Information Dissemination: December 2009

Thursday, December 31, 2024

2009 Navy Year in Review

As 2008 comes to a conclusion, the time has come to reflect on naval activity for 2009 and offer some reflection regarding the most important developments of the year. My list will undoubtedly leave out activities that others believe are important, and will also undoubtedly include items that many don't believe belong. So be it, I am but one observer who looks at periods greater than one year at a time as a practice, but note that in certain years specific actions, events, activities, and items occur that carry with them long term effects that may or may not be immediately evident.

5) Navy Social Media. This probably looks like a self-serving choice given I am a blogger - not exactly. Engagement with the American people leveraging social software is important long term to the Navy, and the Navy needed to start the process. This list represents an impressive start. As time goes on we will see a strategy and cohesion emerge that develops into a coherent and consistent STRATCOM strategy. This will be absolutely vital to the Navy in the information age, not only in connecting the Navy to the American people, but to the people globally in places the Navy deploys to influence. The observations regarding the absence of Navy influence was expanded in February of 2008 with Steve Cohen's Proceedings article Marketing Is Not a Dirty Word and advanced further in February of 2009 with Professor Claude Berube's The Navy Can Handle the Truth: Creative Friction without Conflict. As we enter 2010, I look forward to seeing how efforts like Admiral Harvey's US Fleet Forces Command Blog evolves. I get the sense the Navy has seen the potential of social software in STRATCOM, and is working to figure out the finer details. Time will tell.

4) Combined Task Force 151. Back on January 15th, 2009, a reporter asked VADM Gortney "What's Taskforce 151 going to look like in a year? As I understand it now, it's a coalition, but of three United States ships only. So who do you expect to join, when, and what's it going to -- what's it going to look like full force?" A year later it is accurate to call CTF-151 a successful United States Navy established international naval task force coalition that has significantly curbed piracy operations in the Gulf of Aden. CTF-151 best represents a visible example of the intended way to execute CS-21, but we must consider CTF-151 a good start with a lot of work ahead.

3) Ballistic Missile Defense Moved to Sea. This is the most significant requirement placed on the Navy since the cold war, and perhaps the most significant warfighting requirement placed on the Navy since the development of ballistic missile submarines. No capability will influence the surface warfare community over the next two decades more than naval ballistic missile defense. While there is a real potential for this being one of the major achievements of the Obama administration, he will be remembered as a strategic fool if the capability goes underfunded and significantly shrinks the fleet, as this major strategic change could very well do.

2) Ray Mabus/Bob Work appointments. It is a great thing for the US Navy that the civilian leadership is filled with two very strong personalities like Ray Mabus and Bob Work. Over the next year we are going to see decisions made that will shape the Navy for decades, and I consider it a very good thing that the Navy has the right combination of intelligence, wisdom, and experience in place to execute the policy vision for the 21st century fleet.

1) A Maersk Alabama Easter. What is the deal with Christian holidays in 2009? Hard to believe we spent Christmas discussing underwear bombers when in the same year, we celebrated Easter with 3 shots heard around the Horn of Africa. The resolution to the Maersk Alabama incident was incredible with 3 perfect shots, 1 capture, and a highly public dramatic rescue of the Captain that highlighted outstanding execution of a naval operation. God bless the Navy SEALs.

Happy New Year to all.

Developing Concepts for Joint Maritime Operations

I mentioned yesterday how much I enjoyed Captain Victor Addison's article in the January 2010 issue of Proceedings, but I didn't mention why. If you have not read the article, You Can't Always Give What You Want, I highly recommend it. I am sure the force structure discussion representing the bulk of the article will draw the most attention, but for me this writing jumped off the page:

A naval officer's reaction when reading U.S. Joint Forces Command's (JFCOM) "Capstone Concept for Joint Operations" (CCJO) could be analyzed according to Elizabeth Kubler-Ross' five stages of grief. The reader is initially overwhelmed with feelings of denial and rage by a joint document that can so clearly articulate the most fundamental aspects of joint force warfare with nary a reference to gallant naval battles. The next phase, bargaining, is championed by Office of the Chief of Naval Operations (OPNAV) staff members who instinctively send urgent change requests to JFCOM containing "maritime strategy stuff." As sadness ultimately gives way to acceptance, a sense of equilibrium is achieved based on the assumption that the half-life of documents like the CCJO is generally no more than two years.

But what if the concept's depiction of joint warfare is correct? Is it possible that while we've been dutifully celebrating the anniversary of the Battle of Midway, an era of warfare has dawned that places the Navy in a supporting role and requires a slightly different perspective on naval power?

I think there is a lot to talk about in the U.S. Joint Forces Command's (JFCOM) "Capstone Concept for Joint Operations" (CCJO) from a Navy perspective, in fact, I'm going to take a similar but distinctly different approach as Captain Addison. What if the concept's depiction of joint warfare is correct, but is written specifically for the Navy to encourage ideas towards achieving balance with naval power? I use the word balance specifically in the context of CS-21 for balancing the priorities of winning and preventing war.

The maritime environment is different than land, so how do we apply the CCJO concept of joint operations to our sea forces? Unlike land, presence requires a ship, as men can't walk on water, and this simple fact alone forces us to think about ways and means as a singular concept.

JFCOMs Capstone Concept for Joint Operations describes Joint Operations as the integration and adaptation of combat, security, engagement, and relief and reconstruction; four basic categories of military activity. The central thesis of this concept comprises three interrelated ideas that together describe broadly how the joint force will operate, and outlines the foundation for our discussion as such:

The national security challenges of the preceding section establish the purposes for which joint operations may be required now and in the future. This section describes in general terms how future joint forces will contribute to meeting those challenges. Subordinate operating concepts will apply these broad ideas to more specific situations.

The central thesis of this concept comprises three interrelated ideas that together describe broadly how the joint force will operate:
Address each situation on its own terms, in its unique political and strategic context, rather than attempting to fit the situation to a preferred template.
Conduct and integrate a combination of combat, security, engagement, and relief and reconstruction activities according to a concept of operations designed to meet the unique circumstances of that situation.
Conduct operations subject to a continuous assessment of results in relation to expectations, modifying both the understanding of the situation and subsequent operations accordingly.
These three ideas are explained in greater detail below. Together they describe a generic process of operational adaptation designed expressly to cope with the complexity, uncertainty, and change that will define the future operating environment. This process applies to all joint operations even though the specific ends, ways, and means of those operations may vary widely according to the situation.

First, in designing joint operations, the joint force commander must come to grips with each operational situation on its own terms, accepting that this understanding rarely will be complete or entirely correct, but at best will approximate reality. The Joint Operating Environment describes complex, globalized challenges for which the underlying causes and dynamics will be anything but obvious, while the repercussions of action often will be broad and unpredictable. The interests of various stakeholders may be unclear, and even identifying those stakeholders may be difficult. In this environment, the joint force cannot afford to apply preconceived methods reflexively, but instead must conform its methods to the specific conditions of each situation.

Those methods must reflect both the internal dynamics of the situation itself, which give the situation its basic operational nature, and the strategic context, which establishes the broad political and resource limits within which operations must be conducted. Because of pervasive uncertainty, both may require making assumptions about the situation based on the best available, but often inconclusive, information. Such assumptions must be treated as hypotheses to be confirmed or altered by the evidence developed through action.

Second, in framing a concept of operations conforming to this situational understanding, the joint force commander must consider the use of combat, security, engagement, and relief and reconstruction activities. The following section discusses these in greater detail. Suffice to say here that most joint operations will require some combination of two or more of these broad categories of military activity, which in total embrace virtually every mission the joint force could be called upon to perform. Operational art thus becomes the arranging and balancing of combat, security, engagement, and relief and reconstruction activities to achieve the objectives of the joint operation or campaign -- and their continual rearranging as that operation or campaign unfolds.

The concept does not envision these activities occurring in regular or distinct phases. While some tactical sequencing inevitably will be required, this rarely will be uniform across the operational area. Rather, it is envisioned that those activities will occur largely simultaneously across the operational area.

While the four basic categories of activity constitute the means of joint operations, the ways are the concepts by which they are arranged and integrated. As desirable as it might be, no single such concept can prescribe that arrangement across the full set of potential security challenges. The concept for an offensive campaign to defeat the armed forces of a hostile state, for example, necessarily will be very different from the concept for helping a host nation defeat a growing insurgency, which in turn will have little in common with the concept for responding to a peacetime natural disaster.

In every operational situation, the joint force commander will have to develop a concept of operations that integrates -- and reconciles the frequently competing demands of -- combat, security, engagement, and relief and reconstruction as they apply. That concept of operations cannot be based on a rigid template, but instead must reflect the specific conditions of the situation. This has significant implications for doctrine, training and education.

Finally, the joint force commander must expect that, however carefully conceived, his initial operational design will prove inadequate in some respects. His plan therefore must incorporate explicit means of continuously assessing the results of operations in relation to expectations, and he must be prepared to modify operations when the two diverge. By probing the situation to cause it to reveal itself more clearly, operations themselves thus become a way of testing early assumptions and expectations.

To succeed, this approach requires making assumptions about the situation explicit so they can be reconsidered as events unfold. It further requires collecting information not only to monitor tactical execution, but also to provide commanders a basis from which to re-evaluate their fundamental assumptions and modify their operations accordingly.

In short, as both a concession and response to pervasive uncertainty, all joint operations are fundamentally and explicitly an adaption based on learning about the situation through action. Both understanding the situation and arranging combat, security, engagement, and relief and reconstruction become continuous activities informed by feedback. Regardless of the mission, the more quickly and appropriately the joint force can adapt itself to its situation, the more successful it will be.

With this foundation, I intend to start 2010 with a discussion of the four basic categories of military activity as outlined in CCJO from a maritime perspective and specifically in the context of CS-21 for balancing the priorities of winning and preventing war.

January 1st - Combat
January 2nd - Security
January 3rd - Engagement
January 4th - Relief and Reconstruction

Blogs are imperfect tools for continuous discussions on the same topic, but with so many multifaceted conversations coming, I hope to use this discussion as a way of developing a blogging technique on Information Dissemination to facilitate larger, complex strategic discussions on naval topics - particularly since 2010 will bring not only a new QDR and a new NOC, but also an AirSea Battle Doctrine - all of which will be complex issues requiring multiple blog posts to cover sufficiently.

Al Qaeda Looks to Sea With Latest Threats

The Osen-Hunter Group is a global, private security company that also puts out daily intelligence assessments, similar to the intelligence services of the popular STRATFOR service. Today's analysis concluded with an assessment worth consideration:

Assessment: Just as a strike against an American ship in the Suez would double the value for AL QAEDA, we would warn that Mombasa is a port of concern, given its proximity to southern Somalia where AL SHABAAB is strongest and where piracy contacts in the Kenyan port authority are ample. Inasmuch as this represents a second reference to ships at sea - unprecedented in a single AL QAEDA statement - we make the following, unequivocal judgment:

We assess a direct, grave threat, by AL QAEDA, against U.S. Navy warships and U.S.-flagged vessels. Moreover, if U.S.-flagged merchantmen are still steaming anywhere in the U.S. FIFTH FLEET Area of Responsibility without armed security, they do so now at a considerably elevated risk.

In this connection, we should also note a reference to the Fort Hood massacre and a call to Muslims “in the Crusader armies” and “agent governments” to replicate the 5 November killings at Fort Hood. We would interpret this as a call on sufficiently radicalized sailors to sabotage warships.

They come to this conclusion based on an observation that I do think is certainly noteworthy. On December 27th, Al Qaeda in Yemen (AQIY) responded to airstrikes in the eastern province of Shabwa conducted by Yemen air force with new threats. The full English transcript (PDF) of the AQIY threat is here, but this part stuck out.

“And lastly, we call upon the proud tribes of Yemen—people of support and victory—and the people of the Arabian Peninsula, to face the crusader campaign and their cooperatives on the peninsula of Muhammad, prayer and peace upon him, and that’s through attacking their military bases, intelligence embassies, and their fleets that exist on the water and land of the Arabian Peninsula; until we stop the continuous massacres on the Muslim countries."

While not unheard of, it is uncommon for any Al Qaeda statement to mention attacking western fleets or attacks on water in general. Plenty of threats discuss planes, bases, and embassies... but rarely targets at sea. That is why the Al Qaeda in Yemen AQIY claim of responsibility for the Christmas airline attack was also interesting. Full English transcript here (PDF), but again, this part stuck out:

“We call upon every Muslim protective of his religion and doctrine to remove the polytheists from the Arabian Peninsula and that’s through killing every crusader working in the embassies or other places, and you ought to declare it a full-scale war against every crusader in the [Arabian] Peninsula of Muhammad, Allah’s prayer and peace upon him, on land, on water, and in the air.”

The Osen-Hunter Group's assessment is in direct response to threats made by Al Qaeda against sea targets twice in one week, because as it turns out, Al Qaeda has never made threats against targets at sea twice in one week, ever.

I'm not going to speculate the conclusions, but let me give the folks in DC something to consider regarding this issue.

If you have followed the fallout from the underwear bomber, the only clear conclusion is that the Department of Homeland Security, and in particular Secretary Janet Napolitano, got caught with their pants down. They had no plan of action in place to respond to the attempted bombing of the airline, and when the event took place on a slow news day like Christmas, it became the only thing to talk about and a major issue to the American people.

So now everyone is talking about the event, and to make things worse, now we have instant experts on everything from underwear bombs to Al Qaeda in Yemen, and in many cases those "experts" couldn't name the Capitol city of Yemen if they had a gun to their head. In politics, actual expertise is completely irrelevant though, and that is the problem. The STRATCOM fallout from the bomber got out of control quickly, and with no coherent response ready to either a successful terrorist attack or even a failed attack, DHS looks like an agency of fools.

So what if Al Qaeda is successful, or even fails, an attack on a commercial or even naval warship in the Gulf of Aden? Who is the lucky person (or people) who will take the plane to New York and be on Fox News, CNN, and MSNBC? How ready is the Navy to defend the bombardment of questions rooted in total ignorance sure to come from the host of any given show? How might such an event influence FY 2011, and would a successful terrorist event against a warship throw a curve ball into the ongoing QDR assessment?

Consider some of the questions. It will be noted that piracy in 2009 peaked in that region, highest level in decades. It will be noted that Al Qaeda is operating not just in Yemen, but Somalia, and Iran will be a constant point of discussion. It will be noted how important oil transport at sea is. The multi-national effort in the Gulf of Aden will be discussed, which will lead to topics such as the Chinese and Russian naval vessels in the region. They may bring up the UN statistics for the human trafficking in the region, stunning numbers of human suffering. Most importantly though, they are going to ask what the Navy is doing there and if the Navy is lucky, they won't ask for some form of tangible results of naval operations...

but what if they do?

What is the STRATCOM when the Navy accurately notes the few number of ships hijacked in the Gulf of Aden since July of 09 when at the same time, more ships are being hijacked just south in the Indian Ocean than ever before, including as far as 1000 nautical miles east of Somalia. When asked how the Navy intends to deal with the piracy problem or Al Qaeda in Somalia or Yemen, what is the answer that doesn't turn millions of politically active Americans into millions of politically frustrated Americans?

How will the Navy explain themselves to the American people following a highly dramatic crisis at sea that unfolds on TV when it doesn't end like the Maersk Alabama? We just spent the entire first year of the Obama administration publicly debating military strategy for Afghanistan on TV and on the internet. Should a few incidents at sea occur in early 2010, the Navy is going to get that conversation with the country on maritime strategy two years later than anticipated, and unless the Navy is ready for that conversation from the very beginning, expect the opinions of "experts" to dominate any Navy STRATCOM and more importantly - watch those "experts" heavily influence the political reaction.

Wednesday, December 30, 2024

What China Wishes To Do With Its Navy

Interesting piece here quoting a Chinese Admiral musing on the advantages offered his Navy if it had a series of overseas bases from which to support its operations. One question that has confronted those who look at East Asian security matters is whether the Chinese naval buildup has been focused on Taiwan, or whether it is more properly thought of as a buildup of a "blue water" force appropriate to a nation with global interests. This Admiral's thoughts seem to suggest the latter.

I mention this as it clearly impacts US Navy force structure and planning decisions. Any lingering sense that we should be basing force structure decisions on a "Taiwan" scenario--rather than on a scenario that aims more broadly at East Asian security and stability (and increasingly the appearance of a near peer elsewhere)--seems misplaced.

China is building a Navy for worldwide fleet operations. That is the Navy we must plan to dominate.

Bryan McGrath

The Force Structure Excuses Grow Old - UPDATED AND CORRECTED

I have made a mistake, completely my fault. This corrected image (green arrow) shows the correct location of the attack. The attack actually occurred~1200 nautical miles from Mogadishu and about ~715 nautical miles from Mumbai.

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For subscribers to Proceedings magazine, there is an article in the January 2010 issue by Commander Stephen J. Coughlin discussing the Cyclones. The article, Good Things Come in Small Packages, is essentially a brief history and short support for the PC as a platform. If you can't read the article, it is time to renew your subscription for the new year.

The article does not take on one of the primary complaints about PCs, specifically the lack of range and endurance. There might be a good reason though, because that argument is getting harder and harder to make.

There was a report tonight of an unsuccessful pirate attack against a merchant ship 525 nautical miles southeast of the Seychelles. The attack apparently consisted of more than one vessel, with one of the vessels potentially a mothership. RPGs were fired at the commercial vessel, but the ship was able to avoid capture.

What is interesting is that the location of the attack was about ~750 nautical miles from Diego Garcia, but ~1220 nautical miles from Mogadishu (see pic above). Can someone explain to me how a bunch of dudes with machine guns in speedboats can operate ~1220 nautical miles from Mogadishu, and the worlds only superpower cannot build a ship less than 3,000 tons without complaining about range and endurance.

Either the Somali pirates have a better small vessel logistics model than we do, or the range/endurance complaint by USN officers for small vessels is bullshit. If pirates can operate motherships and skiffs for 2500+ nautical mile round trip piracy operations to hijack commercial ships, surely the worlds largest Navy can come up with a plan to operate smaller vessels without complaining about endurance.

As I was reading the January 2010 issue of Proceedings, the Surface Warfare issue, I found it entertaining that no less than four articles are discussing force structure. I'll pick up Captain Addison's article in more detail next week to start the new year, but I note his article really gets to the heart of the matter.

Right now in the Indian Ocean, Persian Gulf, Red Sea, and Gulf of Aden we have irregular warfare at sea in spades with a full gambit of human trafficking, drug smuggling, arms smuggling (unless we refuse to believe arms to Sudan, Somalia, Iraq, Pakistan, Yemen, or Afghanistan move by sea), and piracy all over the place, and while the seas are overrun with IW problems in the region where our Army is struggling on land... SWOs are looking to justify the same force structure they developed during the cold war.

The question for Congress leading into 2010 is very simple. Is the Navy part of the IW problem, or part of the IW solution? If the Navy's inability to successfully deal with IW at sea is contributing to the problems in the region from Iraq to Yemen to Somalia to Afghanistan, then who should be held accountable and what needs to get done? If the Navy is part of the IW solution, then why is Al Qaeda expanding regionally while growing stronger?

At some point force structure has to stop being the excuse why the Surface Navy can't contain the IW problems at sea in the CENTCOM AOR. If the Navy can't break up the black markets moving drugs and arms by sea in that region - activities that represent the economy of the enemy - how do we expect the Army to stop the violence on land short of killing every enemy?

Tuesday, December 29, 2024

Pirates Strike Again, Again, and Again Off Somalia

Pirates operating from Somalia have captured three ships in the last 24 hours according to several sources. Two of the ships, the UK-flagged chemical tanker St James Park and the Yemeni freighter Al-Mahmoudia2 were hijacked in the Gulf of Aden, the first two ships to be hijacked in the Gulf of Aden since July 10, 2009.

The third ship hijacked was the Greek-flagged bulk carrier Navios Apollon. The 52,000 ton ship was boarded by 10 men in speedboats in the Indian Ocean northeast of the Seychelles.

By my very unofficial count, that brings the number of commercial ships hijacked by Somali pirates to over 50 for the year. Will be interesting what the final official tally is, and how many ships have been hijacked after the end of the summer Monsoon season. The number will be larger than expected, and unfortunately will not reflect the hard work of the naval forces in the Gulf of Aden.

It will be also interesting to see the reaction in Great Britain to a UK-flagged ship hijacked.

Monday, December 28, 2024

Rare Hijacking in the Gulf of Aden

This is a noteworthy development.

Somali pirates have seized a Yemeni cargo vessel with a crew of 16 and are taking it out toward the Indian Ocean, a Yemeni Defense Ministry website said on Monday.

The vessel, called Al Mahmoud 2, had left Yemen's southern port of Aden on December 18, with 15 sailors and a captain on board -- all Yemenis, the impoverished Arab country's coastguard told the website.

Not sure the ship name is accurate in that report, because according to this information the ship Al Mahmoud 2 is actually in Beirut. Perhaps a different ship of the same name?

Based on reports from other sources (more credible than Reuters), an unnamed ship was hijacked approximately 97 NM southwest of Al Mukalla, Yemen (12 58N 048 33E) at 14:49 Zulu (GMT). Unless my calculations are wrong, that would be 5:49 in the afternoon, just minutes after sunset.

This hijacking would represent the first successful hijacking in the Gulf of Aden since early July, and is the first example where a ship that followed the guidelines set forth by the international community was hijacked in the shipping lane patrolled by multinational naval forces.

Sunday, December 27, 2024

China in 2009

As we look back on everything that happened this year, I decided to look at more than just naval shipbuilding and military/civilian aviation, but also the financial and economical engine that is China. Many people waited for the Beijing Olympics to be China's crowing moment or coming out party. In many ways, 2008 was a milestone year when one considers the major snow storm that crippled the country, the Tibet riot, the Sichuan Earthquake and the Beijing Olympics. However, this year has turned out to be the true coming out party for China. Due to the fall of Western financial institutions (especially in New York and London) and our current economic downturn, the world has been increasingly relying on China to be the knight in shining armour. In many ways, the increased power and expectations have come way too much and way too fast for China.

The Obama administration has basically annointed China as its equal this past year and the idea of G-2 have been raised everywhere. China has been asked to be a responsible stakeholder in issues like climate change, fighting global imbalances, Iran, North Korea and currency manipulation. In many of these cases, China has reacted and handled itself in ways that counter the views of Western countries. For years, China had followed the strategy laid out by Deng Xiaoping in growing quietly and minding its own business. There were a few bumps along the way, but China basically stayed out of major international affairs all the way through Jiang Zemin's run as the paramount leader. Their foreign and domestic policy could be summed up as: make a lot of money for Chinese people, being ambivalent about everyone else, advance the country scientifically/technologically and do this with as little noise as possible. By the time, Hu came to power, China had just joined WTO and started to run large trading surplus against USA. Hu moved away from a US-centric foreign policy and started this process of securing natural resources all around the developing world (even in the Americas). By 2005-2006, it was clear that China had expanded (and was on such a trajectory) so much in political influence that it could no longer hide in international affairs as just another developing nation. Starting from George Bush's second term, you really started to see US engagement in trying to make China into a "responsible stakeholder". Armed with this new attention and expectations, China really was unprepared for the extra responsibility. It was still trying to just remain in the background and become stronger economically. Even though China has opened up a little bit in the recent year and tried to take on more responsibility, it still values its own priorities above all else. In one sense, it still wants to be treated with the same leniency that other developing countries are treated with. At the same time, it also wants to be respected as a country with long history, rich culture and prospering society. But more than anything, China still does not look at itself as a superpower (it ranked itself 7th in national strength in a recent study), even though most people around the world think that way. I think that most Chinese people still do not comprehend the kind of impact that their country and its growth is having on the rest of the world. I will just try to go through some points on how this year has really seen the emergence of China.

Politically, this was a huge breakout year for China. Hilary Clinton made a visit to China in February and basically pleaded to the Chinese gov't to buy more treasury bonds. When they had the strategic dialog in the middle of the year, Obama stated clearly that all of the issues that we are facing need both countries to work together to resolve. And finally when he visited last month, it also appeared that he was bowing down to the Chinese. Because Obama has somewhat of a reputation of being soft amongst foreign policy hawks, I'd like to say that he gave the elevated status due to the practical situation rather than "the left being weak to the commies". During Bush's second term, he grew to become more and more friendly toward the Chinese administration. In many ways, George Bush was possibly the most China-friendly president in the US history and Obama has carried on that trend. I think both presidents did the most pragmatic approach possible. They realized that China was influential in way too many places around the world (especially pariah nations) to not cooperate over the major geopolitical issues. They also realized that China is America's banker and believe that America needs China's savings to get out of this financial mess. They have lamented that China has not acted to its responsibility on issues like Iran, Sudan and North Korea. I think they would be find it hard to get cooperation from China. When China was still clear the weaker partner in the relationship, it could claim that it was not influential enough and did not have the luxury as a developing country to influence other developing countries. Now that China is more of an equal in the relationship, it could afford to resist US pressure to press further on these troubled states. China still does not feel like enough of a world leader to take positions that are more positive for all of humanity. It would like to continue policies that will help feed natural resources to its rapidly growing economy. By now, everyone can see the kind of influence that China has over African countries, several South American countries, ASEAN countries and the countries along the String of Pearls. G-7 is no longer the policy making organization that it used to be, because China is not in there. Even so, China is trying really hard to stop the idea of G-2 while promoting G-20 + BRIC, because it really does not want the responsibility/pressure of being a super power.

This was the year that China really became the financial power of the world. Jim Rogers has repeatedly said in the past that power moves to where money is. If that's the case, then the growing accumulation of China's foreign reserve point to a lot of good days ahead. We have seen USA asking China to continue to buy Treasury Bonds. We have seen IMF selling bonds to China. We have seen countries all around the world asking China for money. G-20 replaced G-8 in determining policies to get out of this worldwide economic downturn, because it needed China's deep pockets. For its domestic economy, China was able to put in a more effective stimulus program without adding much public sector debts (although some would argue for the hidden bank debts). We have seen China buying up resources around the world. After all, why would anyone want to sit on fiat currencies when the central bankers around the world cannot control themselves from printing more money? China dramatically expanded its holding of gold bullion and will probably continue to buy. It continued to acquire mines across the world including the much talked about attempt by Chinalco to increase its stakes in Rio Tinto. When the prices of oil, iron ore, copper, silver and other natural resources dropped, China moved in to buy them at rock bottom prices to creater larger strategic reserves. Australia basically avoided a major recession due to the continued China demand for its iron ore and other resources. Perhaps the most interesting part of China's buying spree is that it has moved beyond foreign debts and natural resources. As companies around the world started to collapse under the tough economic conditions, Chinese companies have started to acquire foreign companies, their branding and their production process. In this past year, the successful bids by Chinese companies for Hummer, Volvo and Saab made headlines. However, there are also many other stories of Chinese companies acquiring Western know-hows + branding at rock bottom prices. More than anything, this economic downturn has shown the importantce of being financially sound. As this downturn continues in the next couple of years, I think Jim Rogers' prediction will show to be really accurate.

For the past 25 years, people have talked about the potential of 1.4 billion people and the huge market created by the growing middle class in the country. Due to the increased savings and declining purchasing power around the world, consumption was down in most other countries causing a collapse in world trade. After a slow 4th quarter in 2008 and early 2009, consumption in China really took off this year with the help of some stimulus policies by the government. The Chinese market finally exceeded the US market in several industry and somewhat feeled the void left by export markets for domestic manufacturers. 2009 could also be remembered as the first year that China's auto market exceeded that of US. While most automakers around the world were suffering due to declining sales in most countries, Chinese automakers were really thriving. BYD, Chery and Geely all had massive growth in sales due in large part to the lower tax for small cars. As a result of this, these automakers now have the capital to really acquire oversea assets, expand capacity, develop newer models and produce higher quality cars for the more mature EU and US markets. In a sign of times, SAIC became the majority stakeholder in its joint venture with GM and will also be producing their joint venture car Wuling for export in India. BYD has made a lot of news for its plans to bring affordable hybrid/electric car models to America and also supplying batteries for Volkswagon. The improved fortune for domestic automakers is part of China's progression of moving up in value chain and becoming an even stronger manufacturing engine. 2009 was a terrible year for shipbuilders around the world, but China managed to move past South Korea for the first time in terms of orders taken and order backlog. In a few years, China will officially become the world's largest shipbuilder. Green industry is another area that recent government policy has really helped. The Chinese solar module industry have became the largest in the world (accounting for 1/3 of photovoltaic cells production). It is now exporting 99% of its production and is causing huge fall in solar module prices by basically swamping the market. China's wind turbine industry is also now the largest producer in the world thanks to the huge wind power expansion in the country + exporting to foreign markets (like the recent A-Power deal in Texas). Even in fields like civilian aviation, trains and nuclear power, you can see that China is slowly entering these markets and moving up the value chain. Due to the fact that China is the only country in the world that is actually having this massive nuclear power expansio and high speed rail expansion, advanced multi-national corporations are forced to provide more know-hows + local manufacturing in order to win those contracts. In the long run, China will probably end up becoming a competitor to them in this area. In the mean time, Airbus, Westinghouse, Alstom and Bombardier can remain highly profitable despite the declining orders around the world. In some ways, you can already see that China is moving up in this field with their nuclear power, airliner and railway exports to developing countries while still buying the latest technology from the west. And really, we can go through a bunch of other domestic industries, but I see a very methodical approach in using domestic market to extract technology and developing local industries. China is getting wealthier, so it can no longer rely on selling cheap clothing, toys and furnitures to walmart to expand. It is moving up in the value chain in manufacturing for both its domestic market and export markets.

I will have a separate ntry on the military growth, since that is the area that I follow the most. Needless to say, there were a lot of headlines this year with the carrier program, the next generation fighter program, the large transport program and the ASBM program.

As I review all that has happened in this past year, I can say for certainty that this was one of the most significant years since the market reforms started. After a revision of its 2008 GDP numbers, it looks like China became the 2nd largest economy in the world this past year. In terms of purchasing power, it reached the position quite a while ago. The financial crisis has only shown the world how influential China has become in the recent years. If 2009 was any indication, China has officially risen to super power status on the world stage. There are a lot of anger toward China around the world, because it's manufacturing strength has crippled many economies around the world. At the same time, it also remains important, because it has now become the largest market in the world for many industries. Regardless, China's emergence has changed the dynamics of the world. Policies are no longer determined by 7 large Western economies, but need the inclusion of the other countries in G-20. The question is how will China react in the coming years as it is expected to do more for the international community.

China Will Pay Very High Ransom to Free Ship

This is worth keeping an eye on. Voice of America.

Somali pirates say they will release a Chinese cargo ship seized two months ago far off the coast of Somalia.

Pirates say they have reached agreement to receive a ransom of nearly $4 million, and will free the carrier De Xin Hai and its crew in the coming hours.

The 25 crewmen on board are said to be safe. The pirates initially threatened to kill the entire crew if China's navy attempted to rescue them.

Four million dollars is a very high ransom, indeed it would be one of the highest ransoms paid yet to Somalia pirates. Four million sets the bar high for the next ship from China that is captured, and may raise the expected ransom fees for everyone else currently held. The high ransom is curious, particularly when China could have held out for half that much. It sends a message that Chinese ships are worth big bucks when such a high ransom is paid. Keep in mind Super Tankers have only paid about $5 million in the past.

This is worth keeping an eye on. The reasons for paying a high ransom may not be obvious now, but may become obvious later.

Saturday, December 26, 2024

A Decade In Perspective

We like to think 9/11 was the event that defined the last decade, but that would not be correct. The correct answer is the South Asian Tsunami of 5 years ago.

Consider for a moment that even if you add up all the casualties from all the terrorist attacks globally since 9/11, include all deaths related to violence in the Afghanistan and Iraq conflicts, military and civilian, the total combined for the whole decade still falls short of the number of people killed on one day five years ago today.

When you think about square pegs, round holes, and how to spend money in influencing change, the 2000-2009 decade is a case study should we ever want to learn from our mistakes.

And people can't figure out why the amphibious ship is the most active ship in the US, or why countries globally are building more amphibious ships? When one factors in other tsunami's, earthquakes, hurricanes, flooding, and other natural disasters globally, the influence of terrorism compared to the influence of mother nature on life and property is disproportionately small given the global expenditures.

Thursday, December 24, 2024

Merry Christmas

Yes, that nerd is yours truly shaking the bell for the Salvation Army a few weeks back with my lodge outside Crossgates mall in Albany, NY. A great time - a dozen men - shaking down New York shoppers for donations. It was very cold. We were very loud, rarely in tune, potentially inebriated, and spreading joy intended to fill all who came into our sphere of influence with the Christmas spirit. If you were one of the many nice ladies who bought us coffee, God bless you!!

Go Hogs in 2010!

A heart felt thank you to all of our nations military men and women for the great work you do. I do not take the freedoms you secure for me and my family for granted, even as I may liberally exercise my freedoms to their full extent. Merry Christmas everyone. Have a safe and happy holiday.

UN Arms Embargo on Eritrea

This is good news, although I am not really sure what good it will do in the long run.

The U.N. Security Council slapped Eritrea with an arms embargo and further sanctions Wednesday for its role in aiding rebels in Somalia and refusing to withdraw from a border dispute with Djibouti.

The council approved the resolution with veto-holder China abstaining and Libya, the current chair of the African Union, as the sole vote against the measure.

The UN is moving to curb arms shipments into Somalia, although I am not sure how effective this will be. Eritrea is widely believed to be one of the major gateways for the Iranian black market into and out of Africa, smuggling that is typically done by sea. Eritrea's claim is that everyone is making it up, beginning with the US, but denials in the face of consistent and at this point overwhelming evidence over a long period of time just makes Eritrea look silly.

This may turn out to be more interesting to watch unfold than you think. The US government has previously linked Eritrea to Iranian arms smuggling, not just for Somalia, but Sudan and Lebanon as well. Could it also be the route used by Iran to smuggle weapons into Yemen as well?

What I find interesting is how much movement globally we are seeing against the countries involved in weapons proliferation, with intelligence being used all of the world to capture various transports from North Korea. The public crackdown on global weapon proliferation is quietly one of the real success stories of the Obama administration in its first year.

Decline of the Maritime Empires

There's plenty of definitional quibbling to be done, but this is pretty cool:

By Pedro Cruz, via Nathan Yau, via Bill Petti.

Incidentally, thanks to all those who commented and e-mailed in response to my syllabus bleg.

DOE to Study Expansion of Nuclear Infrastructure in the US

Building off the last story about COSCO, just in case you don't think this US administration is interested in using nuclear power as a carbon based alternative, I suggest you reconsider your theories. There is bipartisan support in the US for expanding the use of nuclear power, and the nuclear power energy business in the US. This is the latest such example, one that scales directly to the previous conversation. From the New York Times.

Poneman also said he is interested in the possibilities for development of smaller modular nuclear reactors, calling this a potentially important carbon policy option in the United States and abroad. "I certainly agree with the premise that small, modular reactors are a very interesting path to explore," Poneman said in an interview this week.

Sen. Jeff Bingaman (D-N.M.), chairman of the Senate Energy and Natural Resources Committee, is preparing legislation requiring DOE to develop and demonstrate two designs for small modular nuclear plants of less than 350 megawatts capacity, in partnership with private industry. Such smaller reactor models may be needed if costs of full-sized reactors continue to escalate, Bingaman said.

Poneman said the flexibility that smaller modular reactors offer could increase nuclear development opportunities in the United States. "And in the international arena, there are some countries that may not have a grid that would stably support a big, 1,000-megawatt plant, but they might be able to take a smaller, 350-megawatt plant," he said.

Remember, it is still the law in the United States that every new class of Navy warship must be designed with nuclear power. While the theme today is common hull, and there is an exemption clause built in to the law; the law cannot be ignored or dismissed.

Will COSCO Save the Planet - With Nuclear Merchant Ships?

Looking for something interesting to talk/think about on Christmas Eve? I look forward to reading what people have to say about this. Be very careful not to dismiss this without thoughtful consideration, because while there are several good reasons to dismiss, and while hard to believe, this could really happen.

The head of Chinese shipping giant Cosco has suggested that container ships should be powered by nuclear reactors in order to reduce greenhouse gas emissions from shipping, said to account for 4% of the global total. Shipping companies have gradually been introducing 'super slow steaming', a measure designed to cut fuel consumption and substantially reduce emissions by running engines at very low speed. However, Wei Jiafu, Cosco's president and CEO, speaking at the Senior Maritime Forum of the China International Maritime Exhibition (Marintec China) in Shanghai, said that introducing nuclear-powered ships could be an even cleaner solution. He said, "As they are already onboard submarines, why not cargo ships?" He said that Cosco is in talks with China's nuclear authority to develop nuclear powered freight vessels.

How many different angles pro and con can you come up with? Obviously, there are many.

Let’s begin by noting that a merchant vessel with nuclear power is likely going to be gigantic and will require a highly specialized crew. The costs of operating such a ship will be very high, but with its great size, potential speed, endurance, and cost tradeoffs there may in fact be a lucrative profit margin behind such a vessel. It is also important to note that the vast majority of trained nuclear propulsion experts today are American, so to expect American business interests to immediately dismiss this would be to misunderstand the size, scope, and depth of the discussion.

China has never built nuclear powered surface ships of any kind that I am aware of, and the US would immediately be ready to compete in this market if it emerged. Would COSCO buy the ships from a US shipyard? Would their competitors? That would create all kinds of interesting trade regulation dynamics when discussing foreign companies. More likely, COSCO would buy from China with the intent to build a nuclear powered shipbuilding industry in China.

What about accidents and piracy? The seas are not immune to Murphy's Law. What happens when a nuclear powered COSCO ship hits a bridge in San Francisco?

Consider that Russian nuclear powered Icebreakers have been around a long time, and massive nuclear powered ships with reinforced hulls designed for ice travel may be the most cost effective way to move large quantities through the Northwest Passage from Europe to Asia during all seasons. The Canadians are going to love that.

These reactors can be built to support replacement and life span, meaning one can calculate costs at construction with nuclear power. The Shipping Industry today cannot due to price uncertainty for energy.

The political ramifications will be enormous, from national security to environment; the range of policy issues will be quite large. Many countries do not allow nuclear powered ships in port, although with ships as large as the ones likely envisioned by COSCO, most countries who object may not have the facilities or the demand to support such large ships. For example, Canada may reject allowing such a ship into their country, but the US may allow nuclear merchant vessels into specific ports. It would be interesting if it ever became more efficient for China to ship into the US on large nuclear ships, then rail cargo into Canada instead of shipping directly to Canada. That is just an example, because I can envision a scenario where Mexico allows huge nuclear ships, and California, Washington, and Oregon did not.

Obviously this is a huge discussion and I am barely touching the possibilities for discussion. With that said, be careful not to dismiss the possibility that China would do this, particularly when one considers how many ports globally China, in particular COSCO, is heavily invested in globally.

When It Pays to Do Nothing

I was reading comments on piracy by British Foreign Secretary David Miliband in this Reuters article, and it has me thinking out loud.

In the Reuters article, Miliband states the British government will not commit extra resources to the piracy problem that has expanded to the Indian Ocean, and while he is on the subject of offering no extra assistance, he also tells commercial shipping companies that the British government discourages ransoms. I guess he would hate for the insurance companies to have to spend any money collected from... piracy insurance?

Insurance underwriters in London are clearing somewhere in the neighborhood of ~$500 million US in additional premiums annually thanks to Somali piracy, and collections will increase in 2010 with the recent announcement war-risk insurance will extend to every ship that travels within 1000 miles of the Somalia coast. Does anyone know how much of that ~$500 million is potentially collected as tax by the British government?

The Royal Navy currently has 9 warships at sea in that region, but none are currently conducting anti-piracy patrols. Why should they, the British government has become so cheap when it comes to the Royal Navy maybe the extra revenues from piracy related war-risk premiums will provide enough funding for a full years worth of Royal Navy fleet operations in 2010?

Well, I did say maybe.

It is a few months old, but a good CRS report on the costs of piracy can be found here (PDF).

Wednesday, December 23, 2024

Russian military story

This morning, I saw a bunch of news crossing the wire regarding Russian military industry. It was really interesting to read Galrahn's entry on Russian navy, because it pretty much agreed with these articles that I saw today. Russia is still doing really well at airplanes (especially fighter jets and helicopters) and submarines, but is really struggling with construction of large warships.

Over the past couple of years, Russia have seen China and India both cutting down their military purchases from Rosoboronexport. The Southeast part of Asia has really emerged as a primary destination of Russian military exports. In cases such as the one below with Vietnam, their military purchase selection is basically a typical Southeast Asian country effort to prepare against the emerging Chinese military.

MOSCOW, Dec. 21 (UPI) -- Russia and Vietnam have signed a string of arms deals, including Hanoi's purchase of submarines and jet fighters from Moscow.

The deals elevate Vietnam to one of the top clients of the Russian arms industry and revive ties between Moscow and the former Soviet-era ally.

The agreements were signed during a recent visit to Moscow by Prime Minister Nguyen Tan Dung and in the presence of Russian Prime Minister Vladimir Putin.
"Vietnam signed contracts for the purchases of submarines, planes and military equipment with the corresponding cooperation of the Russian side," the Vietnamese prime minister told reporters after inking the deals.
No details of the agreements were afforded by officials on either side.
Still, Russian news agency Interfax quoted unnamed sources as saying that Russia would sell Vietnam six diesel electric Project 636 Varshvyanka submarines for a total price tag of $2 billion.
The submarines are known within the North Atlantic Treaty Organization by the nickname Kilos. The submarines are set to be built for the Vietnamese navy
at a rate of one per year, Interfax reported.
The agency also cited unidentified Russian officials in claiming that Vietnam would purchase 12 more Sukhoi Su-30MK2 fighter jets for $600 million.
Hanoi has already ordered and is awaiting delivery of eight similar aircraft from Russia in 2010. The Russian exporter will be Rosoboronexport.
The arms deals also included an agreement for the construction of Vietnam's first atomic power plant, a lucrative -- and controversial -- project that has drawn the keen attention of the West and potential foreign partners.
Despite the global economic slowdown, trade between Vietnam and Moscow has flourished by an estimated $1.16 billion in the first nine-month period of 2009.
Concern, however, has primarily spawned from the latest arms deals between Russia and Vietnam. The weapons purchases, in fact, have come at a time of
increasing tension in the South China Sea, which Hanoi calls the East Sea.

The dispute focuses on the sovereignty of the oil and gas-rich Spratly and Paracel island chains for which Vietnam and China have competing claims. Several other Asian countries also claim part or all of the Spratlys.

A regional defense analyst told the BBC that the rising tension in the South China Sea was "clearly a source of concern" to Hanoi. The submarine acquisition would "increase Vietnam's negotiating power in the maritime disputes," the BBC
reported quoting Professor Carlyle Thayer of the Australian Defense Force Academy as saying.
Earlier this year Vietnam demanded China investigate allegations that armed Chinese personnel beat and robbed Vietnamese fishermen who sought shelter on the Parcels during a typhoon.

This article is kind of interesting, because China has been seriously competing against Russia in countries like Myanmar, Thailand, Sri Lanka, Bangladesh and Indonesia. A lot of times, China has been winning out recently. This time, Russia managed to win out with the a more advanced version of Mig-29 fighter jet (SMT variant) to beat out JF-17 for this order.

MOSCOW. Dec 23 (Interfax-AVN) - Officials from Russia and Myanmar
have signed a set of contracts on the delivery of Russian combat
aircraft and other weapons to Myanmar, a source in Moscow's military and
diplomatic circles told Interfax-AVN on Wednesday.
"The backbone of this package is a contract on the delivery of 20
MiG-29SMT jet fighters to Myanmar. Deliveries of helicopters and other
military purpose products are also expected to be made to Myanmar," the
source said.
The package of deals is estimated at more than $600 million, he
said.
"The first MiG-29SMT planes are expected to be sent [to Myanmar]
next year," he said.
Russia's state arms trader Rosoboronexport and the MiG Corporation
have declined to comment on the report.
The MiG-29SMT is a qualitatively new version of the MiG-29 light
frontline jet fighter. The new airplane is equipped with a wide range of
air-to-air and air-to-surface airborne weapons and is designed for high
precision operations against air-, land-and sea-based targets. The
modernization has helped triple the combat efficiency of the MiG-29SMT
and reduce the cost of its use by around 40%, as compared with the basic
MiG-29 version.

And just to rehash on the previous entry a little bit. Antaoly Serdyukov admitted to importing helo carrier, but developing its own stealth bomber. While both are extremely complex projects, I would consider a stealth bomber project to be even more difficult than building amphibious ships (just looking at the number of nations being to independently produce each). So even though the Russian military aviation sector is not as strong as 1989, the military still has a lot of faith that it would be able to design and produce state of art systems. As Galrahn said, they simply don't have any faith in the shipbuilding industry.

Dec. 23 (Bloomberg) -- The chances are “very high” that
the Russian military will buy a helicopter carrier abroad,
Interfax reported, citing Defense Minister Anatoly Serdyukov.
Russia is still studying the issue, the Moscow-based news
service reported, citing Serdyukov.

MOSCOW, Dec. 22 (UPI) -- Russia's new strategic bomber
will use stealth technology, a senior military official said
Tuesday.
Maj. Gen. Anatoly Zhikharev, commander of Russia's
strategic aviation, told RIA Novosti the stealth technology
will make "the new aircraft difficult to detect by radar,
although it is impossible to make airplanes of this type
completely invisible."
Russian officials say the new type of bomber is expected
to debut between 2025 and 2030 and is meant to replace the Tu-
95MC Bear and Tu-160 Blackjack strategic bombers, as well as
the Tu-22M3 Backfire long-range bombers now being used by the
country's strategic air forces.
Zhikharev added, however, that Russia's Tu-160 bombers
(which, sources say, currently number 16) and its fleet of Tu-
95MS and Tu-22M3 bombers will continue to form the backbone of
its air defenses after extensive modernization efforts.
"We expect to receive two upgraded Tu-160 planes from
the Kazan plant and will have two more aircraft in for repair
by the end of December, so this process is continuous,"
New Russian bomber to have steal
Zhikharev told RIA Novosti.

A PLA Navy Microcosm - All in One Year

News reporting from China indicates the fourth Chinese naval escort taskforce consisting of the Type054 frigates PLAN Ma’anshan (FFG-525) and PLAN Wenzhou (FFG-526) has been joined by the Type 054A frigate PLAN Chaohu (FFG-568) this week, marking the first time that China has had three warships deployed off Somalia. The fourth Chinese naval escort taskforce is supported by the PLA Navy support ship Qiandaohu.

My first impression is that this deployment is intended to allow the PLA Navy to continue conducting escorts with two warships while maintaining a continuous presence off the coast near the hijacked Chinese coal-carrying vessel De Xin Hai with 25 crew members on board. It is unclear which PLA vessel is keeping an eye on the hijacked vessel, but the PLA did publish some nice pictures of PLAN Ma’anshan (FFG-525) sailors exercising for contested boarding operations yesterday.

It may also signal a permanent change to the PLA Navy's commitment off Somalia. In recent news reporting it was noted that the fourth Chinese naval escort taskforce will be adapting its strategy to deal with the changing conditions off Somalia. It listed changes in the behavior of pirates including a few interesting details I had not seen reported.

Pirate attacks are now taking place at all times of day, not just in the early morning. We already knew pirate attacks are taking place much further out to sea, indeed the Chinese note this as the De Xin Hai was pirated 1000 nautical miles from Somalia. The Chinese are acknowledging problems associated with an increase in pirate activity in the Mandeb Strait, off the coast of Oman, and noting increased activity around the Seychelles Islands, even though these are areas China has not conducted escort operations in the past.

However the news report also noted two interesting tactical changes in piracy, the first being that small boats are being loaded up with plenty of fuel for long distances and are more often attacking in coordinated numbers, instead of as single vessels. The other notable change is that the level of violence in attempting a hijacking has increased; noting that an increase in the use of RPGs and machine guns actively firing on commercial ships is on the rise during attempted hijackings.

None of this is new, right? Well, it is worth noting that China becomes the first nation to increase the size of their naval commitment against piracy in reaction to the increased range of attacks by pirates. Obviously other factors are contributing here, but it is also worth noting that with three warships and a large support ship now patrolling off Somalia, the PLA Navy now has at least as many naval ships as any other Navy contributing to the anti-piracy activities off Somalia, and the PLAN now has more gross tons of naval power off Somalia than every other Navy except the United States.

China still refuses to take an active leadership role as part of an international coalition against piracy, but it would appear they have no problem being a major visible contributor towards the shared security challenge of Somali piracy.

I think it is interesting that China's first naval deployment to fight piracy began in December of 2008, and one year later, December 2009, China now represents one of largest contributors to anti-piracy off Somalia. I see the anti-piracy mission by the PLAN as a microcosm of the pace of PLA Navy operational growth right now; a rapid pace matched only by the growth of the PLA Navy fleet itself.

Десантные корабли

We have previously covered in detail Russia's interest in purchasing an amphibious ship from both France and the Netherlands. Based on the details of this Defense News article, we should have included Spain in that analysis, although there is a lot of similarity between the Dutch Rotterdam class and the Spanish Galicia class.

Russia's interest in purchasing amphibious ships isn't solely about ships though, it is really about technology and industrial development with Russia's shipbuilding sector. Picking out some of the details in this RIA Novosti article we get a better feel for the reasons the Russians are keen on help from Europe.

First lets establish the real Russian intention here:

"The Russian side reiterated its position that it needs not just one warship but technology to enable it to build such ships at Russian shipyards," he said.

More than anything else, Russia is looking to import skilled labor from Europe's shipbuilding sector to help fix the problems Russia has with specific technical skills but also experienced project management staff within their shipyards. The human element to bring skill and talent into the Russian shipbuilding industry is the major factor here, because the domestic production element will allow Russia to attempt a rebuild at just about the same time the Russian Navy disappears.

The article goes on to discuss the Mistral class specifically:

The chief of the General Staff earlier said that Russia would decide by the end of 2009 whether to purchase a Mistral-class amphibious assault ship from France.

The Defense Ministry has said a final decision should be based on "a thorough assessment of the effectiveness of [French] technology in the framework of domestic shipbuilding program."

The assessment to determine if DCNS can build and manage a domestic production in Russia for at least 4 more of the ship class is only part of it, the technology transfer being the other part. The Mistral represents many things for Russia including technologies such as a modern command-and-control suite, combat data and management systems, automation technologies to allow for fewer crew members, and electric drive propulsion for surface vessels. While Russia has some experience with electric drive, the Mistral represents modern western naval architecture and insights into how to build better surface warships with electric drive.

All of this will be critical to Russia if they are to rebound from the impending disappearance of the Russian Navy from the worlds oceans.

Finally, lets examine the Russian view in context:

Russia's current arms procurement program through 2015 does not provide for construction or purchases of large warships, so the acquisition of a French warship is more likely under a new program, through 2020, which has yet to be developed.

This is a very important detail to the entire discussion, because it takes the long view through the prism of economics and strategy and helps us understand how this might unfold.

I am in full agreement with Alexander Khramchikhin. If you missed it, Dr. Dmitry Gorenburg translated this article on his Russian Military Reform blog.

[The Bulava's] effectiveness has turned out to be simply amazing. The missile has not entered serial production, and never will, but it has already destroyed the Russian Navy. Almost all the money allocated to the Navy’s development have been spent on this mindless dead-end program.

Any person who can see the real situation well understands that in a few years the Russian Navy as a whole, as well as all four of its component fleets, will cease to exist. This is already absolutely inevitable — the situation will not be changed even by mass purchases of ships from abroad.

In light of this, it is especially amusing to observe the fierce “battle for Sevastopol.” Why do we need it after 2017? To pay Kiev enormous sums to rent empty piers? By that time, at best the Novorossiisk naval brigade will be all that’s left of the Black Sea Fleet. And the discussion of whether we need a blue-water navy or a coastal one is a complete farce. We won’t even have a coastal force — the maximum that our “navy” will be able to accomplish in ten years is the immediate defense of a few main naval bases. Because we built the Bulava.

I think there is a lot of truth to the melodramatics expressed in that opinion. The Russian military budget has thrown money at the Russian Navy, so naturally one would expect the Russian Navy is on the rebound? Hardly.

Next year the Russian Navy expects to launch a single new surface combatant - a Project 20380 corvette - and three nuclear submarines. However, I am unsure that is entirely correct information, because the only three Russian nuclear submarines ready to be completed are the Severodvinsk, a Project 855 Yasen (Graney) class nuclear submarine, the Alexander Nevsky, the second Project 935 Dolgorukiy (Borei) class nuclear ballistic missile submarine, and the Nerpa, the Project 971 (Akula II) class nuclear attack submarine expected to be leased to India. Perhaps the third submarine for Russia will be the Sankt Peterburg, Project 677 Petersburg (Lada) class diesel-electric submarine?

Doesn't really matter though, right now the foreign investment for frigate exports to India and submarine exports to Vietnam and Indonesia is all that is keeping the shipbuilding industry in Russia on life support, completely unable to modernize. Financing has become a huge problem for the modernization efforts to the defense industrial base of Russia, and without a significant increase in the price of energy Russia's economy is unlikely to rebound very quickly. Russia's attempts in military modernization are not going very smoothly, indeed 36,000 officers were laid off this year alone - and it will take the better part of the next decade to build the non-commissioned officer corps desired in the Russian military reform. All of the defense equipment purchases listed by Medvedev in his State of Russia speech in November were items that are around a decade old, with no new modern aircraft, ships, or Army equipment making the list. Indeed, even the nuclear missile procurements announced included 16 Sineva nuclear missiles for Delta-IV SSBNs and some Topol-M and RS-24 ICBMs, all of which have been around over a decade.

With the recent Bulava missile failure, the continuation of the Borei line of ballistic missile submarines may be in doubt, and no plans to purchase production Balava missiles for existing Borei submarines was mentioned for 2010 by Medvedev. Bottom line, Russia gambled with heavy investments into their strategic nuclear arm at sea with the Borei/Bulava combination, and the gamble did not pay off.

Just as the US Navy is going to experience rapid retirement in the near future due to our rapid naval buildup in the 1980s, what is left of the Russian fleet is about to experience its own rapid retirement. They are clearly getting desperate for working hulls when making serious comments about modernizing old Kirov class cruisers, but the truth is Russian naval officials are out of other alternatives. They can't afford new construction because the yards need modernization, and the yards that can produce ships are on life support filling export orders. That leaves Russia with few options other than to look to Europe, and France in particular would be the ideal place to start.

The reason appears to be French Prime Minister Francois Fillon, who is quoted in this Jamestown Foundation article discussing the Mistral deal.

French officials are now also starting to speak about a Franco-Russian “modernization partnership.” This seems designed for France to emulate Germany’s officially declared “modernization partnership” with Russia and to catch up with Germany in Russia’s estimation at least politically, if not in overall capability. During Putin’s visit, French energy companies announced intentions to join Gazprom’s Nord Stream and South Stream projects. For its part, Renault is prepared to rescue Russia’s insolvent automobile producer AvtoVaz (Interfax, Le Monde, Le Figaro, Les Echos, November 25-30).

Fillon has emerged as a leading figure in France’s rapprochement with the Kremlin, on the intertwined tracks of strategic security policy and business deals. At the 2008 NATO summit, Fillon publicly opposed the Georgian and Ukrainian membership action plans, arguing that their approval would upset the balance of power to Russia’s detriment. At present, Fillon actively promotes the Mistral sale to Russia, which could dramatically tilt the balance further against several NATO countries, Georgia, and Ukraine. The French discussions with Russia, under way for several months, ignore NATO and EU procedures on military equipment exports.

According to Fillon and other French officials, “It would be impossible to call for continental stability in partnership with Russia if we refuse to sell armaments to Russia. A refusal would amount to contradicting our own discourse” and obeying “the old reflexes” (Le Figaro, November 26; Agence France Presse, November 27).

The Republicans in the Senate apparently read the Jamestown Foundation's analysis, because their action today adds yet another element to the ongoing discussions by Russia to partner with France to build amphibious ships. The Cable has an outstanding article that covers the political happenings.

The friction between top GOP leaders in Congress and the French government is over the Mistral-class amphibious assault ship, which the French are considering selling to the Russian Federation. As the biggest potential arms sale from a NATO country to Russia, U.S. lawmakers are worried this could set off a chain reaction of NATO arms sales to Russia. Plus, they share the concerns of Georgia and the Baltic states that the ship could allow Russia to increase its aggressiveness in its near abroad.

So what does this have to do with Iran sanctions? Well, The Cable brought you exclusively the story of how the State Department wants changes in the Chris Dodd Iran sanctions bill that's currently pending in the Senate. Basically, the Obama administration wants exemptions for countries that cooperate with American sanctions against Iran. France presumably would be at the top of the list.

But a senior GOP Senate aide told The Cable that Republicans negotiating over the Iran sanctions language would not allow an exemption for France or French companies if the Mistral deal goes through.

"Whether or not France gets an exemption could very well depend on whether France decides to sell this ship to Russia," the aide said, explaining that "it's possible to draw that exemption narrow enough so that the president could not possibly exempt France."

The Cable obtained a copy of the letter by French Ambassador Pierre Vimont responding to Republican concerns to the French Mistral sale. However, The Cable article goes on to note "France won't go by the Wassenaar Arrangement on Export Controls or the European Union Code of Conduct for Arms Exports, as the Senators had wanted."

Maybe I am missing something here, but it does not appear that France is out of line regarding the procedures for military exports as outlined by either the Wassenaar Arrangement on Export Controls or the European Union Code of Conduct for Arms Exports. Indeed, one of the more remarkable characteristics of this deal is how transparent both Russia and France have been.

With the Russian Navy about to disappear entirely, it is very difficult to say that even a half dozen Mistral class ships would somehow create a balance of power issue with Europe. It is very much unclear what national interest the Senate Republicans are protecting here. Are the Senate Republicans honestly putting the possibility of a Russian Mistral amphibious landing against Georgia in 2020 ahead of the possibility of an Iranian nuclear weapon in 2010? Well that's stupid, why not simply have a Georgian aircraft import some illegal North Korean anti-ship missiles and ruin Russia's day without all the international political blow back?

Regardless of any potential political maneuvers by Republicans in the Senate, or the US government in general, France is almost certainly going to make the deal with Russia, as the deal carries economic value to both countries. The only thing the Senate Republicans can do is disrupt relations between the US and 2 other security council members right before the UN votes on Iranian sanctions. The absence of strong UN sanctions is almost certainly going to make everyone jittery about the potential for a military confrontation between Israel and Iran, which is sure to make energy prices climb above the forecasted $60-$70 range. Given that Russia's economy can only improve with higher energy costs, can someone please show me the strategic logic of US involvement in the Mistral deal here?

At some point, the old cold war crowd needs to accept that the cold war ended, and we won. It is time to build a better future already, one where we don't have to fear the once mighty Russian conventional weapon capacity, rather build a stable world where the once mighty Russian doesn't feel compelled to rely upon their quickly diminishing nuclear weapon capability.