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    The Israel Factor in Honduras Efforts to Modernise its Air Force Sanjay Badri-Maharaj February 09, 2017

    Israel’s influence on the new Trump Administration might clear the obstacles that have stood in the way of Honduras’ efforts to modernise its airforce

    On 2nd November 2016, the Honduran National Congress approved a draft decree – 139-2016 – approving a cooperation agreement, signed on 27th July 2016, between Israel and Honduras.1 This agreement was to refurbish the ageing Honduran Air Force (Fuerza Aerea Hondureña – FAH) force of helicopters, Tucano trainers, Northrop F-5 fighters and Cessna A-37 attack aircraft. 2 This was followed by a meeting on 8th December 2016 in Jerusalem between Honduran President Juan Orlando Hernandez and Israeli Prime Minister Benjamin Netanyahu which confirmed the agreement, along with others for a dedicated military communication system and the building of a large patrol vessel for the Honduran Navy.3 The total package is reputedly worth USD 209 million.

    This most recent effort represents the culmination of several years of concerted effort on the part of the FAH to refurbish its military aviation assets, previous efforts having foundered due to the objections of the United States.

    Background

    The FAH is probably unique in military history in that its establishment as a professional, organized force pre-dates that of the Honduran army (which took until 1933 to emerge as a semi-professional entity). In 1921, the first two Bristol F.2b biplane fighters were acquired. A decade later, the foundation of a professional air force was established with the Escuela Nacional de Aviacion being founded on 14th April 1931, with the official establishment of the Aviacion Militar Hondureña following in 1933.4

    The FAH proved its competence during the July 1969 “Football War” with El Salvador when its F4U Corsairs gained complete control of the air in the face of stiff opposition from El Salvador’s air force.5 The performance of the FAH stood in stark contrast to the defeat of the Honduran army which was outmanned and outgunned by a highly-trained and capable Salvadoran army. This significantly enhanced the prestige of the FAH and while the Honduran army was revamped and thereafter acquired a reputation for professionalism and competence, the FAH remained the lynchpin of Honduran defences.

    In the 1970s, the FAH emerged as the most potent force in Central America with deliveries of six ex-Venezuelan F-86K interceptors in 1970 being followed by ten ex-Yugoslav F-86E Mk.IVs in 1976. These were augmented by deliveries of Cessna A-37s from the United States from 1975 onwards.6 The FAH established a strong connection with Israel when 21 ex-Israeli Dassault Super Mystere B.2 fighter bombers were procured between 1976 and 1978. These were the first supersonic aircraft in Central American military service (Mexico not receiving its F-5s until 1982) and, being armed with Shafrir air-to-air missiles, easily outmatched the air forces of all neighbouring countries.7 The Sandinista revolution in Nicaragua led to a further leap in capability for the FAH as the country became a favoured US ally, leading to the first of a dozen Northrop F-5s being delivered in 1989.8

    The F-86s were retired in 1986 while the Super Mysteres served in ever decreasing numbers until 1996 leaving the 10 F-5s and 10 A-37s – the survivors of 12 and 17 respectively - to spearhead the FAH’s combat element, augmented by 9 EMB-312 Tucanos. Economic difficulties and the ravages of time have taken their toll on the serviceability of aircraft and it is believed not more than three to five F-5s and maybe three to six A-37s remain serviceable.9

    It should be noted that the helicopter element of the FAH is almost entirely of US manufacture with Bell UH-1s, Bell 412s and Hughes 500 types predominating. The transport force is small with a solitary C-130 and IAI Arva being the most significant assets. Three Let L-410s and two each, of the Cessna 208 and Turbo Commander families provide a light transport capability.

    Combat Experience

    This potent force saw limited action against the Nicaraguan Air Force of the 1980s (the Fuerza Aerea Sandinista – FAS as it was then known). In support of Contra rebels, the F-5s shot down a FAS Mi-17 helicopter while the Super Mysteres accounted for one FAS Mi-8 and damaged a FAS Mi-24.

    The 1980s also saw the emergence of the narcotics trade as a major security challenge to Honduras and the rest of the region. The FAH took the lead in aerial interdiction efforts with a Super Mystere shooting down a narcotics transporting DC-3 on 9th March 1983 and a CASA C-101 trainer (a type now in storage) downing a C-47 on 9th March 1987. This policy found favour with the United States from the 1980s to about 2001, but the shooting down of a civilian aircraft by the Peruvian air force leading to the death of a US missionary and her infant led to a rethink on the part of the United States.10

    Cessation of Cooperation

    In January 2014, the Honduran National Congress approved a law which would permit the shooting down of suspected drug-trafficking aircraft. 11 The “Law on Protection of Air Spaces”, as it is named, sought to establish an exclusive aerial zone in certain Caribbean provinces of Honduras that are known as entry points for narcotics consignments and limit nocturnal flights throughout the entire country.12

    This law brought Honduras into contention with the United States and led to a cessation of active support for the Honduran air force. In 2012, the shooting down of two suspected narcotics flights had led to the suspension of US radar support for the FAH efforts to intercept such flights.13 The 2014 law brought about a harsher US reaction. While the sharing of radar data and intelligence was stopped once again, the United States began to actively hinder Honduran efforts to upgrade and overhaul its aircraft, with Israel being forced to abandon a USD 30 million contract to repair the FAH’s F-5 fleet.14

    Hopes Pinned on a Change in Administration

    Honduras is no longer reliant on US radar data for intelligence on narcotics flights. In 2016, the FAH took delivery of the last 3 Elta radars – one primary and two secondary – which the country ordered from Israel in 2014.15 However, given the overwhelming preponderance of US equipment in the FAH’s combat and helicopter fleets, US cooperation is still needed to enable the repair, overhaul and upgrade of these aircraft.

    Honduras is a member of the F-5 Technical Coordination Group which should enable an easier process for the repair of the aircraft but US permission is needed for third parties to undertake anything more than the most basic maintenance of the aircraft.16 The United States enforced this requirement for permission in a stringent way, leading to Honduras experiencing difficulties in availing itself of earlier Brazilian and Israeli offers to overhaul and upgrade its fleet.

    The 2016 agreement with Israel, however, – covering the repair, refurbishment and upgrade of 10 F-5s, 10 A-37s, 9 Tucanos, 6 Bell UH-1s, 6 Bell-412EPs and 2 Hughes 500Ds -comes at a time when there is a change in Administration in the United States.17 Two factors may weigh in to assist Honduras in ensuring that the United States does not stymie this effort. The first is the fact that the Secretary for Homeland Security, retired General John Kelly – former head of US Southern Command (SOUTHCOM), was a scathing critic of the Obama Administration’s policy towards Latin America.18 In his capacity as head of SOUTHCOM, Secretary Kelly consistently advocated a greater military response to interdicting the illegal narcotics trade and bemoaned the inadequate resources the US allocated to the task.19 In his former capacity, Secretary Kelly was also very appreciative of the 98% reduction in drug flights achieved by Honduras after the 2014 “Law on the Protection of Air Space” took effect.20 This may mean that the United States may be more favourably disposed towards Honduras and its robust shoot-down policy.

    The second factor is the close political and personal relationship that Donald Trump has with Israeli Prime Minister Benjamin Netanyahu. The personal investment the latter has made in these high-profile contracts with Honduras may compel the Israeli Prime Minister to lobby the Trump Administration to giving the requisite approvals for the contracts. Should this happen, it would augur well for Israel’s efforts to rejuvenate the FAH which would see it maintaining and reinforcing its position of primacy among the air arms of Central America.

    Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.

    Israel, Caribbean, Military Modernisation, Defence Eurasia & West Asia, Military Affairs https://idsa.in/system/files/thumb_image/2015/israel-air_0.jpg IDSA COMMENT
    Is a Border Fence an Absolute Essential along the India-Myanmar Border? Pradeep Singh Chhonkar February 06, 2017

    Regulated borders with greater emphasis on developing people-to-people contact and cross-border trade initiatives are likely to yield greater security benefits as against a closed border.

    The construction of border fence by Myanmar has led to resentment among the people on both sides of the Indo-Myanmar border. The affected people mainly are Konyak, Khiamniungan and Yimchunger Nagas who inhabit the areas of Eastern Nagaland in India and the Naga Self Administered Zone (NSAZ) in Myanmar. The formation of Myanmar as a separate State in 1935 and decolonisation of the sub-continent in 1947 divided ethnic communities living along the Indo-Myanmar border. These communities, particularly Nagas, found the newly created boundary to be inconsistent with the traditional limits of the region they inhabited. And they felt a deep sense of insecurity because they became relegated to the status of ethnic minorities on both sides of the border. To address their concerns and enable greater interaction among them, the Indian and Myanmarese governments established the Free Movement Regime (FMR), which allowed Nagas to travel 16 kilometres across the border on either side without any visa requirements.

    The people living in the Eastern districts of Nagaland and in the areas of NSAZ in Myanmar have close family ties and engage in cultural and economic exchanges. In some instances, the imaginary border line cuts across houses, land and villages. People, especially those living on the Indian side, own land holdings including cultivated lands and forested areas across the border and are completely dependent on such areas for their livelihood. From the Myanmar side, a lot of villagers come to the Indian side to buy basic essentials. Taking advantage of the FMR, a sizeable number of students from NSAZ also study in schools on the Indian side of the border.

    The four border districts of Eastern Nagaland – Mon, Tuensang, Kiphire and Longleng – are extremely remote and backward mainly due to lack of development and neglect by successive state governments. Mon district and corresponding areas across the border are mainly inhabited by the members of the Konyak tribe. Konyaks have the maximum representation in the population of Nagaland and also have substantial numbers within NSAZ. About three fourths of the total population of Khiamniungan tribals reside in NSAZ with the remainder being present in Tuensang district. The Yimchungers straddle the border areas with a sizeable presence in the Kiphire and Tuensang districts of Nagaland.

    The ongoing activity of fence construction by Myanmar, which the locals perceive as being carried out with the concurrence of Indian authorities, has triggered apprehensions among the people living on either side of the border. They contend that the border fence would deprive them of the produce from their land and forest resources, which spread out on both sides of the border. From the security perspective, possible anti-establishment sentiments that could flow from such apprehensions, if unaddressed, could reinvigorate the presently weakening Naga insurgency in the region. An aggravation of this issue at a time when peace talks between the central government and the National Socialist Council of Nagaland (NSCN-IM) are being held in a congenial atmosphere may fuel discontent.

    It is pertinent to note that the region presents serious security challenges. The FMR has been misused by locals to smuggle contraband in their head loads, which are not subject to inspection. Militant groups have been using the porous border for moving cadres and war-like stores. Along with other active Indian insurgent groups, the NSCN-Khaplang (NSCN-K), which had unilaterally abrogated the ceasefire with the Government of India (GoI) in 2015, maintains its camps and training bases in NSAZ. All these groups have benefited from the open border in terms of carrying out illegal activities including launching strikes against Indian security forces and returning to their safe havens in Myanmar. China has also been reportedly aiding some of these groups. Indian insurgent groups in the region are also known to collaborate with Myanmarese insurgent groups like the United Wa State Army (UWSA), Kachin Independent Army (KIA), among others.

    Policing such a large area marked by harsh terrain and dense forest is difficult. The attempt to create physical infrastructure to secure the border in the midst of the prevailing public resentment presents a real challenge. Suitable measures aimed at addressing the people’s concern on the Indian side as well as on the other side in collaboration with Myanmarese authorities therefore need to be initiated in order to establish trust and confidence amongst the affected populace. Tripartite talks involving the local stakeholders (through the concerned state government), the Myanmarese government and the GoI could be organised to address extant concerns. Socio-economic initiatives on either side of the border aimed at benefitting the local inhabitants by alleviating poverty and bringing greater development in the region could be worked out. A mutually acceptable arrangement addressing the security concerns of both the countries with minimum discomfort to the local inhabitants would be prudent.

    The GoI on its part could provide an assurance that no construction of border fence will be undertaken on the Indian side without taking the affected population into confidence. This is pertinent given that in March 2003 the GoI, in consultation with its Myanmarese counterpart, had attempted to erect a fence along the India-Myanmar border in Manipur. However, the work had to be stopped due to protests by local communities. It is therefore essential that the pros and cons on the requirement of border fencing in this region need to be deliberated upon in order to weigh the impact of action taken vis-a vis corresponding benefits accrued in the context of regional security and India’s ‘Act East’ policy initiatives.

    In case national security concerns dictate the necessity of constructing a fence along the India-Myanmar border, options such as selective fencing, better use of technology, and regulated flow of cross-border movement, among other initiatives, can be examined. It is however essential to take into confidence the affected populace and the local stakeholders prior to the finalisation and implementation of such plans. Regulated borders with greater emphasis on developing people-to-people contact and cross-border trade initiatives are likely to yield greater security benefits as against a closed border that may lead to a disturbed security environment amidst popular discontent.

    Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.

    Border Management, India-Myanmar Relations, Northeast India, Nagaland Terrorism & Internal Security, South Asia https://idsa.in/system/files/thumb_image/2015/border_1.jpg IDSA COMMENT
    Is Turkey Heading Towards a Presidential System? Md. Muddassir Quamar February 03, 2017

    The Turkish republic stands at a crucial juncture today. The latest constitutional amendment will change Turkey’s 94-year old parliamentary system of government. As the constitutional amendment bill awaits referendum, serious questions arise about the direction in which Turkey is heading.

    On January 21, 2017, the Turkish Parliament passed a constitutional amendment bill with 18 articles to change the system of government. The bill proposed by the ruling Justice and Development Party (AKP) and supported by its new-found ally, the Nationalist Movement Party (MHP), received 339 votes in favour in the 550-member parliament, clearing the required threshold of three-fifths (330) majority. If approved in a referendum, to be held within two months of presidential approval, the constitutional amendment will effectively convert Turkey into a presidential system of government. Media reports suggest that the referendum date will be announced shortly and is expected to be held in early April.

    The procedure followed by the government to pass the amendment bill in parliament has come in for criticism from various quarters. Parliamentary debates have been marred by controversy, with the opposition and government members getting into shouting slugfests and brawls over various clauses. The first round of debates led to some changes in the draft bill, which were approved by a parliamentary committee in December 2016. The new draft bill was again presented for debate in the parliament, leading to final approval on January 21.

    The proposed amendment has left the Turkish polity deeply divided. Opposition parties, especially the Republican People’s Party (CHP), which is the oldest political organisation in Turkey and currently the second largest after AKP, and the pro-Kurdish People’s Democratic Party (HDP), have vehemently opposed the bill accusing the ruling AKP of pushing for a one-man rule. It has been argued that, if approved, the new system can give President Recep Tayyip Erdoğan an opportunity to be elected for two more terms. His current term ends in 2019 and the new system will become effective the same year. Given its provision for two five-year terms, if Erdoğan wins, he can effectively rule Turkey until 2029.

    On the other hand, the ruling AKP and its ally MHP have argued that the old system of governance has rendered Turkey unstable and hinders decision making and economic growth. The pro-amendment parties argue that a presidential system will provide the needed stability and a strong government that can take the country on the path of fast development. It has been presented as a pill that will cure Turkey of all its ills.

    However, the concerns of the opposition and many intellectuals have become accentuated with the streak of recent developments. The AKP Government has taken measures that many believe is authoritarian in nature and scuttles Turkey’s democratic ethos. Though the AKP has been in power since 2002, it had started taking tough stand against the opposition after the Gezi Park protests erupted in mid-2013. Inspired by the Arab Spring protests, the demonstrators initially demanded the rollback of a government proposal for an urban redevelopment plan. However, the protests gradually evolved into a movement against the AKP government’s failures and solicited a strong response from then Prime Minister Erdoğan leading to police action and violence.

    The political situation sharpened thereafter due to declining popular support for AKP. Though Erdoğan was elected president in the first direct presidential election held in August 2014 with a simple majority, winning 51.7 per cent of the votes, opinion polls showed that the AKP was losing popular support in the run up to the 2015 parliamentary elections. Expectedly, the AKP lost its parliamentary majority in the June 2015 general elections, gaining 40.8 per cent of votes and 258 seats, 18 less than the required simple majority of 276. As coalition talks failed, a snap election was held in November and the AKP surprisingly won a majority with 49.5 per cent of popular votes, getting 316 seats in parliament. The ‘shocking’ election results were largely attributed to Erdoğan’s tough stand against militant Kurdish Worker’s Party (PKK) and Turkey’s perceived strong action in Syria.

    In fact, in the lead up to the snap elections, the peace negotiations with the PKK that started in March 2013 broke down leading to escalation in violence. It led to a strong action by the police against the PKK and its sympathisers. Further, action was taken against those perceived to be opposing the government’s action. While the election campaign was at peak, a crackdown on the media and civil society gave a glimpse of the days to come. The government took action against pro-opposition journalists and media houses. In October 2015, many media firms were shut down while journalists critical of AKP policies were fired or arrested.

    The crackdown became frequent and massive after the failed coup in July 2016. An emergency was imposed initially for three months and has now been extended until early April 2017. Analysts have argued that the coup has provided a license for Erdoğan to target his opponents, with many pro-Kurdish opposition leaders and journalists, academics and intellectuals being fired from their jobs or forced to leave the country. The purge in the military, civil services and judiciary and even in universities has continued in the name of action against supporters and sympathisers of the Gulenist movement that has been accused of plotting the coup. Thousands of soldiers and civil servants have been fired and hundreds are under trial.

    The constitutional amendment will change Turkey’s 94-year old parliamentary system of government, which it has been following since the foundation of the republic in 1923. Erdoğan’s increasingly authoritarian behaviour and the fact that the new system places extraordinary powers in the president, especially in appointments of constitutional and administrative functionaries, raise serious doubts about Turkey’s slide into an autocracy. AKP’s inability to address economic downturn and political problems and targeting of critiques, are a further cause of worry. The Turkish republic stands at a crucial juncture today. As the constitutional amendment bill awaits referendum, serious questions arise about the direction in which Turkey is heading. At the heart of the concern is, the new system might undo the democratic gains made over the past decades.

    Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.

    Turkey Eurasia & West Asia https://idsa.in/system/files/thumb_image/2015/turkey-1_1.jpg IDSA COMMENT
    President Trump and the Mexican Border Wall Gautam Sen February 03, 2017

    The reaction to President Trump’s utterances and avowed policies on the Mexican border wall and tariff has attracted strong criticism. It is surprising that Trump, who is known to view developments and decide on policies in transactional terms, appears short-sighted and unwilling to view the implications of his policies in a long-term perspective.

    The new President of the United States of America (USA), Donald Trump, seems to be intent on fulfilling his campaign pledge to erect a wall along his country’s border with Mexico to stall further illegal immigration from Mexico and other Latin American countries. On January 25, 2017, Trump signed an executive order for constructing a wall along the US - Mexico border stretching 3100 kms. Trump also demanded that Mexico bear the cost of the proposed wall. These announcements have not only caused deep consternation in Mexico, but also drawn opprobrium from Latin American leaders. An immediate casualty has been the cancellation of the first working-level visit of Mexican President Enrique Pena Nieto to the US after President Trump assumed office.

    The Mexican president has rejected outright, the demand for his country to pay for the construction of the wall, which obviously is not in Mexico’s interest. In the context of these developments, a scheduled meeting between the Mexican Foreign Minister Luis Videgara and the new US Secretary of Homeland Security John Kelly, on border management and immigration matters, has also been called off.

    The Trump Administration is reported to be considering a set of punitive measures against Mexico if the latter does not agree to defray the construction cost of the wall. President Trump has issued an executive order directing all executive branches to identify all bilateral and multilateral development aid, economic assistance, humanitarian aid and military aid to Mexico over the past five years. This is obviously to identify the areas where Mexico’s dependence on the US is considerable, and pressure on Mexico could be effectively applied to accede to the US demands and cooperate towards construction of the border wall.

    Trump also mentioned on January 26 that a 20 per cent tariff may be imposed on Mexican goods exported to the US to raise resources for building the wall. A 35 per cent border adjustment tax, in the garb of a border tax reform policy, on cross-border movement of goods has also been hinted at by the Republican congressional sources. It appears that there has been a repercussion to Trump’s threat. Ford has just cancelled a $1.6 billion automobile plant investment in Mexico. Earlier, Ford had planned to shift its Ford Focus small car plant from Michigan to Mexico which had drawn the ire of Trump. Similar pressure is building up on General Motors.

    Tariff measures of the type aimed at Mexico, are likely to affect other western hemispheric countries also. Trump also proposes to tax remittances of Mexicans, and the US citizens of Mexican origin, to Mexico. Mexico’s economy minister has retorted that his government would respond immediately to any coercive trade action by the US administration. The Mexican Government has also indicated that it would not tolerate actions planned by the new US administration on the border wall and punitive taxation on the Mexican goods, as they impinge on Mexican dignity and pride.

    Former US President George Bush had signed the Secure Fence Act in 2000 after congressional approval. The Act had approved construction of a fence along the US-Mexico border for approximately 700 of the total 1900 mile long border. As per the US Government Accountability Office (GAO), 652 miles of border fence-cum-wall has since been erected. The fence and other barriers that cover the 652 miles of the sanctioned border project, is actually a collection of walls, fence and other obstacles. The existing border wall is effective and strongest in places where large populations are concentrated e.g. San Diego, California on the US side, and Tijuana on the Mexican side. In some places, the wall passes through barren territory, and in many parts its condition is such that people can walk through. There are also portions of the border where the terrain conditions are difficult and it is extremely difficult to cross. The fence-cum-wall has been erected at a cost of US$ seven billion, and is not exactly impenetrable. This indicates the substantial effort and resources which will have to be deployed to cover the entire length of the border in an effective manner.

    Though Trump has claimed that the erection of the wall would cost US$ eight billion, a realistic assessment is that it will be much more. Authoritative sources (like Bernstein Research Group), and the expenditure trend on the approximately 652 miles of wall-cum-fence constructed, indicate that actual cost of the entire border wall project will be in the range of US$ 15 - 25 billion. If the above-mentioned details are taken into account, the effort and expenditure on the border wall will be substantial, apart from the political and socio-economic fallout on American citizens in its southern border states like California, Arizona, New Mexico and Texas, as well as on its relations with Mexico. Republican Senator John McCain of Arizona has expressed deep concern on the proposed border wall and its serious implications on trade relations with Mexico, and also consequent economic consequences on his state of Arizona and the country as a whole. Republican Senator Lindsay Graham of South Carolina, has tersely observed that ‘border security yes, but tariffs no’.

    The reaction to Trump’s utterances and avowed policies on the border wall and tariff has attracted strong criticism from the Latin American governments. In the January 2017 summit of the Community of Latin American and Caribbean States (CELAC) at Punta Cana in Dominican Republic, attended by ten heads of state and 33 foreign ministers, the consensus was that the Trump administration`s action was outrageous, and the CELAC group of countries have to respond to the new aggressive policy of prosecuting migrants. President Danilo Medina of Dominican Republic – the host country - and Rafael Correa of Ecuador took the lead in consolidating the CELAC countries’ position against Trump’s policy on the Mexican border wall – which they termed as a ‘wall of infamy’ , his anti-immigration plan and threat of escalated tariff.

    Though the stance taken by Trump is not totally unexpected in the backdrop of his pre and post election utterances, it is surprising that he is rushing through his controversial policies soon after taking office. Actions which the US president has proposed before completing a month in office and even before delivering his first State of the Union Address, appear to indicate that he intends to take a posture of resoluteness on controversial issues, such as the US-Mexico border management and trade, in order to consolidate his domestic constituency. This forebodes political turbulence within the US, apart from introducing many imponderables in western hemispheric economic relations, and also undermining the existing North American Free Trade Agreement (NAFTA) which has served this hemispheric community reasonably well since its formation in 1994. It is also surprising that Trump, who is known to view developments and decide on policies in transactional terms, appears short-sighted and unwilling to view the implications of his policies on his country`s economy and international influence in a long-term perspective.

    Mexico is the third largest import source and trade partner of the US. Mexico is also the second largest export market, and the third largest agricultural export market of the US. The Mexico-US trade is more than US$ 583 billion (US imports: $316 billion + exports $267 billion: as per 2015 US Trade Representative Office data), and the US foreign direct investment in Mexico is more than US$ 107 billion. It is not clear whether Trump has weighed the impact of a higher tariff barrier on Mexican exports to the US, and the consequent impact on the US consumers. There would also be supply chain problems because of the cost impact on the US intermediate components that are exported to Mexico, value-added there and re-exported to US, which would be affected by the proposed escalation in tariff.

    Any constriction in Mexican exports and supply-chain problems, would have a huge negative impact on the US industry and its labour market. The US industrial goods sector, automobile market and even its agriculture, would be affected. Interestingly, the US upper middle country, mid-west and the southern states – the ‘rust belt’ which had voted overwhelmingly for Trump in the last presidential elections, would be impacted the most. This is because, Mexico would definitely retaliate by imposing countervailing tariffs on the US exports, particularly those which are leviable on goods to be imported and exported after value addition in Mexico. Mexico is also likely to raise tariffs on agricultural imports from the US of corn, dairy products, pork and beef estimated at more than $18 billion, which in turn will affect consumption in Mexico and the US farming community. Mexico is also likely to resort to fiscal measures to restrict profit plough-back from the US investments.

    Trump has indicated on many an occasion that the US economy and jobs are his primary concern. The slew of actions which he is contemplating is unlikely to benefit either. A cost-benefit analysis seems to indicate that negative international repercussions and even domestic political fallout, would decidedly outweigh the economic gains which are difficult to assess at this stage.

    The author is a commentator on international affairs and a retired IDAS officer who has held senior positions in the Government of India and in a State Government.

    The views expressed are the author`s own.

    Mexico, Illegal Migration, United States of America (USA) North American https://idsa.in/system/files/thumb_image/2015/trump_1.jpg IDSA COMMENT
    Defence Budget 2017-18: Chugging Along Amit Cowshish February 02, 2017

    Budget is not just all about figures but also a statement of policy. The Defence Budget for 2017-18 contains no hint of any intention of the government to bring about a paradigm shift in the defence policy.

    Defence was not blanked out in the budget speech this time, as it happened last year, but while announcing the allocation for defence, the finance minister avoided any mention of the previous year’s allocation. Perhaps, it was for a reason.

    At Rs. 2,74,114 crore, the defence budget for 2017-18, excluding defence pensions, is only six per cent more than the comparable Budget Estimate (BE) figure of Rs. 2,58,589 crore (excluding defence pensions) for 2016-17. The increase would work out to just 5.6 per cent, if reckoned with reference to the Revised Estimate (RE). Though not unprecedented, this would be one of the lowest increases in the recent past.

    The BE allocation for defence pensions increased from the actual expenditure of Rs. 66,237.60 crore in 2015-16 to Rs. 85,625.96 crore at the RE stage in 2016-17. But for the coming fiscal, it has been increased by a paltry sum of Rs. 115 crore to Rs. 85,740 crore.

    The last year’s spurt was on account of the payment of arrears on account of one-rank-one-pension. Therefore, the seemingly paltry increase of Rs. 115 crore may not necessarily be a case of gross under provisioning but one can never tell with certainty.

    The allocation for 2017-18, excluding pensions, seems to be 1.63 per cent of the GDP and 12.77 per cent of the total central government expenditure of Rs. 21,46,735 crore. If the outlay for defence pensions is also taken into account, the total outlay would work out to 2.14 per cent of the GDP, much lower than the three per cent mark, widely believed to be the bare minimum level of allocation that must be made to meet the operational requirement of the armed forces.

    This view may be questionable but what is not in doubt is that the defence outlay for 2017-18 is prima facie uninspiring for several reasons.

    One, the increase in the capital budget does not break away from the previous trend. Out of the total capital outlay of Rs. 86,488.01 crore, a sum of Rs. 8,363.97 crore is allocated for Ordnance Factory Board (OFB), Defence Research and Development Organisation (DRDO), Directorate General of Quality Assurance (DGQA). The remaining amount of Rs. 78,124.04 crore is for the armed forces.

    The capital budget for the armed forces for the current fiscal was Rs. 78,586.68 crore, which has gone down to Rs. 71,700.00 crore at the RE stage. While the increase for the coming fiscal would be approximately 8.96 per cent with reference to the RE 2016-17, it also shows that the malady of underutilisation of capital budget continues quite unabated.

    There is no doubt that the capital budget would be sufficient for meeting the committed liabilities but, in the absence of any authentic information, it is difficult to say whether the remaining amount would be adequate for making advance payments against the contracts that are likely to materialise during 2017-18. Even so, the amount may turn out to be grossly inadequate if several big ticket acquisition programmes that have been in the pipeline were to materialise in 2017-18.

    Two, there are no clear indications of a big push being given to what could loosely be called Make-in-India in defence. For one thing, there is a very insignificant allocation under the budget head: Technology Development - Assistance for prototype development under the ‘Make’ procedure. At Rs. 30.38 crore for Indian Army and Rs. 14.55 crore for Indian Air Force, one is not sure how many projects the ministry is aiming to – or could possibly - take up under the ‘Make’ procedure during the next fiscal.

    There are great expectations from the scheme for financing technology development from the Defence Technology Fund, recently announced by the ministry. However, it is not clear if any corpus has been created for this fund, or any allocation made, for providing budgetary support to technology development programmes.

    Three, there has always been a hand-to-mouth situation under the revenue segment of the budget, most of which is taken up by pay and other obligatory expenditure on ration and clothing, etc. This impacts the allocation under budget heads which have a direct bearing on operational preparedness.

    The most important of such budget heads is the minor head ‘Stores’ in respect of all the three services and ‘repairs and refits’ in respect of the Indian Navy. These budget heads cater for expenditure on buying ammunition and other ordnance stores, including spares, for carrying out maintenance and repair of the in-service equipment.

    Army’s allocation under ‘stores’ has come down from BE 2016-17 of Rs. 17,728.18 crore to Rs. 17,487.78 crore for the coming fiscal. For the Indian Navy, the BE allocations for the current and coming fiscal under this head remain constant at Rs. 4,488.00 crore. So does the allocation for the Indian Air Force, which remains static at Rs. 7,334.05 crore. The allocation for repairs and refits of the ships, submarines and other naval vessels also remains constant at Rs. 865.00 crore.

    This could be a cause for concern, especially for the Indian Army, which has been struggling to make up its war wastage reserves of ammunition and other warlike stores.

    Four, last year the Standing Committee on Defence had recommended outcome-oriented allocation for, and monitoring of, expenditure on important acquisition schemes. There is no indication of any movement towards achieving this goal. To be fair, a final judgment on this count will have to wait till the presentation of the detailed demands for grant by the ministry of defence.

    Five, it is quite evident that the coming year will see little movement on issues, such as creation of cyber, aero-space and integrated theatre commands, or a spurt in research and development activities, all of which are critical for India to keep in step with the developments in its neighbourhood and beyond. The budget, which is not just all about figures but also a statement of policy, contains no hint of any intention of the government to bring about a paradigm shift in the defence policy.

    In the event, the announcement by the finance minister of a Centralised Defence Travel System for online booking of travel tickets and web-based interactive Pension Disbursement System for defence pensioners could well be the proverbial silver lining on the horizon.

    Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.

    Defence Budget, India, Defence Industry, Defence Management Defence Economics & Industry https://idsa.in/system/files/thumb_image/2015/defence-budget-2017.jpg IDSA COMMENT
    Defence Budget 2017-18: Beyond the Numbers Amit Cowshish January 30, 2017

    There is a need to go beyond stale issues and have a more meaningful and dispassionate discussion on how to make the best use of the allocations made for defence.

    With the presentation of the annual budget for the next fiscal being just a few days away, there is no point in second guessing the size of the defence appropriation. Even so, it would be pretty safe to rule out any extraordinary hike in the allocation.

    In last year’s medium term fiscal policy statement, the finance minister had mentioned that total defence expenditure, including the capital component, is estimated to be about 1.6 per cent of GDP in 2017-18 and 2018-19. Unless there is a huge spurt in GDP and reduced pressure from competing sectors allows sufficient elbow-room to the finance ministry, the defence budget is likely to grow by about 11 to 12 per cent over the Revised Estimate (RE) for the current fiscal, in keeping with the trend.

    In that likely event, the same old issues that dominate the discourse on India’s defence budget are bound to resurface. Among them is the unrealistic demand that the defence budget be pegged at three per cent of GDP. Other issues include the idea of creating a non-lapsable pool of funds to conserve unutilised funds (especially under the revenue segment of the budget) which otherwise lapse at the end of the financial year in accordance with the government’s system of accounting. Further, the demand for ‘integration’ of the services headquarters with the ministry is bound to resurface with greater vigour. This is seen as a bulwark against the wily bureaucracy, which was recently uncharitably described as ‘feckless’ by a former naval chief.

    The civilian bureaucracy, especially the bad boys of the finance division, are seen as the biggest hurdle in the swift processing of capital acquisition proposals and as responsible for derailing other demands, including one-rank-one-pension. Such a characterisation is grotesque, not least because it betrays a lack of dispassionate understanding of what ails the system and the tendency to discredit institutions.

    Concerns will also be expressed about inefficient procurement procedures, inefficiency of the DRDO, Defence PSUs and ordnance factories, delay in introducing the strategic partnership model, the discriminatory treatment meted out to the private sector, and, above all, delay in appointment of the Chief of Defence Staff.

    These issues, some of which are undoubtedly relevant, have gained greater legitimacy because of the Standing Committee on Defence joining the chorus. The counter-narrative is routinely ignored, if not deliberately suppressed.

    Take, for example, the question of pegging the defence budget at three per cent of GDP. The defence and finance ministries have been of the view that the ‘co-relation of defence expenditure with GDP is just an indexation and has no bearing on defence preparedness’ or ‘to safeguard the interest of the country’. Even on practical considerations, the past trend and the various demands on finances, it is highly optimistic to expect that to happen. But these views were summarily rejected by the Standing Committee – and continue to be rejected by others – without pointing out why they are flawed and, more to the point, suggesting how this objective could be achieved.

    Or, take, for example, the question of creating a non-lapsable pool of funds to conserve the unutilised allocation. The popular narrative is that this will solve many a problem but that it is not being accepted because the archaic ‘rules of business’ framed during the British Raj do not permit it. Nothing could be farther from the truth. First of all, unutilised balances are not held in cash. Even if a non-lapsable fund were to be created for rolling over these balances, the government will have to raise matching resources in the year in which these funds would be utilised. And, in any case, such an appropriation will require parliamentary approval.

    All this can be found in various reports of the Standing Committee, along with what could be a startling revelation for some that, while the ministry of finance had agreed to the setting up of such a fund, ‘the Ministry of Defence, for reasons best known to them, asked us (the finance ministry) not to set it up’. This was more than a decade ago.

    It makes little sense to borrow money only to hoard it, especially against the backdrop of repeated under-utilisation. More to the point, there are no ‘rules of business’ which come in the way. After all, we do have a non-lapsable pool of funds for the North Eastern Region. Yet, the narrative persists.

    There is little discussion on how the integration of the service headquarters will pan out and what it will achieve. In fact, the underlying assumption in all this is that everything will fall into place once the civilian bureaucracy is replaced by the military bureaucracy since this will replace the perceived malady of ‘bureaucratic’ control of the armed forces with ‘political’ control.

    For one thing, there is large scale delegation of administrative and financial powers down the line to the services, which undoubtedly need to be enhanced. Consequently, there is little interference in the day-to-day functioning of the armed forces by the MoD. There is little, if any, control that the MoD exercises especially in budgetary matters. It does not even have the time and the wherewithal to scrutinise the requirement of funds projected by the services and other departments.

    That the armed forces do not get as much as they ask for is not because of the inability of the civilian bureaucracy to effectively plead the case before the finance ministry in the run up to the budget formulation, as many believe. It will be surprising if any ministry or department of the government gets whatever it asks for. Allocations depend on the ability of the government to raise enough resources and not bureaucratic machinations.

    The post of Chief of Defence Staff, or permanent chief of the Chiefs of Staff Committee, is seen as a panacea for various ills besetting the defence establishment. He – and hopefully a she someday – might just be able to bring about greater jointness in planning and prioritisation of procurement, among other things, but cannot solve the real or perceived problem related to budgetary allocation.

    With all the complexities of the procurement procedures, the MoD has been able to spend more than Rs. 5 lakh crore since 2002-03 on capital acquisitions, although around Rs. 50,000 crore was also under-spent during this period. This is not a small sum, but the point is whether the underutilisation is primarily, or largely, on account of procedural complexities.

    It will be astonishing indeed if, after several revisions of the procurement procedure based on feedback from a cross-section of stakeholders, that the procurement procedure continues to be needlessly complex or even archaic. It is significant that the committee of experts set up by the government in 2015 did not recommend any drastic change in the basic architecture of the procurement procedure. There is always room for improvement though.

    There is a need to go beyond these stale issues and have a more meaningful and dispassionate discussion on how to make the best use of the allocations made for defence. It also calls for taking steps that do not require widespread systemic changes, as these have a tendency to get mired in conflicting views. There is a need to respect institutions and individuals and not to carry out a campaign of vilification.

    How about starting with instituting a system of outcome-oriented monitoring of important segments of the defence budget, the allocation for capital acquisition being one of them? Even the Standing Committee had recommended this last year. It will not take much effort to do so. It is also more likely to show results than a theoretical debate on micro-financial aspects of the defence budget. After all, in the words of Lao Tzu, the journey of a thousand miles has to begin with a single step.

    Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.

    Defence Budget, India Defence Economics & Industry https://idsa.in/system/files/thumb_image/2015/defence-budget.jpg IDSA COMMENT
    BEML Disinvestment: What about the other DPSUs and OFs? Laxman Kumar Behera January 20, 2017

    The BEML model of disinvestment needs to be applied to the rest of the Defence Public Sector Undertakings as well as Ordnance Factories.

    The Cabinet Committee on Economic Affairs (CCEA) has taken a major decision to privatise some government-owned companies. One of the companies listed for privatisation is BEML (formerly named Bharat Earth Mover Ltd., which functions as one of the nine Defence Public Sector Undertakings (DPSUs) under the administrative control of the Department of Defence Production of the Ministry of Defence (MoD). As per the CCEA’s in-principle approval, 26 per cent of BEML’s equity shares would be sold to a strategic buyer, bringing down the government’s share in the company from 54.03 per cent currently to 28.03 per cent. The offloading of the government’s equity shares in BEML, which would simultaneously involve the transfer of management control from the government to the ultimate buyer, is likely to bring in an estimated Rs. 1,000 crore to the central exchequer. In the light of this unfolding development, two questions arise: What is the significance of BEML’s disinvestment? Is it a one-off affair or should the government disinvest in other production entities functioning under the MoD?

    The significance of the BEML’s strategic disinvestment lies in the fact that it would be the first time that the MoD will lose management control over one of its own companies. This is pertinent given that some perceive DPSUs to be too strategically important to be owned by the private sector. It may appear that the singling out of BEML for disinvestment could be due to the company’s dwindling exposure to the defence market post the controversy over the purchase of Tatra trucks. In 2015-16, the defence business (consisting primarily of sale of high-mobility vehicles) contributed a mere 11 per cent (as opposed to nearly 30 per cent a decade before) of BEML’s total gross revenue of Rs. 3426.02 crore. With such a low exposure to defence, the company’s rightful claim to be a defence company had come under question. The decision to privatise the company through the route of strategic sale instead of shifting it to another ministry, (as was done in case of loss-making Hindustan Shipyard Ltd., which was acquired by the MoD from another ministry), conveys the strong message that the government believes that it has no business in business.

    It is worthwhile to note that BEML’s privatisation is not related to its performance. Unlike some other DPSUs, BEML is a highly competitive company, with 88 per cent of its sales in 2015-16 coming through the open tendering process. Besides, the company has a good track record of generating profits; it has registered a profit in 15 of the last 16 years. Poor performance of commercial entities, which had been the main driver of disinvestment decisions in the past, is not the main criterion for the government’s decision to disinvest in BEML.

    Should the government now follow the BEML decision and move towards disinvesting in other defence production entities? The unambiguous answer is yes. DPSUs and Ordnance Factories (OFs) are the part of the larger set of Central Public Sector Enterprises (CPSEs) and other departmentally run production entities. These have outlived the utility of the Nehruvian model of industrialisation, under which the Government of India assumed the role of the largest industrialist in the country. But the running of businesses by the government has been accompanied by bureaucratic, administrative and decision-making inefficiency, manifested in the poor performance of these companies, including DPSUs and OFs. In fact, as suggested by the 1991 Statement on Industrial Policy, the CPSEs, given their inefficiency, have become a drag on the Indian economy.

    Measured in terms of innovation, productivity, exports and customer satisfaction, the performance of DPSUs and OFs has been anything but encouraging. Some statistics testify to this sorry state of affairs. The combined R&D expenditure of the DPSUs, an indicator of their innovation performance, is a mere five per cent of their turnover. In the case of OFs, it is less than one per cent. Compared to this, some global companies spend up to 20 per cent of their turnover on R&D. Given such a poor focus on R&D, it is not surprising that they have designed and developed very few products. The average labour productivity of DPSUs is less than one-fifth of that of major global defence companies. Exports, a measure of international competitiveness, accounts for a meagre five per cent of their sales, whereas many international companies generate over 70 per cent of their revenues from international customers. The 40-odd OFs, which employ more than 95,000 workers, do not meet even 50 per cent of the product target set for the Indian Army, leaving a big hole in the latter’s preparedness.

    More importantly, DPSUs and OFs have not succeeded in their primary mission of making the country self-reliant in defence procurement. Instead, they have become a conduit for large arms imports, albeit indirectly. This indirect arms import is made in the form of purchase of parts, components and raw materials from the international market and for which a large amount of foreign exchange is incurred. In just five years ending 2014-15, the nine DPSUs spent a whopping Rs. 78,740 crore on indirect imports, which amounts to nearly three-fifths of their total sales.

    The only way that these entities can be made to function better is by putting them under an efficient management. And that can be achieved only through privatisation. The BEML model of disinvestment needs to be applied to the rest of the DPSUs. For the privatisation of OFs, the first thing that needs to be taken is to convert them from their present avatar of being a departmentally run organisation to a corporate entity. Disinvestment in these entities will not only make them function efficiently and contribute to the country’s self-reliance efforts but also enable the government to generate resources for meeting the fiscal deficit target as well as fund the critical modernisation requirements of the armed forces.

    Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.

    Ordnance Factories, Defence Industry Defence Economics & Industry https://idsa.in/system/files/thumb_image/2015/beml.jpg IDSA COMMENT
    The Decline of the Cuban Armed Forces Sanjay Badri-Maharaj January 18, 2017

    While the Cuban armed forces are but a shadow of their former self with unserviceable equipment and massive reductions in personnel strength, the country still retains combat capabilities far in excess of any of its Caribbean neighbours.

    Prior to the collapse of the Soviet Union in 1991, the Cuban armed forces (Fuerzas Armadas Revolucionarias - FAR) were easily the most powerful in Latin America. Numbering over 200,000 active personnel, the FAR possessed several hundred advanced combat aircraft (MiG-21s, MiG-23-MF/-ML/-BN) and MiG-29s, along with a modern and well-equipped air defence network. The army possessed large quantities of artillery and over a thousand T-55 and T-62 main battle-tanks (MBTs), while the navy fielded three submarines, three frigates, 13 missile boats and 48 patrol craft.

    Some 25 years after the demise of its ally, benefactor and largest market for its principal export (sugar), the FAR is but a shadow of its former self with equipment either unserviceable or in storage and personnel strength slashed to some 65,000. From a force potentially capable of fighting determinedly against an American invasion, the FAR has now become a force of limited conventional military capability, more useful for internal security operations than for prosecuting any military conflict.

    None of this should be unexpected as the FAR was always an unsustainably large force which, while seeing extensive combat in Angola, Mozambique and Ethiopia, was largely an instrument of Soviet foreign policy. With the risk of an American invasion neutralized by friendship with the Soviet Union, the FAR was expanded to the point of extreme excess – being incapable of defending against a US invasion unaided yet vastly superior to any of its neighbours. Once support from the Soviet Union ended, the decline of the FAR was inevitable. All three formations – the army, the air force and the navy – achieved great strength in both equipment and personnel by the late 1980s but their fall was rapid.

    The Revolutionary Army (Ejercito Rebelde - ER) had modest beginnings. With a 1959 strength of 25,000 (supported by a Revolutionary Militia of 250,000), the ER initially used an eclectic mix of European and American equipment supplied to the Batista regime, including Sherman and Stuart tanks along with M116 75mm pack howitzers and Schneider 75mm field and mountain guns. Infantry units were almost entirely equipped with American small arms with support weapons, such as mortars and machine guns coming from Europe as well as the United States. There was no immediate shift to the Soviet bloc as the first arms orders placed by the Castro regime were for 24,000 FN-FAL rifles, 15 British Comet tanks and Oto Melara Model 56 105mm howitzers.

    This changed in 1960 when the first influx of Czechoslovak and Soviet arms began entering service. The expansion of the ER was rapid and by 1975, it reached its peak strength of 200,000 divided into three regional armies with three armoured and 15 infantry divisions. Though the ER fell to some 130,000 by the mid-to-late 1980s, it now possessed some 800 T-54/-55 and 380 T-62 tanks plus well over 500 armoured personnel carriers of the BTR and BMP families with 1400 pieces of artillery. Over 30,000 Cuban troops played a pivotal role in Angola supporting the MPLA against UNITA and the apartheid regime of South Africa.

    The Cuban Air Force – now termed the Revolutionary Air and Air Defense Force (Defensa Anti-Aérea Y FuerzaAéreaRevolucionaria - DAAFAR) experienced even more spectacular growth. Even at the time of the 1961 Bay of Pigs invasion, the air force was still equipped with ageing relics from the Batista era with T-33 trainers being the most advanced equipment and eight Sea Fury piston engine fighters and a similar number of B-26 bombers forming the bulk of the combat force.

    The expansion of the DAAFAR was dramatic and by the mid-to-late 1980s, it had taken delivery of no fewer than 118 MiG-21s and 89 MiG-23s of all variants augmented by eight MiG-29s and a large force of light transport aircraft, Mi-8 and Mi-24 helicopters – easily the most powerful air force in the region. Though possessed of no bombers, the threat of DAAFAR MiG-23BNs was deemed serious enough for the United States to sanction the supply of 24 F-16As to Venezuela to protect their oil-fields. DAAFAR was also responsible for operating the most extensive surface-to-air missile (SAM) network in Latin America with SA-2, SA-3 and SA-6 medium range SAMs being augmented by mobile SA-13 and SA-8 systems and well over 1000 towed and self-propelled anti-aircraft guns. The DAAFAR also saw extensive service in Africa with operations in Angola, Ethiopia and Mozambique.

    In contrast to the ER and DAAFAR, the Cuban Navy (Marina de Guerra Revolucionaria - MGR) was far less favoured. The Batista-era Navy of three Tacoma class frigates, two PCE class corvettes, four SC-class submarine chasers and three torpedo boats was replaced by a coastal defence force centered around 18 OSA class missile boats and an assortment of torpedo craft and submarine chasers augmented by a fleet of 40 Zhuk class patrol boats. To these were added a limited blue-water capability in the form of three Foxtrot class submarines and three Koni class light frigates. Compared to the ER and DAAFAR, the MGR trailed behind the capabilities of larger Latin American navies, though it was by far the most powerful naval force in the Caribbean.

    Since then, the decline of the FAR’s capabilities has been dramatic. Budgetary allocations inevitably fell as the Cuban economy underwent a period of extreme adjustment in the 1990s. No major new equipment has been inducted into any branch of the FAR and manpower has been slashed. The ER now comprises some 45,000 personnel including 39,000 conscripts and active reservists doing 45 day of service annually. However, compared to the DAAFAR and MGR, the ER has been able to keep much of its equipment to a reasonable degree of serviceability – partly by relegating a large portion of it to storage. Only 50 MBT’s are operational at any given time, augmented by wheeled AFVs.

    It has also shown a remarkable degree of innovation in adapting weapons systems to platforms, typified by the fitting of T-55 and BMP-1 turrets to BTR-60 chassis, fitting 122mm D-30 Howitzers to BMP-1 chassis and to trucks and adapting RBU-6000 rockets to being fired from a truck flatbed. This ingenuity, however, is no substitute for more modern equipment although the ER remains formidable by regional standards. It has been suggested that the ER is no longer capable of mounting operations above battalion level. However, this may be an underestimation of the ER’s institutional experience and while division level operations are unlikely, brigade-sized operations are probably feasible.

    The DAAFAR has been reduced to approximately 30 combat aircraft – four MiG-29s, six MiG-21s and nearly 20 MiG-23s being operational at any given time. These are augmented by about five operational L-39 trainers which can be armed for light strike and air defence duties. Aircraft are rarely seen with ordnance though in 1996, MiG-29s used R-60 air-to-air missiles to destroy Cessna light aircraft belonging to the Florida-based, Cuban-exile run organization ‘Brothers to the Rescue’. It is believed that flying hours are restricted although it is clear that some degree of competence is retained by a nucleus of pilots. Cuba retains its SAM network although it is unclear if an overhaul of the missiles has been undertaken. The DAAFAR’s helicopter and transport fleets have been reduced massively with only 24 helicopters and two transport aircraft being operational at any given time. It should be noted that a large number of combat aircraft are in storage and some may be capable of being restored to service.

    The decline of the MGR mirrors that of the DAAFAR. The Koni class light frigates were scrapped with two being sunk as reefs to serve as dive attraction for tourists. The submarines were decommissioned as were most of the patrol, missile and torpedo boats. A single Pauk-class corvette remains in service alongside eight minesweepers and six OSA class missile boats which have had their missiles removed and used on land-based launchers. About a dozen Zhuk class vessels remain operational along with two larger Stenka class patrol vessels.

    Cuban ingenuity came to the fore in the MGR’s efforts to restore a veneer of ocean-going capability when two 1970s vintage trawlers were converted into patrol vessels with helicopter platforms. Equipped with P-15 missile launchers from the OSA class vessels and an assortment of gun turrets scavenged from decommissioned ships and even land-based platforms (the main guns being a ZSU-57-2 turret with twin manually operated 57mm guns), these two vessels form the Rio Damuji class and lack any form of modern sensors for either surveillance or fire-control. Nonetheless, the two ships of this class provide the MGR with a useful off-shore patrol force, capable of intimidating Caribbean neighbours while being of negligible combat potential.

    The FAR, like Cuba itself, was overly dependent on Soviet support and lacked the means to finance either its maintenance or modernization requirements. While Cuba no longer faces an existential threat from the United States, it still retains combat capabilities far in excess of any of its Caribbean neighbours. It is of interest that while the FAR has been depleted in terms of capability and personnel, Cuba’s National Revolutionary Police Force (Policía Nacional Revolucionaria - PNR), Territorial Troops Militia (Milicias de Tropas Territoriales - MTT), and the Committees for the Defense of the Revolution (Comités de Defensa de la Revolución - CDR) remain powerful and adequately funded, serving as instruments of state control and power. It would appear that the Cuban government is content to preserve modest military capabilities while ensuring that its internal security apparatus is intact.

    Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.

    Cuba, Armed Forces Africa, Latin America, Caribbean & UN, Military Affairs https://idsa.in/system/files/thumb_image/2015/cuba-forces.jpg IDSA COMMENT
    Making it Palatable – Managing Food Supply in the Armed Forces Amit Cowshish January 18, 2017

    With some innovative thinking, on-line arrangements with suppliers, including the Canteen Stores Department, could reduce the cost of storage and distribution and, more importantly, help in maintaining a high satisfaction level among troops.

    Campaigning at Kairana for the forthcoming elections in Uttar Pradesh, the All India Majlis-e-Ittehad-ul Muslimeen (AIMIM) chief Asaduddin Owaisi is reported to have said: “PM Narendra Modi who applauds surgical strikes, serves boiled pulses and uncooked chapattis to soldiers.”1 He was referring to the post by a Border Security Force (BSF) jawan, deployed at the border in Jammu & Kashmir, criticising the quality of food served to them which often makes them go ‘empty stomach’. What Owaisi’s assertion, however, ignored is the fact that Prime Ministers do not serve food, even figuratively, to soldiers. And if Owaisi was referring to the PM’s overall responsibility, he obviously chose to ignore the fact that the Prime Minister’s office had already sought a report on the jawan’s complaint.2

    The penchant to exploit sensitive issues, in utter disregard of its impact on the morale of the troops, is not new in politics. But the trend seems to be on an upswing, especially with a no holds barred approach to exploiting issues connected with the armed and paramilitary forces. And it is not just the politicians who are guilty of such irresponsible conduct.

    Be that as it may, the jawan’s complaint brings to the fore yet again an issue which has dogged militaries across continents over centuries.3 Though the BSF is not a part of the armed forces, the incident prompted the Defence Minister to comment that he is personally monitoring the quality of food served to the Indian Army.4 Speaking on the side-lines of the Vibrant Gujarat Global Summit, he told reporters that during the last two years, “for the Army we have been continuously evaluating that (sic) whether satisfaction level for the food being served has increased or not. I am myself monitoring it." He went to add: "We have supplied frozen chicken to 26 centres. Now we have issued direction that in next two years FSSAI-approved frozen chicken is supplied to every unit. So that quality automatically improved."5

    But only four days later it has been reported that the food served to soldiers at high altitudes does not suit their palate. A report compiled by the Army reportedly notes that while ‘high calorie food, improvised for Indian tastes, is required to improve the operational efficiency of soldiers at high altitudes’, tinned food and ‘meals-ready-to-eat’ have issues related to shelf life and, in any case, do not cater to the Indian taste.6

    The problem may not just be confined to the food being served at high altitudes. A 2010 performance audit report of the Comptroller & Auditor General (C&AG) of India on Supply Chain Management of Rations in the Indian Army7 had pointed out several deficiencies. The general drift of the report indicated an average level of satisfaction among the armed forces with the food supplied to them.

    Another 2013 performance audit report on Storage Management and Movement of Food Grains in Food Corporation in India8 pointed out issues concerning procurement and storage of food grains. Referring to the situation depicted in this report, the defence minister told reporters at Gandhinagar that "we are improving it”. While proactive monitoring of the quality of rations supplied to the armed forces by no less than the minister himself should prevent needless pique among the troops, it is important to ensure that the feedback he receives from the troops does not get filtered at the unit level or at the higher echelons.

    A substantial amount of amount is spent on rations. A sum of Rs. 3,262.42 crore was spent in 2014-15 on fresh and dry rations, milk and milk products, tinned ration, other items and cash-in-lieu of free rations to service officers of the Indian Army. The Revised Estimate for 2015-16 was Rs. 3,578.62 crore and the Budget Estimate for the current fiscal for these items is Rs. 3,936.51 crore. These figures do not include allocation for the other two services.

    The purpose of quoting these figures is not to highlight the rising cost or to question the need to ensure the highest possible standard of food stuff supplied to the troops, but to point out that the sum involved is huge and it, therefore, requires to be managed efficiently, ensuring in the process that the food served to the troops is of good quality and according to their tastes. But the issue is not confined to providing food stuff that would appeal to the taste buds. There are other issues related to the system of procurement, storage and distribution that are equally important.

    The C&AG’s report of 20109 contained several observations which point to serious drawbacks in the system of procurement. For example, the report pointed out that the then ‘existing procedure for provisioning of dry rations failed to assess the requirement realistically’, which ‘was mainly due to systemic deficiencies due to which different quantities were worked out at different echelons applying different parameters’. Some other observations were as follows:

    1. “During the previous three years, except in the case of wheat and malted milk food in 2005‐06, none of the selected items were procured according to the indented quantity by the Army Purchase Organisation (APO). While in case of sugar and jam, there was over procurement, in all other items, there were significant under procurement which rendered the whole exercise of provisioning ineffective.
    2. “Many of the national Federations and PSUs which were contracted to supply Dal and Tea failed to supply. These had to be procured through local purchase and Army incurred an extra expenditure of Rs. 30.06 crore on account of local purchase to meet the shortage caused due to failure of central supplies.
    3. “Apart from being unwieldy the existing practice of procuring Atta by grinding of wheat purchased from Food Corporation of India (FCI) was uneconomical in comparison to the cost of branded Atta readily available in the market. The Army was incurring an estimated additional expenditure of Rs. 25 crore annually, besides maintaining a detachment of personnel at each mill.
    4. “Based on repeated extensions given by the CFL Jammu, troops in Northern Command were issued rations even after the expiry of original Estimated Storage Life (ESL). While the DGS&T instructions prohibit any extensions beyond three months of the ESL, yet Atta, sugar, rice, tea, dal, edible oil, etc. was consumed even six to 28 months after the expiry of the original ESL.
    5. “The procurement procedure for fresh items of rations was highly non‐competitive and fraught with the risk of cartels. Despite the valid registration of 110 to 222 vendors in the three selected Commands, procurement in 46 per cent of the cases was done on the basis of two quotations. In 36 per cent cases contracts were concluded on the basis of a single quotation only. A large number of vendors registered, contrasting with only one or two vendors purchasing tender documents, points strongly towards the serious problem of cartelization.
    6. “In Delhi only one vendor purchased the tender document and supplied meat worth Rs. 5 crore annually during the previous three years. Similarly in Chandimandir, only one contractor responded and bagged the contract for supply of meat with annual order values of Rs. 2.34 crore.
    7. “To determine the reasonable rates of various items of fresh rations, a Board of Officers constituted by the Station Commander determine the Average Local Market Rate (ALMR). Prior to opening of tenders, Reasonable Rates (RR) are worked out by a panel of officers for each item and station. In audit, it was seen that the accepted rates were way below the ALMR. Difference ranged from 25 per cent to 55 per cent.
    8. “While procurement rates of the adjoining stations forms a cogent benchmark for fixing of rates, a wide variation of up to 186 per cent was observed in such rates for procurement of fresh rations.
    9. “The distribution of fresh vegetables and fruits was not in accordance with the prescribed norms. In 74 per cent of issue the consuming units did not receive the rations as per the prescribed mix. More importantly, Audit also found that items received by the consuming units were different from what was shown to have been issued to the unit by the supply depot. In many cases quantities also varied.
    10. “The feedback reporting system of the Army showed that in 68 per cent cases the quality of rations was graded as satisfactory and below. This was notwithstanding the fact that “satisfactory” quality of rations was deemed unacceptable by one formation Commander. In 14 out of 50 selected cases in a Corps the quality of rations being supplied to troops was poor.”

    It is necessary to address all these systemic issues. Not much is known about what changes have come about following the C&AG’s report. While it will be unfair to assume that the matter has not received attention in the Ministry of Defence, the recent delegation of financial powers to the services10 does not seem conducive to the efficient management of logistics.

    Take, for example, the powers delegated for local procurement of items to meet the short-term and urgent requirements when supplies are not available through central provisioning. The delegated powers are as follows:

    Competent Financial Authority for Local Procurement – ASC items Power exercisable without consultation with the Integrated Financial Advisor Power exercisable in consultation with the

    Integrated Financial Advisor
    GoC-in-C Nil  Rs. 5 crore
    MG ASC Rs. 50 lakh Rs. 1 crore
    Brig ASC Corps/Area Rs. 25 lakh Rs. 50 lakh
    ADST/CO ASC Bn/Comdt Supply/ FOL Depots  

    Rs. 10 lakh
     

    Rs. 20 lakh

    This scheme of delegation of financial powers is not conducive to efficiency in meeting short-term and emergent requirements. Since it is the responsibility of the local commanders to ensure that the troops are properly fed, they are the ones who should have full powers to buy whatever is required to meet this objective without having to look over their shoulders if the cost of procurement is beyond the powers delegated to them, even if it may happen infrequently.

    There is no risk in this as the powers are exercisable as per the laid down rules and procedure, as well as subject to the availability of funds. All expenditure is also subject to post-audit by the Defence Accounts Department (DAD), which has one of the most extensive and oldest networks of local audit. This paradigm shift in the way powers are delegated is necessary to bring about efficiency in all areas of expenditure and not just in relation to procurement of food stuff.

    There are other non-conventional steps that need to be seriously considered. Among them is adopting just-in-time procurement of food stuff. On-line food and grocery stores have revolutionised the way households meet their daily requirements. With some innovative thinking, similar on-line arrangements with suppliers, including the Canteen Stores Department, could reduce the cost of storage and distribution and, more importantly, help in maintaining a high satisfaction level among troops. Ex-servicemen could play a major role in this. The Director General of Resettlement (DGR) could help them become potential on-line suppliers at the local level, not just for supplying rations but indeed for providing a wide variety of goods and services to the armed forces. Who will know the requirement better than those who have been at the receiving end of the system?

    Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.

    Indian Army, India, Armed Forces, Indian Air Force, Indian Navy Military Affairs, Defence Economics & Industry https://idsa.in/system/files/thumb_image/2015/food-indian-army.jpg IDSA COMMENT
    Decommissioned Military Hardware – A Potential Diplomatic Asset for India Sanjay Badri-Maharaj January 10, 2017

    Decommissioned Military Hardware can be gainfully be used as “gifts” in order to forge greater ties with recipient countries and potentially, make way for possible purchases of military hardware from India in the future.

    India’s efforts to increase its arms exports have, to date, met with limited success. This is not entirely surprising as India is an unknown quantity in arms manufacturing on the global scene, despite its robust domestic industry and the substantial production undertaken to date. It is noteworthy that the Republic of Korea (South Korea) has also made a serious foray into arms exports with much greater success in part because of the strategy it employed whereby decommissioned military equipment was donated to countries in South-East Asia and Latin America, refurbished and placed into service in the recipient countries. India could learn from this example as it has, in the recent past, decommissioned a number of items that could be gainfully be used as “gifts” to African and Latin American nations in order to forge greater ties and, possibly, influence in those countries.

    South Korea made gifts of F-5A fighter aircraft to the Philippines, Chamsuri class Fast-Attack-Craft to the Philippines, Ghana, Bangladesh and Timor-Leste, and corvettes of the Dong-Hae and Pohang classes to Colombia and Peru respectively. In several of these countries, South Korea was able to follow-up such gifts with sales, such as FA-50 trainer/fighters to the Philippines, KT-1 trainers to Peru and a warship to Bangladesh.

    South Korea is by no means the only country to employ such methods, with countries such as Israel, South Africa and the United States being notable examples. In the case of the former two, transfers of decommissioned equipment was usually for money, albeit at much discounted prices.

    Israel has sold decommissioned 3 Sa’ar 4 class missile boats to Chile and 2 to Sri Lanka, as wells as 2 Sa’ar 4.5 class vessels to Mexico while surplus Dabur class vessels now serve with Argentina, Chile, Fiji, Guatemala, Honduras and Nicaragua. In addition, captured, used and then decommissioned T-55 tanks, after overhaul and upgrade, were sold in their Ti-67 incarnation to Uruguay where they constitute the backbone of that country’s armoured strength.

    Israel’s exports of combat aircraft included the IAI Nesher to Argentina and later, a small number of Kfirs C.2s to Sri Lanka, Colombia, and Ecuador. In more recent times, and despite their age (over 30 years – plus time in storage), Israel was able to sell upgraded Kfirs – now to C.10 standard – to Colombia and Ecuador after overhaul and refurbishment at a unit price of USD 20 million. These aircraft now form the backbone of the Colombian air combat strength and are an important part of Ecuador’s air force. South Africa has followed in a similar vein with sales of Atlas Cheetahs – aircraft heavily based on the Kfir – to Ecuador despite the fact that each airframe was over 22 years old at the time of sale.

    The United States and the Netherlands also have a long history of supplying surplus hardware to the countries of Latin America with warships, coast guard patrol vessels, maritime reconnaissance and transport aircraft being among the principle items transferred or sold. The United States donated and/or sold significant numbers of F-5E fighter planes and Cessna A-37 attack aircraft to the countries of Central and South America but was, subsequently, unwilling to transfer any combat aircraft more modern than the F-5, except for a small number of F-16s to Venezuela and Chile. In addition, the Netherlands sold Chile a number of surplus F-16s between 2004-2008.

    With Latin American armed forces now operating an eclectic mix of aircraft, tanks and ships decommissioned from their host countries, a similar situation can be found in Africa where large numbers of tanks from the former Soviet-bloc have entered service with armies in the region. Patrol boats have been transferred from Germany, France and the United States, as well as used combat aircraft and helicopters from Russia, Belarus, Georgia and Ukraine (including 12 Su-30Ks formerly of the Indian Air Force to Angola). South Africa has sold a number of vintage Mirage F.1s (in service for some 30 years followed by a period in open storage) to Gabon and the Republic of Congo. Even Jordan has entered the fray with a sale of F-5Es to Kenya, which have subsequently seen extensive service during Operation Linda Nchi in Somalia.

    In each of these cases, the sale or gift of arms has the potential of increasing the influence of the donor/vendor country in the recipient country. The disposal of decommissioned weapons in this way thus represents a low-cost, low-risk approach towards building influence and enhancing cooperation. It is an approach that India should seek to follow with more vigour.

    India has made some tentative steps in this direction with gifts of OPVs to Sri Lanka, helicopters to Nepal, Maldives, Bhutan, and Mauritius, and, in more recent times, T-55 tanks and Mi-25 gunships to Afghanistan. However, it is suggested that India should follow the South Korean example and sell or donate surplus military hardware – and broaden the spectrum of equipment that it transfers to countries outside of its immediate neighbourhood with the intended aim of increasing its influence in those regions as well as laying the foundation for Indian arms exports in the future.

    India has a variety of products that could find eager recipients provided India does not view the arrangements as transactional. If the aim is to increase influence, India may, like South Korea, have to make gifts of hardware or offer items at very low prices in order to achieve its objectives. In addition, India must be prepared to refurbish and overhaul items before transfer. While South Korea and the United States charge fees for this – as low as USD 1 for South Korean Chamsuri class fast-attack-craft and as high as USD 8.5 million for American Hamilton class Offshore Patrol Vessels (OPVs) – Israel charges as much as USD 20 million for overhauled, refurbished and upgraded Kfir fighter aircraft. India will have to gauge its potential recipients and set prices, if sales are to be made, accordingly.

    The obvious question would be what can India offer? India’s decommissioned Vijayanta tanks could be offered either as operational combat vehicles or as a source of spares to the Nigerian army which still operates a force of similar Vickers Mark.3 battle tanks. Indian T-55s could be a welcome addition to tank forces in Uruguay, Peru and Ecuador where the T-55 is already in service. Indian Vikram class OPVs could serve as useful assets for countries in Oceania (such as Papua New Guinea), Latin America and Africa where they would join vessels of even older vintage. What is more, India has, over the decades, acquired sufficient expertise at the repair and overhaul of this equipment and possesses a stock of spares that would make the transfer of such military equipment a viable and sustainable option for the recipient countries. It should be noted that in the case of the T-55 and the OPVs, India has the respective types in service so the refurbishment and re-operationalising of decommissioned equipment of their type should not pose any undue difficulties for India.

    The other item that India can consider transferring is combat aircraft. Over the last decade, India has decommissioned significant numbers of MiG-21(-FL, M/MF and -bis variants) and MiG-23 (-MF and -BN variants). While these aircraft have a somewhat unfortunate reputation owing to their high attrition rate in Indian service, the types have served with distinction in Cuba and may prove to be attractive to Central and South American air forces unable to acquire aircraft of the F-5 class. Once again, India’s experience of overhauling, refurbishing and maintaining these aircraft, combined with its stock of spares could make transfers of airworthy and refurbished aircraft a possibility. Even countries such as Ethiopia (an operator of the MiG-23BN) and Angola (an operator of the MiG-23MLD) may find additional MiG-23 airframes useful, if only for cannibalization. Needless to say, an assessment would need to be made of airworthy airframes and aircraft which could be brought back to operational status. This may result in relatively few aircraft being available for transfer – as the South Africans discovered when their force of 21 Mirage F.1 airframes was found to contain only a dozen recoverable examples. Nonetheless, it is an option that is worth exploring.

    India has little use for its substantial stock of decommissioned military equipment. However, much of this equipment is still potent and would make a welcome addition to the arsenals of countries which cannot afford new systems. For India, at little cost and at minimal risk, the possibility exists to use the supply of decommissioned systems – tanks, ships, or aircraft – to break into the military markets of Latin America and Africa. If India takes the long-term view and supplies this equipment as either gifts or at discounted prices, it could reap dividends in the years ahead.

    Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.

    Defence Industry Africa, Latin America, Caribbean & UN https://idsa.in/system/files/thumb_image/2015/tank_1.jpg IDSA COMMENT

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