Whatâs behind Australiaâs big arms deal with Germany?
Early last year, German Chancellor Olaf Scholz declared Russia’s invasion of Ukraine a major historical turning point – a zeitenwende.
That turning point continues to play out. On the eve of this week’s NATO summit in Lithuania, Berlin and Canberra announced a deal that will send more than 100 Boxer armored fighting vehicles from Australia to Germany – not the other way around, as had been the case when Australia bought about 100 Leopard tanks in the mid-1970s.
This unique deal, worth more than A$1 billion (US$666.5 million), is driven by the demands for a rapid German rearmament after the strategic shock of Russia’s invasion of Ukraine. Germany doesn’t have adequate military production capacity to meet its suddenly pressing new defense needs.
Prime Minister Anthony Albanese then added to the German deal by declaring an Australian Air Force Boeing E-7A Wedgetail surveillance aircraft would be based at Ramstein Air Force Base in Germany for six months, starting in October.
This aircraft will be part of NATO surveillance of the alliance’s eastern flank, in particular European logistical hubs supporting Ukraine. These could be threatened by air incursions from Russia or Belarus if the war escalates.
The Wedgetail will be able to detect aircraft approaching the Baltic states or Poland in the east. It can then determine their likely intent and whether they are friendly or not. Then, if necessary, an airborne air defense fighter aircraft could be vectored to intercept the intruder.
This task has been carried out by NATO’s E-3 AWACS aircraft, but these planes were bought in the 1980s and have very low reliability. The Wedgetail is only a decade or so old and is much easier to maintain and keep in the air.
With this move, Australia will now share the burden of continual air patrols in Eastern Europe made necessary by the Russian invasion.
Bringing Germany and Australia closer together
The Boxer is an eight-wheeled armored vehicle fitted with a 30-millimeter automatic cannon. It is operated by a crew of three and able to carry eight soldiers in its rear cabin.
The Boxers are built at a facility just outside Brisbane. In late 2018, the German arms manufacturer Rheinmetall won a $4.28 billion contract to build 211 Boxer Combat Reconnaissance Vehicles for the Australian Army. As part of the contract, the Australian government mandated Rheinmetall build the majority of the vehicles in Australia.
The new Boxers being built for Germany will be based on the Australian Army’s reconnaissance vehicle design, but given a different name: “heavy weapon carrier infantry.” The first deliveries will be made in 2025.
The Boxer deal helps to bring Germany and Australia closer at a time when Berlin is increasingly interested in Indo-Pacific defense matters.
In 2021, a German warship visited the northern Indian Ocean and western Pacific in a long deployment, and the following year, the German air force joined in an air defense exercise in Darwin.
In late June, Germany released its first National Security Strategy, which called China a “partner, competitor and systemic rival” and observed that competition with China has “increased in the past years.”
And later this month, Germany will send more than 200 soldiers to participate in the Talisman Sabre, a large, multinational, military exercise in eastern Australia. It will be the first time Germany participates in the drills.
Why the deal matters
The Boxer deal is also appealing domestically to both leaders.
For Scholz, buying vehicles from the factory of a German arms manufacturer in Australia is more attractive than buying US-made arms. Moreover, the deal would seem pivotal in ensuring Rheinmetall Defence Australia is now chosen over South Korea’s Hanwha to build 129 new Infantry Fighting Vehicles for the Australian Defense Force (ADF).
For Albanese, the Boxer deal is one of Australia’s largest defense export orders ever, which will create hundreds of jobs.
It will also ameliorate some dissatisfaction in the defense industry over the recent Defense Strategic Review. Of note, the review saw no place for vehicles like the Boxer in the Australian Defence Force of the future, and certainly not in local production.
However, the deal will have some direct effects on the defence force in the short term. Fulfilling the German order will probably delay Boxer deliveries to the ADF at a time when quickly increasing its capabilities is considered important.
Moreover, sending a surveillance aircraft to Europe will take it away from Australia’s area of principal strategic interest. However, the Ramstein air base is a very large American facility, so this move will also help support the burgeoning Australia-US military alliance.
Australia was Boeing’s first customer for the Wedgetail aircraft in the early 2000s. Some will hope NATO will now look favorably at also buying them from the US. This could help lower the overall operating costs of the fleet. Larger fleets gain economies of scale and reduce individual maintenance costs.
More deals forthcoming?
These deals were announced even before the NATO summit, so could there be more to come?
Australia is reportedly in negotiations to potentially give up to 41 old Hornet fighter jets to Ukraine. Ukraine is apparently interested in the retired jets, if perhaps only to spur others into gifting it a much larger number of F-16s.
This is all somewhat missing the forest for the trees, however. Russia’s war has now dragged on past the 500-day mark. It is reasonable to assume Ukraine will need more support from NATO and its allies.
And as the war drags on, it is diverting attention away from the Indo-Pacific, where Australia’s core geostrategic focus lies.
But Australia will remain on the hook for more aid until the war ends. Boxers and Wedgetails are fine in their own way, but the main game for the West remains defeating Russia and driving it out of Ukraine. With that, the historical turning point would be complete.
Peter Layton is Visiting Fellow, Griffith Asia Institute, Griffith University
This article is republished from The Conversation under a Creative Commons license. Read the original article.
Suspect held in killing of German in Pattaya
Warrants out for two others as German woman questioned in connection with murder and dismemberment
PATTAYA: One person has surrendered to police and warrants are out for two others linked to the gruesome murder of a German property broker whose dismembered body was found in a freezer in tambon Nong Prue of Bang Lamung district in Chon Buri.
Police took Petra Christl Grundgreif from an undisclosed location to the Nong Prue station for questioning after she contacted them via a lawyer to surrender at 3pm on Tuesday, said Pol Col Santi Kornkasem, superintendent for investigation at the Chon Buri provincial police office.
Warrants had been issued earlier for Ms Grundgreif and another German national, Olaf Thorsten Brinkmnan, as well as a Pakistani man holding Thai nationality, Zahrouk Kareem Uddin, 27. They were charged with colluding in theft and murder.
The dismembered body of Hans Peter Mack, 62, was found in a freezer at a house in tambon Nong Prue of Bang Lamung district on Monday night by detectives who had been following up leads based on security camera video. He had not been seen by his family since July 4.
Mack’s 24-year-old Thai wife, whose name was not disclosed, told investigators on July 5 that he had left their house in the Swiss Paradise housing estate in Pattaya the day before to meet a foreign property broker. The meeting was to discuss property sales in Pattaya and Koh Samui.
Mack’s silver Mercedes-Benz E350 coupe was found in the parking lot of the CC Condominium on Khao Noi Road in tambon Nong Prue on Sunday morning.
Inside the car police found stains of a chemical cleanser apparently used in an attempt to destroy evidence.
Earlier, his relatives had offered a cash reward of 3 million baht for anyone who had information that led to his discovery.
Police called in Mr Brinkmann’s Thai wife, identified as Jarunee, 37, for questioning.
Ms Jarunee worked as a waitress at a restaurant about one kilometre away from the crime scene. She apparently looked stressed and refused to speak to reporters, said a source.
There were reports that police had earlier called the two German nationals in for questioning, but they denied any knowledge and were later released.
After the body of the victim was found, the officers determined that three suspects were involved and they sought warrants, said Pol Col Thawee Kudthalaeng, the Nong Prue police chief.
The freezer containing the body of Hans Peter Mack is taken away for further examination. (Photo: Chaiyot Pupattanapong)
Police allege that Ms Grundgreif and her two accomplices used an electric saw to cut up the body of the victim. The body was later put into the freezer at a house at the Chokchai Village 1 housing estate.
Police seized a red motorcycle to examine fingerprints after it was found that Mr Brinkman had used it.
National police chief Pol Gen Surachate Hakparn ordered the revocation of the suspects’ visas to prevent them from fleeing the country.
Police are expected to seek court approval to arrest one more German suspect, said a source. The fourth suspect has not yet been identified.
Investigators who examined the finances of the dead victim found that more than 3 million baht had been transferred to various bank accounts.
What is it like preparing for the National Day Parade?
“I mean it’s NDP. How often do you get to perform for NDP? So we were like, let’s try it,” said Mr Haramain, 37, who met his wife in a songwriting competition.
“To have this happen like 13 years later, it’s quite surreal, to be on a big stage, performing our own song to a huge crowd. It’s doing something we love.”
Ms Lyne, 35, said the experience is something that she can tell her children and grandchildren in future, “that we performed together, when we look back on videos and pictures”.
BUSY PREPARING FOR THE PARADE
With less than a month to go before Singapore marks its 58th birthday, participants have been busy getting ready for the parade at the Padang.
Many have been working tirelessly behind the scenes for the visual spectacle, putting in several months of hard work ahead of Aug 9, including two previews and several National Education shows.
The preparation has required them to sacrifice several weekends.
On most Saturdays leading up to National Day, participants would gather at various locations, such as Raffles City Convention Centre and the Asian Civilisations Museum, from as early as 9am.
There, they do their preparations such as putting on their costumes and make-up, before heading to the Padang for rehearsals and the full show.
China launches campaign to crack down on illegal fertility treatments
HONG KONG: China will “severely crack down” on illegal activities related to the use of assisted reproductive technologies such as the buying or selling of sperm or eggs and surrogacy, in a six-month campaign to assuage widespread public concern. Fourteen government ministries including the country’s National Health Commission (NHC) saidContinue Reading
Indonesia-S Korea in a turbulent fighter jet marriage
Cash-strapped Indonesia is staying the course of its participation in South Korea’s KF-21 Boramae advanced jet fighter program, underscoring Jakarta’s perceived urgent need to modernize and improve its air force.
This month, Janes reported that Indonesian state-owned aircraft manufacturer PT Dirgantara Indonesia (PTDI) said that Indonesia is still committed to South Korea’s KF-21 Boramae 4.5 generation fighter, despite missing a payment deadline for the project.
Janes quotes PTDI as saying Indonesia has already paid off 21% of its cost share through June 2023. It also said there is still no definite timeline for releasing the 2024-2026 payment plan by the Indonesian Ministry of Defense, with PTDI planning to pay off 32% of the cost-share payment.
However, Janes says that the South Korean Defense Acquisition Program Administration (DAPA) mentioned that Indonesia has yet to provide its plans for the new payment and is seeking talks with Indonesia on the matter.
Janes notes that the Korea Aerospace Industries (KAI) engineering and manufacturing development phase of the project cost US$6.2 billion, with Indonesia agreeing to pay 20% of the expense, or approximately $1.2 billion.
The report notes that DAPA is planning its response, which could consist of senior-level meetings with Indonesian counterparts. DAPA says that it will continue discussions with the Indonesian government to resolve cost-sharing issues and put the project back on track.
In a separate article from April 2023, Janes notes that Indonesia will receive one KF-21 prototype when it fully meets its financial obligations under the deal.
Indonesia’s determination to proceed with the KF-21 project underlines its desire to modernize the Indonesian Air Force (IDAF), which a lack of resources has handicapped to date.
Asia Times noted in June 2023 that the IDAF has long sought to improve its currently insufficient capability to cover its airspace and meet evolving security needs vis-à-vis China.
As of April 2023, the IDAF operated a hodgepodge fleet of 49 fighter aircraft, which includes 33 F-16s, 11 Su-30s and five Su-27s, with the Su-30 serving as the IDAF’s primary fighter.
While Indonesia planned to purchase Russia’s Su-35, it was ultimately dissuaded by US threats to hit Jakarta with the Countering America’s Adversaries Through Sanctions Act (CAATSA). The US offered Indonesia 36 F-15EX fighters instead.
However, the F-15EX’s high unit price and the risk of possible US restrictions on the jet’s avionics and weapons drove Indonesia to opt for French-made Rafales instead.
Budget limitations and shifting priorities, however, may limit how many jets Indonesia ultimately buys. Those financial constraints were seen in Indonesia’s recent purchase of a dozen 26-year-old ex-Qatari Mirage 2000-5 jets, a procurement of aged aircraft that was widely panned.
The new-age KF-21 project looks like a better bet than the Rafale, which first flew back in 1986.
Military Watch notes in an October 2022 article that the Rafale lacks stealth capabilities, uses weak engines and lacks access to derivatives of the Taurus air-launched cruise missile (ALCM). The report says that the KF-21 offers superior performance to the Rafale at a lower cost.
Seoul views the KF-21 as part of a wider drive to become a major exporter of high-tech weaponry, with potential buyers looking for top-of-the-line fighters at more reasonable prices than Western models.
That drive ties into South Korea’s New Southern Policy, which emphasizes close political and economic links with the Association of Southeast Asian Nations while positioning as an arms supplier to the region.
In February 2023, Aerotime reported that KAI aims to export its combat jets and helicopters to the Middle East, with a Memorandum of Understanding (MOU) signed between KAI and the United Arab Emirates (UAE) in January 2023.
Aerotime noted that the UAE weighed the KF-21 against comparable US and French models and found them to have fewer armament restrictions.
Breaking Defense reported in a June 2023 article that Poland and Malaysia could also be potential customers for the KF-21.
The report mentions that the Polish Armaments Group (PGZ) has expressed interest in the aircraft and designated 2026 as its timeline to decide whether to commit to the program.
The source says Poland previously ordered 48 FA-50 light fighters from South Korea, the largest-ever FA-50 European order. The FA-50 was jointly developed by KAI and America’s Lockheed Martin.
Malaysia could choose between an improved FA-50 or the KF-21 as a replacement for its Su-30 MKMs and F/A-18s, following up its earlier order of 36 FA-50s, said Sangshin Park, KAI’s international business development director for Asia.
Park also hinted that the KF-21 might eventually replace the Su-30s MKMs now in Malaysia’s service, which maintenance issues have hounded due to the difficulty of acquiring Russian spare parts amid the ongoing Ukraine war.
The FA-50 orders may establish political and military ties and bureaucratic mechanisms for future KF-21 sales to those countries.
As with Indonesia’s decision to drop South Korea as its primary partner for its submarine program, payment difficulties in the KF-21 project may still have significant strategic repercussions for both.
Failing to develop a workable solution for Indonesia’s KF-21 payment woes could result in diplomatic fallout and a loss of trust that hampers future bilateral defense cooperation. While Indonesia says it remains committed to South Korea’s KF-21 program, Jakarta runs the risk of being sidelined or replaced by more financially fit prospective partners.
EC puts off Pita decision again
Poll body plans further talks on Wednesday, one day before parliamentary vote for PM
The Election Commission (EC) has still not reached a decision on whether to seek a Constitutional Court ruling on the eligibility of prime ministerial candidate Pita Limjaroenrat. It will meet again on Wednesday, one day before parliament is scheduled to vote for a new prime minister.
Thursday’s vote will begin at 5pm, following six hours of debate by MPs and senators, Parliament President Wan Muhamad Noor Matha said on Tuesday.
EC chairman Ittiporn Boonpracong said on Tuesday that the commission was continuing to review the report of its fact-finding committee that investigated Mr Pita’s eligibility for political office.
The commission had been widely expected to make a decision on Monday but they later said they needed more time. It has yet to speak with Mr Pita but Mr Ittiporn said it doesn’t have to.
He acknowledged that Mr Pita had written to the EC seeking to present his defence. However, Mr Ittiporn said the constitution allowed the EC to ask the Constitutional Court right away to rule on the status of any House representatives.
The MP status of Mr Pita, leader of the election-winning Move Forward Party and prime ministerial candidate of the eight coalition allies, was called into question because he held a small number of shares in iTV Plc, a broadcaster that went off the air in 2007 and was delisted from the Stock Exchange of Thailand in 2014. The shares were held in the estate of his father who died in 2006.
The constitution prohibits a shareholder of a media organisation from running in a general election.
The EC earlier dismissed the complaints about the iTV shares as they were filed too late. Its focus now is on whether Mr Pita violated another rule that bars someone who files to run for election while knowing that he might have broken an electoral law — in this case owning media shares.
Meanwhile, preparations continue for Thursday’s parliamentary sitting, with Mt Wan saying that MPs would be allocated four hours and senators two hours to debate prior to voting on Mr Pita’s candidacy, starting at 5pm.
The House speaker and parliament president also said he expected political supporters would abide by the rules while gathering near the parliament on Thursday.
He declined to comment on what would happen next if Mr Pita failed to receive a majority vote from the joint sitting of representatives and senators on Thursday. Further sittings are tentatively scheduled for July 19 and July 20, and it is not known if Mr Pita’s name would be put forward on one or both days.
Mr Pita’s eight coalition allies hold 312 out of 500 seats in the House. He needs at least 376 votes in favour from the House and the Senate to be installed as prime minister.
Representatives of the eight allies met on Tuesday. After the meeting Pheu Thai Party leader Cholnan Srikaew said participants asked how many senators Move Forward had persuaded to support Mr Pita.
Move Forward secretary-general Chaithawat Tulathon declined to specify a number but promised that the party was trying its best, Dr Cholnan said.
The Pheu Thai leader refused to answer questions about other solutions that might be considered if Mr Pita cannot earn enough votes on Thursday.
Fuel vapour hazard at site of collapsed Lat Krabang bypass
The danger of a fuel vapour explosion at a petrol station is adding to the hazards of clearing a long, collapsed section of elevated highway from Luang Phaneg Road in Bangkok’s Lat Krabang district.
About 100 metres of the elevated bypass, which is still iunder construction, colllapsed on Monday evening, killing an engineer and a construction worker, injuring 12 other people crushing cars on the road below and toppling power poles.
A concrete span about 100 metres long fell from a height of 20 metres onto Luang Phaeng Road between the Luang Phaeng branch of Lotus and Jorakay Noi police station about 6pm.
Police on Tuesday closed the inbound side of Luang Phaeng Road to all traffic.
Officials said it would take 3-4 days to clear away the debris – shattered concrete, reinforcing bars and steel supports.
City governor Chadchart Sittipunt said he would try to ensure Luang Phaeng Road is reopened to traffic in three days.
He said the elevated road was being built by a consortium of two qualified companies, Tharawan Construction and NPA Construction.
The governor said a crane known as a launcher and used to lift the section of elevated road had first tilted to one side, and then both fell onto Luang Phaeng Road. The investigation into why this happened was continuing, he said.
Deputy city clerk Narong Ruangsri said clearing of the road and its reopening to traffic was being given priority.
Mobile cranes were brought in to lift the fallen structures, which would be cut into smaller pieces for removal. Aerial drones were providing an overview of the site to aid planning and ensure safety.
The task was made more hazardous by limited space and the need for extreme caution because of a close-by petrol station, where vapour emissions had to be continuously monitored. A spark could trigger a fuel vapour explosion, he said.
The fallen span is part of an elevated road costing 1.6 billion baht being built between Onnut and Lat Krabang under contract to the Bangkok Metropolitan Administration.
Thailand caretaker PM and ex-coup leader Prayut to quit politics
Gen Prayut became prime minister in 2014 after leading a coup d’etat to overthrow Yingluck Shinawatra’s democratically elected government. His military junta ruled Thailand for nearly five years before a general election was held in 2019 under a new constitution written by a military-appointed committee. At that time, he was theContinue Reading
SUSTAINABLE FINANCE POLL 2023: Asian debt markets sharpen ESG focus | FinanceAsia
It’s looking increasingly like the time for sustainable finance to shine. After a fall in the year-on-year volume of green, social and sustainability (GSS) instruments globally during 2022, a rebound is forecast this year – to around US$1 trillion in issuance, forecasts S&P Global.
Asia Pacific (APAC) is well-placed to capitalise on this upswing. S&P Global’s projections, for example, are that GSS issuance volume in the region will jump by as much as 20%, to reach US$240 billion, roughly a quarter of the global landscape.
The longer-term story looks promising, too, especially amid ambitious climate goals. Even in South-east Asia alone, about US$180 billion needs to be invested in clean energy projects every year until 2030 to keep the transition journey on track, based on the International Energy Agency’s Sustainable Development Scenario. Putting this in context, from 2016 to 2020, investment in clean energy was $30 billion per year, on average.
Adapting to climate change is certainly a key driver. But according to more than 100 investors and borrowers in APAC who took part in the 6th annual poll by ANZ and FinanceAsia in April and May 2023, multiple dynamics indicate an ever-bigger role for GSS instruments.
Among the key factors is a mix of policy and regulatory initiatives to foster greater transparency. This should, in turn, boost investor demand and issuer appetite. At the same time, as this segment of the region’s capital market continues to mature, active GSS bond investors and issuers can expect greater potential for newer formats of issuance to help bridge social and environmental priorities such as biodiversity and gender equality.
10 top takeaways from the survey
- 92% of all respondents have integrated GSS factors within their strategy, with 77% confirming that the market volatility over the past 12-18 months either hasn’t changed or has increased their focus on GSS.
- Nearly half (49%) of investors now have their own in-house ESG research and analysis capability, a notable increase from the 42% poll finding 12 months ago.
- 70% of investors have some type of experience with sustainable finance, with bonds much more popular than loans.
- While just under one-third of investors have exposure to transition finance instruments, another 45% are interested in investing in them, either in the next year or over the medium to long term.
- Although 92% of investors haven’t yet invested in Orange (gender equality) bonds, half of them say they would do so if they were more widely available.
- 88% of investors and 90% of borrowers believe further regulation of sustainability and sustainable finance would have a positive impact on the market overall.
- 49% of investors and 41% of issuers say a ‘greenium’ of at least 4 bps is typically priced-in to new GSS bond issues.
- Alignment with sustainability objectives, better access to capital and investor diversification are the top three drivers for issuers of GSS instruments.
- Time, availability of targets and set-up cost are the biggest hurdles to issuing GSS instruments.
- Only 19% of borrowers have never issued a GSS instrument – compared with 64% in last year’s poll.
Read more survey findings and analysis here
¬ Haymarket Media Limited. All rights reserved.
Prayut retiring from politics
Caretaker premier resigns from UTN, says he did his best in nine years in office
Prime Minister Prayut Chan-o-cha has announced his retirement from politics, nine years after he took power in a coup as army chief.
“From now on I want to quit politics, resigning as a member of the United Thai Nation Party,” he said in a statement released by the party on Tuesday.
Gen Prayut did not run in the May 14 election as a party-list MP but served as the chief adviser to the UTN and one of its two prime ministerial candidates. He will remain caretaker premier until a new government is formed.
Voting to choose the next prime minister is scheduled to begin on Thursday but it is not clear whether Pita Limjaroenrat of the coalition-leading Move Forward Party will be chosen in the first round.
Gen Prayut, 69, said on Tuesday said he had “achieved many successes” in his nine years in office.
“I as prime minister have worked hard to protect the nation, religion and monarchy for the benefit of the beloved people. The result is currently bearing fruit for the public,” he said in a statement.
“I have tried to strengthen the country in all areas for stability and peace and overcame many obstacles domestically and internationally.”
In the nine years since his coup, Gen Prayut survived challenges in the form of court cases, House confidence votes and street protests by opponents who saw him as an opportunist who lacked a public mandate.