Malaysia postpones fighter jet deal though defence needs are pressing

Malaysia puts plan to purchase new fighter jets from France on hold even while regional dangers leave the country in a vulnerable position.

By Nicolette Chua, edited by Anne Hwarng

Malaysia has put on hold a bilateral deal to replace its existing combat aircraft with new Rafale fighter jets from France, a defence source revealed. The deal is valued at US$2 billion.

Malaysia had announced earlier in March that it was considering buying up to 18 jets to replace its aging Russian MiG-29 fighters – of which almost half are already grounded. These plans have since been shelved.

The source told Reuters that Malaysia’s jet fighter talks were only “temporarily suspended” and could resume in the future, but the priority was to secure new surveillance planes by 2020.

The suspension of Malaysia’s fighter jet acquisition comes as a heavy blow to the two main competitors for the deal – Dassault’s Rafale and the Eurofighter Typhoon.

Malaysia grapples with regional security threats

Malaysia has cited pressing regional security issues which require greater attention. It plans to strengthen its defence capabilities in areas other than its multi-role combat aircraft.

Malaysia hopes to improve the country’s aerial surveillance capabilities due to the ongoing Mawari conflict in the Philippines. The threat of the Islamic State (IS) has also become more pertinent within Southeast Asia in recent times.

The defence ministry source also said that Malaysia is looking at acquiring four more surveillance planes. These planes, such as those built by Lockheed Martin are larger and have a longer range than Malaysia’s existing assets. The source also said that Malaysia was looking “at a commercial-based platform” which would be more affordable, compared to a military-specific one.

Malaysia is also focusing more on naval security to combat IS militancy in the region. Together with Indonesia, they have stepped up the air and maritime patrols along their shared borders with the Philippines in the Sulu Sea.

ASEAN countries might also be engaging in an “unspoken arms race”, according to Kua Kia Soong, advisor of non-profit organisation SUARAM (Suara Rakyat Malaysia). Kua cites that Indonesia’s total defence spending has risen by around 26%. Neighbouring Thailand has also approved a US$389.1 million submarine deal with China. These recent developments could have prompted Malaysia to ramp up its defence capabilities.

Malaysia and China are deepening bilateral ties 

Malaysia could also be diverting resources to improving its naval defence capabilities due to the ongoing South China Sea territorial dispute. At the same time, it has made attempts to improve bilateral ties with China.

Malaysia possibly sees China as a threat even though its Foreign Minister Anifah Aman clarified that it does not have overlapping territorial claims with China. Mr Anifah noted that “China’s actions can potentially increase regional tensions and change the geopolitical dynamics on South China Sea.” He further stressed that “the government will never, ever compromise on matters which can affect the territory’s strength and national interest.”

Malaysia appears to be treading the South China Sea issue with much caution. Malaysia is seen as a defensive neorealist state since it has consistently opted for cooperation over aggression to protect national interests. Plans have been made to set up a high-level defence committee between Malaysia and China to boost their defence relationship.

A defence deal was also signed between Malaysia and China last November. Malaysia agreed to purchase four littoral mission ships (LMS) from China – a move that can be construed as a deepening of bilateral ties. Malaysia’s dilemma between seeing China as both a security threat and an alliance prevails.

Malaysia’s defence spending has been cut

Malaysia’s reluctance to purchase new combat aircraft is due to a cut in defence spending this year. The country cut its total defence budget by 12.7% to RM15.1 billion (US$3.4 billion), according to Reuters. Defence spending had to be scaled down as a result of growing public discontent over rising living costs.

Malaysia’s military expenditure decreased from US$4.5 billion in 2015 to around US$4.3 billion in 2016 (see Figure 1). The expected expenditure for 2017 is even lower – at US$3.4 billion.

PM Najib however stressed that Malaysia’s defence spending will continue to rise as its military “embarks on a long-term plan to modernise and upgrade their equipment”. He remarked that RM26 billion (US$6.1 billion) has been allocated to this cause under the 11th Malaysia Plan for “defence, public order and enforcement”.

The 2017 defence budget includes RM462 million (US$104 million) to the Royal Malaysian Air Force (RMAF) for procurement purposes. Yet it is likely that the budget will fund “ongoing programmes rather than new acquisitions”, defence analyst Dzirhan Mahadzir opines. The declining trend in defence spending further casts doubt on PM Najib’s statement.

Malaysia ranks fourth out of nine Southeast Asian countries in terms of military expenditure, according to a 2014 statistic, lagging behind its neighbours in defence spending. Singapore’s defence spending is nearly twofold of Malaysia’s while Thailand is leading by around US$0.8 billion.

Malaysia needs to weigh its defence strategy options carefully

Malaysia’s suspension of its fighter jet replacement programme reveals broader issues at hand. The declining trend in defence spending would mean that Malaysia has to be prudent in developing defence strategy. Other sectors in the national budget remain salient and should not be compromised.

An important lesson for Malaysia is that the changing nature of its security threats would mean that policymakers’ perceptions of Malaysia’s defence priorities will also change. These paradigm shifts have occurred in Malaysia in recent years. One example is the 2013 Lahad Datu incident where more than 200 descendants of the Sulu sultanate asserted Philippines’ claim to Sabah in a standoff. The incident killed dozens of militants, civilians and Malaysian security forces. The Malaysian government had to weigh this threat more carefully in its defence strategy calculations.

The threat of IS militancy in Southeast Asia and the South China Sea issue will likely remain as some of Malaysia’s top security concerns in coming years. These are among other threats such as piracy and trafficking. An upgrade in Malaysia’s defence capabilities is much needed to deal with these security concerns. Malaysia also has to replace its nearly-obsolete aircraft in addition to increasing its naval security. But for now, the procurement of new Rafale fighter jets will not materialise so long as defence spending continues on a downward trend.