Southeast Asia, explained.
Supply and demand factors can also limit the sales of American-made military equipment to Southeast Asia (Samantha Mussatti/US Army Reserve photo)
Diversification seems to be the mantra.
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Southeast Asia’s arms suppliers, by the numbersSoutheast Asia’s arms suppliers, by the numbers
From 2004 to 2023, Southeast Asian countries spent more than US$42 billion on weapons. Russia was the largest arms supplier in terms of value – cornering 25% of the Southeast Asian arms market – although its share dwindled in later years.
Data from Stockholm International Peace Research Institute (SIPRI) shows that in the years until 2019, Russian-made military equipment was well received by regional states. The popularity of Russian arms was shaped by the perception that its sales are less politically conditional than Western supplies, which makes them attractive to countries seeking greater independence in defence policy.
However, in the years since, Russia’s share of the region’s arms market has declined. In 2017, the United States introduced the Countering America’s Adversaries Through Sanctions Act (CAATSA), which could lead to sanctions against any states acquiring weapons from Russia. Indonesia, for example, chose instead to acquire non-Russian combat aircraft, such as the Rafale and F-15EX.
Russian-made equipment also comes with high maintenance costs. Malaysia has pointed to this factor when announcing that only four out of 28 Russian-made combat aircraft in its fleet could fly.
But the decline of Russia’s market share also stems from its invasion of Ukraine, which has limited the supply chain for Russian-made military equipment. Regional officials complain about the difficulty obtaining Russian parts – Vietnam, for instance, is keen to diversify the source of its arms supply.
The United States has long been one of the most significant arms suppliers to Southeast Asian states. Washington provides a broad range of military equipment, including combat aircraft, naval vessels, and advanced missile systems. The arms sales to Southeast Asia are often tied to strategic considerations, such as maintaining influence in the Indo-Pacific region, countering China’s growing influence, and bolstering regional stability.
Singapore is the largest market for American-made military equipment. The island-state’s acquisitions tend to focus on the air domain, such as F-15E combat aircraft and air-to-air and air-to-ground missiles. Indonesia’s acquisitions of American-made military equipment are broader, and cover the air, maritime, and land domains, such as engines for its armoured vehicles and warships.
However, supply and demand factors can also limit the sales of American-made military equipment to Southeast Asia. On the supply side, the United States is cautious about protecting its advanced technology and only exports high-tech military equipment to its most trusted partners. For example, Washington acceded to Singapore’s request to purchase 12 F-35 combat aircraft, rejecting requests from Thailand and Indonesia.
On the demand side, potential regional buyers are deterred by the high-cost American-made military equipment, the many conditions and restrictions Washington attaches to any sales, and the potential embargo Washington may impose if bilateral relations worsen. Indonesian defence officials often recall the arms embargo Washington imposed on Jakarta from 1999-2005 to justify the diversification of arms procurements. The US decision to suspend military assistance to Cambodia in 2010 over human rights disputes is also remembered in the region.
China’s share in Southeast Asia has increased in the past two decades. For Beijing, arms sales are used to dilute Washington’s security role in the region.
A case in point is China’s arms sales to Thailand. While it is a US treaty ally, Bangkok has turned to China for military equipment such as tanks and air defence systems. In fact, Thailand has acquired more arms (in terms of value) from China than the United States.
China is likely to face hurdles in its bid to sell more arms to Southeast Asian countries. It has territorial disputes in the South China Sea with Brunei, Malaysia, the Philippines and Vietnam. Moreover, there are doubts over the export-version of its military equipment, shown by the death of several Indonesian personnel operating a Chinese-made air defence system in 2017, along with complaints about China-made vessels for the Royal Malaysian Navy.
Such concerns will encourage the region to buy weapons from a broader range of countries. Southeast Asian states are concerned about the strategic competition between the United States, China and Russia. Partly to avoid political entanglements with these great powers and due to budgetary constraints, regional states will likely look at other actors such as France, Germany, and South Korea, thus opening up the regional arms market to more competition, but also opportunities for other arms suppliers.
About the author
Rahman Yaacob
Dr Abdul Rahman Yaacob was a Research Fellow in the Southeast Asia Program at the Lowy Institute.
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