2000: A Schematic Representation Growth and Living Standards: An International Comparison

vii

20 30 31

Acronyms & Abbreviations

AA AAW ACDA ACM AEW ANZAC ANZUS APEC ASEAN ASM ASW ATACMS AUV(s) CBM CCS CINCPAC CIS CSBMs CSCA CSCE CV CVBG DPRK EASI ECM EEZ EMP

anti-aircraft anti-air warfare Arms Control and Disarmament Agency acoustic countermeasures airborne early warning Australia-New Zealand Army Corps Australia, New Zealand, and United States Asia Pacific Economic Cooperation Association of Southeast Asian Nations air-to-surface missile antisubmarine warfare army tactical missile system autonomous undersea vehicle(s) confidence-building measures combat control system commander in chief, U.S. Forces in the Pacific Commonwealth of Independent States confidence- and security-building measures Conference on Security and Cooperation in Asia Conference on Security and Cooperation in Europe aircraft carrier carrier battle group Democratic People's Republic of Korea East Asia Strategy Initiative electronic countermeasures exclusive economic zone electromagnetic pulse ix

x

Acronyms

FAC FFG FLASH FON FPDA GATT GDP GNE GPS HELRAS HF/DF HIPAS IAEA INF ISAR JOTS LAMPS MCM MHI MIRV MOU MUD NAAWS NAFTA NATO NCAPS NCND NICs NNPT OECD OTH PACT PNG POMCUS PRC RAAF RAF RAN RBU RMN RNZAF RNZN ROK

and

Abbreviations

fast attack craft guided-missile frigate folding light acoustic system for helicopters freedom of navigation Five Power Defence Arrangements General Agreement on Tariffs and Trade gross domestic product gross national expenditure global positioning system helicopter long-range dunking sonar high frequency/direction finding high performance active sonar International Atomic Energy Agency intermediate nuclear forces inverse synthetic aperture radar joint operations tactical station light airborne multi-purpose system mine countcrmeasures mine hunter inshore multiple independently-targetable re-entry vehicle Memorandum of Understanding mutual unilateral degradation naval anti-air warfare system North American Free Trade Agreement North Atlantic Treaty Organization naval control and protection of shipping neither confirm nor deny newly industrializing countries Nuclear Non-Proliferation Treaty Organization for Economic Cooperation and Development over the horizon Philippine-American Cooperation Talks Papua New Guinea prepositioning of matériel configured to unit sets People's Republic of China Royal Australian Air Force Royal Air Force Royal Australian Navy rocket bombardment mount (Soviet) Royal Malaysian Navy Royal New Zealand Air Force Royal New Zealand Navy Republic of Korea

Acronyms

RP RPB SAG SAR SEANWFZ SEATO SLAM SLBM SLCM SLOCs SOSUS SPNFZT SS SSBN SSM SSN STOV-L SURTASS SWATH TALD TARPS TLAM-N TWCS UN UNCLOS USAF USN UUVs VSTOL WEU ZOPFAN

and

Abbreviations

Republic of the Philippines remotely piloted vehicle surface action group search and rescue Southeast Asian Nuclear Weapons Free Zone Southeast Asia Treaty Organization stand-off land-attack missile submarine-launched ballistic missile sea-launched cruise missile sea lines of communication sound surveillance system South Pacific Nuclear Free Zone Treaty submarine(s) nuclear-fueled ballistic-missile submarine surface-to-surface missile nuclear-fueled submarine short takeoff, vertical landing surface towed-array system small waterplane area, twin-hull tactical air-launched decoy tactical air reconnaissance pod system tactical land-attack missile—nuclear-aimed Tomahawk weapons control system United Nations United Nations Conference on the Law of the Sea United States Air Force United States Navy unmanned undersea vehicles vertical/short takeoff and landing Western European Union Zone of Peace, Freedom, and Neutrality

xi

Acknowledgments

Most of the chapters in this book had their origins in a conference held by the Australian Defence Studies Centre at the Australian Defence Force Academy in Canberra in 1991. We are grateful for the support that was received from many quarters: Australia's minister for defence science and personnel, Gordon Bilney, who opened the conference; Professor Henry Albinski, director of the A u s t r a l i a - N e w Zealand Studies C e n t e r at Pennsylvania State University, which cosponsored the conference; the Royal Australian Navy, particularly the chief of naval s t a f f , ViceAdmiral Ian McDougal, and the Maritime Studies Program, which also sponsored the conference; and Australian Defence Industries, which provided financial support. Our thanks also go to Margaret McNally for her prompt and efficient word processing of the manuscript. The authors of the various chapters, however, remain responsible for all views and opinions expressed, which are not necessarily those of the organizations with which they are associated. Hugh Anthony

xiii

Smith Bergin

Introduction Hugh Smith & Anthony

Ber gin

Forty years ago, the United States was the largest naval power in the Pacific. The British and, to a lesser extent, the French maintained a naval presence that was consistent with their status as colonial powers. Today, the United States is still the largest naval power, but the overall picture has changed remarkably. The British have gone. A powerful Soviet Pacific fleet emerged but the collapse of the Soviet Union has left in doubt the naval policies of its Russian successor. China has acquired a significant regional navy, and, in terms of non-nuclear warships and submarines, the Japanese Maritime Self Defense Force has the third largest navy in the world. Of no less importance in recent years has been the advent of several "new" navies on the Asian seaboard of the Pacific. Other countries, such as the Republic of Korea, Malaysia, Taiwan, and Thailand, are also acquiring more powerful naval capabilities. Remarkable changes have also taken place in naval technology, particularly in naval platforms, weapons, and sensor systems. Potent maritime strike capabilities such as fast surface vessels and aircraft, armed with highly effective anti-shipping missile systems, are examples. The relative balance has swung from large navies predicated on sea control toward smaller forces dedicated to sea denial. These developments and their import for Pacific navies are considered in the three chapters on surface forces (Commodore N. D. H. Hammond), sub-surface forces (Captain Richard Sharpe), and naval aviation (Norman Friedman). New technologies, of course, have added enormously to the cost of naval power, and the trade-off between costs and capabilities is a major issue not only for navies but for all services. All states aspiring to naval power must make these calculations although the relationship between cost and capability is not necessarily as direct as many people assume. 1

2

Hugh Smith & Anthony

Bergin

Nonetheless, rapid economic growth within the region has made naval capabilities relatively more affordable. Economic prosperity and national consolidation have provided a spur for the development of naval power in this part of the world. The chapter by Wolfgang Kasper examines the economic base of the nations of the Pacific and the implications for their continued development of naval power. These observations on the navies of Pacific powers and on the associated economic and technological developments do not mean that we are in the midst of some kind of naval arms race. In the first place, the current growth of naval forces can be seen rather as part of a normal process of developing capabilities as military equipment of all kinds becomes obsolete or prohibitively expensive to maintain. In particular, the economic strength of regional countries and their growing sense of national self-confidence helps to account for their greater interest in military forces in general. The great majority of Pacific countries, furthermore, not only rely to a significant degree upon the sea for security against external threat but also regard the sea as a major source of food and other natural resources and as an important means of communication. As the Pacific region has become an area of great economic dynamism, the significance of maritime issues has grown commensurately. More nations of the Asia Pacific possess large or growing national-flag, merchant, and fishing fleets and have a growing concern for the security of seaborne trade. At the same time increased attention is being paid to offshore resources. A number of Asia Pacific countries are anxious to resolve disputed claims to maritime boundaries and develop capabilities to enforce maritime sovereignty. These developments are also important for the small Pacific island states, which are concerned about the security of their maritime environment. Thus, the focus of these developments, in fact, is far from purely military. Although there is considerable spending on new equipment, this process of developing capabilities cannot be interpreted as an arms race or attributed to rising militarism. In this context, rather than "naval power," indeed, it may be more appropriate to talk of "maritime power," reflecting more properly the importance of countries' general maritime interests to their national security. "Maritime power"—the ability of states to control or manage events in the total maritime environment—will always be a vital concern of Pacific nations. The wider disarmament and arms control process has so far concentrated on strategic forces and the balance between the North Atlantic Treaty Organization (NATO) and the former Soviet Union. Maritime forces, and certainly conventional naval forces, have been largely excluded. Although current indications are that the navies of the United States and of Russia will be reduced as a result of the decline in East-West tensions, we can expect the cuts to be proportionately less than those in air and ground forces. Those countries acquiring more powerful naval capabilities are

Introduction

3

committed to long lead-time acquisitions and can increasingly afford more technologically advanced equipment. Their strategic view is not going to be tied closely to any global accommodation on the control of naval weaponry. Taken as a whole, the Pacific area is likely to see continued growth in total maritime forces, particularly in the short term. All these factors add up to a picture of strategic uncertainty, especially in the light of the current drawdown of U.S. forces in the Pacific and of growing fears of potential conflict in areas such as the South China Sea. William Tow discusses the range of political inputs into the process, and Andrew Mack examines the prospects for arms control. There is uncertainty, too, over important aspects of the law of the sea such as innocent passage, use of the high seas, and access to archipelagos and straits, which are discussed in Anthony Bergin's chapter. It is possible to suggest, nonetheless, that despite elements of strategic uncertainty the Asia Pacific region has adjusted better to the end of the Cold War than other parts of the world. We have seen a reduction in tension on the Korean Peninsula, movement toward settlement of the conflict in Cambodia, gradual steps to bring Vietnam back into the region, and a strong push for regional economic collaboration, particularly through initiatives such as Asia Pacific Economic Cooperation (APEC). The decline in global tensions appears to improve rather than diminish prospects for a cooperative approach to security in the broadest sense and to reduce the likelihood of conflict in the political and economic spheres. Economic interdependence, moreover, creates a collective interest in maintaining trade such that defense relationships in the Pacific are increasingly likely to reflect this imperative. All this is not to say that political adjustments will not be necessary. The increased wealth of the region will bring greater political power to some states, and this increase is already leading to growing arms imports. There will be problems associated with Japan assuming an enhanced security role; China appears to be adopting a hard line on territorial disputes such as the South China Sea; and some low-level problems such as piracy, drugs, and refugees will persist. The U.S.-Japan security arrangement is still the key to regional stability. A breakdown in that relationship that saw Japan going its own way would have very serious implications for all states in the Asia Pacific. With the disappearance of the Soviet threat a reduced U.S. presence in the region appears likely, but the United States is not going to retreat from sight. It remains a Pacific country with an extensive western coastline, and Alaska, Hawaii, Guam, and Samoa give the nation much more an Asia Pacific identity than any perceived European connection. U.S. trade with the region is outstripping that with Europe, which gives the former a major stake in the continued economic prosperity of the region. The states of the Asia Pacific are now well engaged in a post-Cold

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Hugh Smith & Anthony Bergin

War regional security dialogue. The heads of government of the Association of Southeast Asian Nations (ASEAN) have now agreed for the first time to systematically address security issues, and new possibilities are being opened up in terms of confidence-building and dispute-settlement mechanisms among states in the Asia Pacific. These mechanisms are more regional and sub-regional initiatives than grand designs in the European mold, but they are addressing key post-Cold War issues, including changes in such fundamental concepts as sovereignty and common security. Important in all this is what could be termed the "catholic" nature of navies. They have a common understanding of the environment they share, they are generally accustomed to operating with the naval forces of other countries, and frequently have standard operating procedures for doing so, particularly in the area of maritime surveillance regimes. In short, they are a good vehicle for activities promoting cooperative approaches to security between Asia Pacific nations. That is a significant and positive dimension of naval power. The potential for higher level cooperation on maritime operations and maritime developments certainly exists in the Asia Pacific, particularly in the area of joint operating procedures and maritime surveillance. The economic argument for more efficient use of joint resources will be a compelling one for some states. The recognition of the importance of maritime confidence-building measures to overall security is also likely to grow in the region as we see more ships, submarines, and aircraft being acquired and as weapons and sensors become more technically sophisticated. Navies are also growing in potential importance for United Nations (UN) activities. Since 1990, for example, naval forces have played a major role in both the imposition of a blockade against Iraq and in the military action to drive Iraqi forces out of Kuwait. Admiral Charles Larson's observations on the future of naval power provide some impressive facts and figures. But naval forces are also attracting interest for purposes such as maritime policing, maintaining law and order, and supporting l a n d - b a s e d peacekeeping operations under UN or other international authority. Navies may also have a role to play, perhaps on a cooperative basis, in dealing with common problems such as piracy, narcotics smuggling, environmental pollution, and the enforcement of fishery and whaling agreements. Maritime forces are thus likely to play increasingly important roles in both peacetime and wartime. The concluding chapters by Sam Bateman, Ken Booth, and Eric Grove survey the wide range of possibilities. The future role of navies in the Pacific—perhaps more than elsewhere—is as broad as the ocean itself. It is the intention of this book to canvass those prospects and possibilities while examining the underlying dynamics of change.

Parti The Military and Economic Environment of Naval Power

1 The Future of Naval Power Admiral

Charles R. Larson,

USN

The close relationship between the United States and Australia is based upon common history, common language, common values, and, to a large extent, common cultures. Former U.S. president George Bush has said that we have more than an alliance; he called it "an intimate partnership between two peoples." We proved that across the South Pacific in the darkest days of World War II. We proved it in Korea and in Vietnam. And we proved it again in the Persian Gulf, where the first combined boarding to enforce UN resolutions was by the USS Brewton and HMAS Darwin. In fair seas and foul we have sailed a common course. I am pleased to address a key issue in "The Future of Naval Power" in this volume as our two countries take a new bearing for the days to come. Of course, some people are not easily persuaded to change course. I am reminded of a crusty old U.S. admiral who was leading a battle group exercise off the coast of Hawaii late in 1939. It was midwatch on a foggy night when the lookout reported a light directly off the bow and closing. The admiral raced to the bridge and ordered a signal be sent: "Alter your course 10 degrees to starboard." In a moment, a signal flashed back: "You alter your course 10 degrees to starboard." The admiral was naturally angry at the impertinence—and the lights continued to close. He ordered another message: "Alter your course 10 degrees to starboard. This is Rear Admiral Smith." Soon a message flashed back: "You alter your course 10 degrees to starboard. This is Seaman 2nd Class Jones." Enraged, and with the lights still closing, the admiral ordered another message: "Alter your course 10 degrees to starboard immediately. I have a battleship!" Quickly a message flashed back: "You alter your course 10 degrees to starboard. I have a lighthouse." I guess the lesson is that no matter who you are, sometimes you have to change course. 7

8

Admiral

Charles R. Larson,

USN

Unfortunately, the signal for a change is sometimes even more dangerous than a lighthouse on the shore—sometimes the signal is a lost battle or a lost war. Early in World War II our nations saw the course of naval warfare change suddenly, signaled by defeats at Pearl Harbor and at Singapore. Belatedly we learned hard lessons about the importance of staying on the cutting edge of doctrine and technology. In May 1942 we halted Japanese expansion at the Battle of the Coral Sea, and ultimately we prevailed—but at a terrible cost. Our course correction came too late. Today, we again see signals on the horizon, warning that it is time to change our course. This time the signals are flashed not by defeat, but by victory, first in the Cold War, and then in Operation Desert Storm. These victories—and their aftermath—wam us of a sea change in the threat we face and the assets available to meet that threat. It is time to plot a new course for the twenty-first century. It is time to ask: • • •

What kind of world will we face? What kind of strategy do we need? What kind of navy must we have to secure our interests in the future?

The world we are entering today is completely transformed from a few short months ago—as different as the age of steam from the age of sail. The threat of a massive, short-notice, Soviet attack in Europe and a subsequent global war—the threat that drove our strategic planning for two generations—has dissipated. It ended with the collapse of the Warsaw Pact, a triumph for our strategy of "containment." I take pride in the role the U.S. Navy played in this victory, and pride in the allies who stood by us. It was a dangerous and frustrating duty, standing at battlestations for 45 years. But the world is a safer place today because our nations showed that communism could not intimidate or defeat a united free world. The new era we are entering brings challenges of its own. Economic growth has made all of us dependent on access to international markets and resources, especially those of us living around the Pacific Rim. As a result, the g r e a t e s t threat to our n a t i o n s today is r e g i o n a l i n s t a b i l i t y . Unfortunately, the rise of the multipolar world is accompanied by dangerous trends that threaten to fuel such instability and to jeopardize our national interests. For example, the rising tide of new demands by ethnic groups, nationalists, and religious extremists has spurred clashes in Kashmir, Punjab, Sri Lanka, Papua New Guinea, and Yugoslavia. Economic progress has been uneven, creating frictions between newly developed "haves" and "have nots." Population growth is accelerating in many areas of Asia, threatening to reverse the progress against hunger made in the Green

The Future of Naval Power

9

Revolution of a few years ago. In other nations we see an opposite trend, as aging populations require increasing social services. And in virtually all nations, urbanization is creating new social and environmental problems. Given the growing importance of regional stability and the growing list of r e g i o n a l i s s u e s , I do not find long-term military t r e n d s r e a s s u r i n g . Conventional weapons are growing in range, accuracy, and lethality, and some of the most destabilizing offensive systems are now widely available. As the Gulf W a r showed, local conflicts are now more lethal, costly, and d e s t r u c t i v e t h a n e v e r . I r a q , w i t h a p o p u l a t i o n r o u g h l y t h e s i z e of Australia's, fielded the fourth largest standing army in the world, precipitated a crisis that caused untold human suffering, and cost the world an estimated 60 billion dollars, not counting the grave ecological damage and trade losses. I r a q ' s b u i l d u p may be an extreme case, but it is not unique. E v e n excluding traditional world powers, 20 nations can now field more than 1,000 tanks each. There are 15 "blue-water" navies in the world. Diesel attack submarines are possessed by 41 countries, and more than 4 0 0 submarines are employed by nations other than the United States and the former Soviet Union. Exocets, Silkworms, and other advanced technology systems are widely available; 80 nations possess Stinger-class surface-toair missiles. We estimate that by the year 2000 more than two dozen developing nations will possess ballistic missiles, at least 15 will be producing their own, and 6 more will have missiles with ranges of 1,500 miles or more. Even more disturbing is the rush of developing nations to acquire w e a p o n s of m a s s destruction: At least 10 have stockpiles of c h e m i c a l weapons, 6 others are pursuing chemical programs, and perhaps as many as 10 are working on biological programs. As we try to design a strategy and a naval force to deal with this new era, we must take one more factor into account: the declining military budgets available to most developed nations for the foreseeable future. After adjusting for inflation, 1992 brought the United States its lowest military budget since 1985—and that budget will probably continue to decline at about 3 percent a year until at least 1995. By 1997, we plan to trim onethird of our active-duty army divisions, one-third of our strategic bombers, and nearly one-third of our fighter wings. At least 94 ships will be removed from our active inventory, and about 500,000 active-duty personnel will leave our uniformed services. Let me hasten to add that the vast majority of budget reductions will take p l a c e outside the P a c i f i c theater. Of c o u r s e , as the g l o b a l t h r e a t r e c e d e s , we will draw d o w n some of our f o r c e s in response. W e h a v e already begun a withdrawal of 15,000 personnel from Japan, Korea, and the Philippines, to be completed by 1993. [By December 1992, 39,500 U.S. military personnel remained in Japan and about 38,000 were still in Korea, while withdrawal from the Philippines was completed. Eds.] We will watch

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Admiral Charles R. Larson, USN

closely to see if additional reductions are strategically sound. But because this is a maritime theater and most changes have been to land-based threats in other areas, I expect budget cuts to be relatively light in the Pacific Command. However, the implications for free world armed forces are clear. Our strategy must promote regional stability while maintaining our readiness to meet a wide variety of m o d e m threats, on short notice, across enormous geographic distances—and on a limited budget. It is a tall order, but I am sure that our nation will succeed, and that naval power will continue to be key to our success, especially in the Pacific. At the U.S. Pacific Command, our strategy for regional stability and the future is founded on forward presence of military forces and robust friendships and alliances. Because of the size and diversity of the Pacific, a multilateral defense structure like N A T O is unlikely anytime soon, so we concentrate on fostering multiple bilateral relations. Our goal is to promote stability through a network of such relationships throughout the region, with U.S. military forces acting as the glue to hold this framework together. In peacetime, personnel from the Pacific C o m m a n d build relations w i t h m o r e t h a n 4 0 c o u n t r i e s t h r o u g h m i l i t a r y e x e r c i s e , t r a i n i n g and exchange programs, and friendship programs like disaster relief, nation building, and ship visits. In crisis, we depend on our carrier battle groups, amphibious forces, air wings, and quick-reaction ground forces to deter conflict by showing our capability and our resolve. And if an aggressor refuses to be deterred, our forces can work with others to end a conflict rapidly in support of international order and the rule of law. This strategy proved itself in the Mideast crisis, when we moved more than 9 0 , 0 0 0 people, scores of ships, and h u n d r e d s of aircraft f r o m the Pacific to the Mideast, equipped them from our prepositioned ships and war reserve stocks, and helped to sustain them across a 10,000-mile sea and air lifeline. The sound relations we had previously established throughout this theater in peacetime proved invaluable in amassing international support and speeding the flow of air and sea cargo through the region. The naval forces we maintain as part of our strategy proved invaluable in every phase of operations: •

•

As the first f o r c e s on the scene, ships of the Joint T a s k F o r c e Mideast and the USS Independence carrier battle group established our presence and drew the line against Iraqi aggression into Saudi Arabia. As international outrage grew, naval forces enforced UN sanctions on the high seas. It was at sea that the coalition first took shape, with 16 navies taking part in the embargo, challenging more than 9,300 ships, boarding more than 640, and diverting 67 bound f o r Iraq.

The Future of Naval Power

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•

Meanwhile, more than 250 ships from many nations made 450 trips carrying 18.3 billion pounds of cargo. Without that bridge across the ocean, the coalition ground campaign could never have taken place. • And as Desert Shield became Desert Storm, naval forces played a crucial role in the combat campaign. The first seizure of enemy territory, Faylaka Island, was by marines. The centerpiece of the deception campaign, which pinned the enemy in place and allowed the sweeping turn around their flank, was the threat of amphibious assault. When the trap was sprung, those same amphibious forces, joined by coalition troops and supported by naval gunfire, executed the short, shaip thrust that liberated Kuwait City. Forces at sea scored a number of firsts: • • • •

•

The USS San Jacinto fired the first Tomahawk cruise missile in combat; The USS Louisville became the first attack submarine to fire a Tomahawk cruise missile in anger; AV-8B Harriers conducted the first combat operations from a helicopter assault ship; U.S. military prepositioned ships were used for the first time to support quick reaction ground forces in a program that proved a major success; Remotely piloted vehicles (RPVs) made their wartime debut, adjusting naval gunfire and providing commanders a real-time view of the battlefield. According to one newspaper account, a group of Iraqis attempted to surrender to an RPV as it circled their position.

And finally, naval aviation continued to prove its worth. U.S. Navy and Marine Corps pilots flew 6,700 bombing missions, 5,500 combat air patrols, and 6,600 support missions, using 400 aircraft from 6 carriers. Of course, I do not intend to offer the Gulf War as the pattern of the future. The heavy Iraqi reliance on ground power, the presence of an extensive host-nation infrastructure, and the availability of seven months to build up our ground strength before the attack made this crisis unique. In the future, I would expect to meet a more well-rounded enemy, with less infrastructure available and less time to react. Our answer must be strong, flexible, mobile forces that are able to respond immediately and sustain themselves until reinforcements can be mobilized. Naval forces fill that bill. Although all services will remain important, I expect naval power will be the key to our future stability and security, especially in the predominantly maritime theater of the Pacific. So

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Admirai Charles R. Larson, USN

leading nations in this region (and that includes both the United States and Australia) must have certain naval assets and capabilities. We need to have forward-deployed expeditionary forces, capable of promoting relations in peace, deterring aggression in crisis, and projecting power in conflict—anywhere and anytime. We must have surge forces to react rapidly in a crisis and sea-based maritime propositioned forces to support them. And we must maintain our sea-based strategic forces for continued deterrence of nuclear attack. We must also provide these forces with modern equipment. We will need multi-role aircraft with stealth technology, longer range, increased payloads, and the best night-fighting capability in the world. We will need improved precision munitions to increase our accuracy, reduce our exposure, and minimize collateral damage. We will need state-of-the-art communications to carry massive amounts of data securely and allow us to talk with friends and allies as well as other services. We will need up-to-date space and electronic warfare equipment, as Desert Storm clearly demonstrated. And, of course, we must have advanced submarines to counter recent advances in undersea detection, to protect our most flexible and survivable strategic systems, and to ensure we maintain control of the sea lanes so critical to everyone's future. To conserve our resources, we must find some new, innovative ways of doing business. For example: • We can use distributed automation to consolidate functions. We began this process with intelligence centers in Hawaii in July 1991, saving 25 percent of the personnel billets in the process. • We can reexamine how we conduct routine deployments. The U.S. Pacific Fleet is exploring the idea of training battle groups together for deployment, then dispersing them into smaller force modules throughout the theater for combined training and ship visits, while remaining ready to quickly reconstitute as a battle group if required. • We can adjust the composition of battle groups, tailoring them to specific situations and reducing the number of ships deployed by exploiting the tactical advantages of distributed firepower available with new, sophisticated ships and weapons systems. • And perhaps most importantly, we can look for more opportunities to cooperate with our friends and allies in combined operations. Now when I say "we," I mean precisely that. Every nation must accept a share of the responsibility for regional stability—if not by building forces, then by hosting them and supporting their presence. And those who put ships to sea must ensure we can cooperate in peace and in crisis. The U.S. Pacific Command has made great progress with interoperability in the Pacific, especially with South Korea and Japan. But nowhere

The Future of Naval Power

13

have we had greater success than in Australia. S i n c e at least 1951 we have pursued a wide range of interoperability issues through

meetings,

exchanges, and exercises under the auspices o f the Australia, New Zealand, and United States ( A N Z U S ) security treaty. Our annual ministerial consultations and bilateral military representative t a l k s are i m p o r t a n t in this regard, and I e s p e c i a l l y want to c i t e the biannual s t a f f l e v e l m e e t i n g s , where the real y e o m a n ' s work is done. Our progress in communications, c o m m a n d and c o n t r o l , and l o g i s t i c s i s s u e s was e v i d e n t in t h e G u l f . M e m b e r s o f the U . S . Seventh Fleet tell me that because we work together so often, their operations with the Australians were as smooth as operations with the U . S . Sixth Fleet from the Mediterranean. I am delighted to see this c l o s e cooperation institutionalized through the recently developed F i v e Y e a r E x e r c i s e Program, which began with Kingfisher 9 1 . But I want to encourage the military members o f our two nations to find ways to do even more. Like the admiral I mentioned in my opening, we all see the danger signals flashing o f f the bow. It is time to mark our heading for the future. If we focus on the requirements for regional stability, and if we see our navies as contributors to the cooperative vigilance that e n s u r e s that stability, then I have every c o n f i d e n c e we c a n plot a n e w course together—a course to convoy our nations and their c o m m o n interests safely into the twenty-first century.

2 The Implications of Economic Development for Naval Power in the Pacific Wolfgang Kasper Security and Economic Welfare Naval power is one of the instruments for safeguarding a nation's security, that is, the insurance of the freedom to make sovereign choices in the future. Security is therefore the intertemporal dimension of freedom and a national objective that stands alongside such other social goals as freedom, justice, external and internal peace, and economic welfare. Like other noneconomic social goals, security is worth a material sacrifice, that is, the foregoing of some economic welfare. But, like all social goals, it is not absolute; it has to be weighed against all the others. There are trade-offs and complementarities between the various social goals. And it is my contention that, over the long term, economic welfare and security are strongly complementary: A healthy economy allows a better attainment of security, and security is a precondition for many aspects of economic growth. It is thus entirely appropriate to include an analysis of the development of the Pacific economies in a book on security and naval power. The relationship between national security and economic achievement runs both ways. The defense of national security nowadays demands huge economic and technical resources, which economically weak and industrially backward countries cannot readily marshal. Economic and industrial strength matters directly in funding and supporting defense and indirectly in making a country a valuable ally. Economic achievement is therefore one of the most decisive ingredients in shaping a nation's long-term defense potential. What matters to modem defense—and naval power—is not only the level and growth of the national product, but also the structure of the economy, in particular the contributions of manufacturing, transport

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and communications, education and skill levels, as well as research-anddevelopment resources. What also matters is the stability of the socio-economic fabric, especially the control of inflation and excessive indebtedness and the maintenance of productivity-oriented industrial relations. In each case, these factors have to be assessed for a nation relative to its rivals and allies. Of course, non-material factors—for example, the will to defend the nation's security—are also important. Economic welfare, consequently, is a necessary, though not sufficient, condition for a strong security stance. My assignment is to concentrate on the economic factors. But good security is also an important precondition for economic welfare. Massive, long-term commitments of capital and other resources are nowadays necessary for continuing economic and industrial growth. The owners of leading-edge industrial enterprises, of capital, skills, and technical know-how increasingly choose where to locate their assets for supplying entire global markets by evaluating where they find the rates of return and the risks most attractive. 1 The era is long past when industrial investments are spread indiscriminately among nations in response to import substitution and largely ignored long-term political and security risks. The new and growing trend is to place resources where they are likely to work most productively. This policy has become known as "globalization." Political stability and security from external threat—provided by national defense and its allies—are central ingredients in what makes a country an attractive location for globally mobile resources. 2 Nowadays, business investors seriously consider only a few dozen locations from which to supply world markets. Insecure places tend to drop out of the race. Thus, post-war European recovery would not have been possible without NATO, and the industrial revolution in East Asia and the evolution of dynamic trading networks in the West Pacific over the past three decades are not imaginable without the security network provided by the U.S. nuclear umbrella and U.S. military alliances, in which the U.S. Navy has played a central part. As a matter of fact, economic and military networks in the Pacific seem inextricably interwoven.

What Matters for Economic Growth? Before we can embark on a review of the economic development of the various Pacific countries and speculate about how future economic trends will affect naval power, a thumbnail sketch of a theory of economic development seems in order so that we can identify what economic factors are important to future defense and naval relationships. A generation ago, the attention of economists was focused on capital accumulation. They advocated high, often even forced, savings and the

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transfer of capital from rich to poor countries. Availability of natural resources also played a role. These views of development appealed to national economic planners and social engineers who hoped to impose econ o m i c d e v e l o p m e n t f r o m above by m o b i l i z i n g c a p i t a l and n a t u r a l resources. But we have since learned that nations can have high rates of capital formation and bountiful natural resources, yet unimpressive growth of living standards. In particular, communist countries like China, the USSR, or East European economies demonstrated that great reliance on capital formation and the squandering of natural resources were sure-fire ways to continuing underdevelopment! The analysis of economic growth in Western countries has clearly shown that factors other than labor and capital now account for half to three-quarters of measured economic growth. 3 Innovation of products and processes, using better technology, the learning of new skills, and structural adjustment of the economy to exploit new opportunities and to respond to new demands are critical for modem development. The focus has thus shifted from capital equipment—the "hardware" aspect of growth—to knowledge and enterprising, innovative, and adaptable people with skills and to asking in what political, social, economic, and institutional climate people best develop their material resources—in other words, to the "software of development." The know-how needed for the software aspects of development is so complex and dynamic that only research and experimentation from below by free, self-motivated individuals can yield sufficient results and only the competition in markets can sort what is wanted from what is too expensive or not useful enough. This is not to say that economic development does not require physical capital and natural resources. But the quality of people and entrepreneurship and the economic and social orders that motivate people and entrepreneurs have gained center stage in development theory. 4 What we have learned is that in a modern, complex, industrial world there is no substitute for the incentives of markets and private property to channel human creative energies into wealth creation and development. 5 We have also learned that markets do not function well in a vacuum: They require reliable institutions, such as the rule of law, adherence to a code of ethical conduct, the protection of private property, the enforcement of liability for one's actions, and provision of non-inflationary, stable money. These framework conditions for market activity keep the transaction costs of economic enterprise low and ensure that those who make an effort have a good chance of keeping the rewards. We have learned that arbitrary interventionism, cumbersome regulations, and the bureaucratization of economic life tend to channel people's energies into rent seeking; that is, obtaining unearned incomes at the expense of others. This is a zero- or even negativesum game 6 —whether market interventions are to the benefit of party appa-

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ratchiks in Moscow, military hierarchies in Third World countries, or the Industrial Relations Club in Melbourne. Centralization and coercive direction are, over the long term, invariably at the expense of economic growth. The lesson that rivalry in markets stimulates economic growth and technical innovation was relearned in the West a generation ago. And those countries in East Asia that absorbed this lesson in the early 1960s opened up to international investment and knowledge and entered into export competition while keeping rent-seeking industrial pressure groups at bay. 7 The nations that opened up soon became successful "new industrial countries." 8 If we accept the people-centered, market-oriented theory of economic development, we must focus an analysis of the present and future economic development potential of Pacific nations on the following criteria: • • • • • •

the structure, size, and growth of the population; the level and growth of per capita incomes; industry structures and their adaptability; skill and research capabilities; the size of the state and whether state activity supports productivity and competitiveness; and long-term economic stability, which has a lot to do with political and social stability and the speed of industrialization, urbanization, and economic development.

Survey of the Current Economic Potential of Pacific Nations The Pacific may be a geographic concept, but it is not a cohesive economic region despite the fact that more overseas trade now crosses it than the Atlantic. Seen through an economic filter, the Pacific itself can be perceived as a huge vacuum, with fewer people living in its islands than live in Hong Kong (2 million plus 3.7 million in Papua New Guinea [PNG]), surrounded by an amorphous, but increasingly dynamic Pacific Rim consisting of: •

affluent and reasonably populous North America (Canada, United States, and Mexico) now forming a continentwide free-trade zone of 360 million consumers; • the South and Central American edge of the Pacific with some 100 million people living in poor and undynamic economies; • on the whole still poor, but partly very rapidly developing and very populous East and Southeast Asia (some 1.75 billion people), a

The Implications of Economic Development

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region that spans a rich and stimulating mix of h u m a n economic experience and that has achieved a promising track record; and some sizeable, thinly populated islands in the S o u t h w e s t Pacific with mainly white inhabitants and rich, but undynamic economies (20 million people).

What is the economic potential to support naval power of the major actors in this vast region, which covers a third of the globe and is home to over a third of the world's population? Compared to other major economic regions on earth, the Pacific is less h o m o g e n e o u s . But it does not comprise really intractable basket cases. Economic growth is spreading, and one nation after the other has managed the take-off into self-sustaining growth. Like Europe one century ago, the Pacific now has a diversity of development experiences; and this diversity stimulates the sort of imitation and rivalry that tends to propel economic and industrial progress. Development and education are now reducing birth rates in the Pacific region relatively fast, and economic priorities tend to f a v o r openness, trade, and interchange. W i t h the e x c e p t i o n of periodic political turmoil in China, there have been relatively few politically caused economic reversals over the past three decades. The 250 million people in the United States still form the most productive and richest nation on earth. 9 Despite now being exposed to international rivalry in many industries, traditionally leading U.S. producers still comm a n d a position at the technological edge in m a n y fields of e c o n o m i c endeavor. In the 1980s, the underlying growth trend accelerated again, not only in selected manufacturing industries and exports but also in the rapidly growing, technologically dynamic service sector (transport, communications, entertainment, finance, and trade). And the economic and population dynamics have shifted from the old East coast to the new West, thus moving the center of gravity and attention to the Pacific side. Immigration of skilled and unskilled people has played an important role in the dynamics of the U.S. economy. 1 0 More generally, openness to t r a d e , ideas, and people has shaped the e c o n o m i c o r d e r of the U n i t e d States. Its economic system is based largely on individual initiative from below, which is controlled and channeled by competition in markets within an institutional framework of law and democracy—the social order that tends to direct human enterprise into economic growth and a w a y f r o m r e d i s t r i b u t i o n a l r e n t - s e e k i n g and p o w e r p o l i t i c s . In t h e 1 9 8 0 s , t h e s e trends—and their intellectual underpinnings—have been reinforced, and the United States maintains a social, political, and economic system that offers highly attractive conditions to mobile capital skills, know-how, and businesses (Figure 2.1) and therefore has a good growth potential.

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