Sub-Optimal

The Australian government’s recent decision to purchase 12 new submarines will shape Canberra’s foreign policy and Asia’s regional politics for the next half century. Its process for buying them will thus be watched anxiously by the region’s heavyweights, the United States and China; the aspiring vendors France, Germany, and Japan; and smaller countries worried about their neighborhood’s future security.

These submarines will allow Australia not only to defend its own territorial waters but to project power in more distant strategic regions such as the Strait of Malacca and the South China Sea. Its recent defense white paper notes that “future operations could include contributing to security in North Asia and helping to protect the extensive sea lines of communication that support Australian trade.” This is welcome news for the United States, which has encouraged Australia and other allies to step up its efforts to resist what it views as Chinese expansionism. Whereas France and Germany view selling submarines to Australia as an important and lucrative addition to their considerable defense exports, the deal means more for Japan, which not only is trying to tie Australia to a mutual cause of maintaining the regional status quo but also seeks to export weapons for the first time since World War II.

Although some analysts worry about upsetting Australia’s largest trading partner, China, most public statements by U.S. and Australian foreign policy hands, such as in a recent Wall Street Journal op-ed, have strongly favored the Japanese bid for reasons that have little to do with its capabilities as a weapon. They instead argue that a sale between the two powers would cement their developing informal alliance and have immense strategic value for the containment of China. The United States is rumored to agree with that assessment and to quietly favor the Japanese bid. Not surprisingly, China is opposed to the so-called Option J.

Such hypotheticals make for good press, but to quote the well-worn military saying, amateurs talk strategy; professionals talk logistics.

Submarines are weapons first and foremost, which need the capacity to deliver a great deal of violence (or deterrence) at long range without breaking the bank. Price, performance, and production schedules are therefore key. A recent Australian defense white paper estimates that designing and constructing the fleet of 12 will cost more than AUD$50 billion, or over U.S. $37 billion. Operations and maintenance will add another AUD$100 billion, or U.S. $75 billion.

To put the stakes in perspective, consider the United States’ Joint Strike Fighter, which Winslow Wheeler, the director of the Straus Military Reform Project at the Center for Defense Information, dubbed as the “jet that ate the Pentagon” owing to its spiraling costs. The JSF’s current price tag stands at about $400 billion, approximately two-thirds the annual budget of the U.S. Department of Defense. Australia’s initial estimate for its submarine is more than one and a half times the country’s 2015–16 defense spending. In other words, Australia’s budget seems in far greater danger of being devoured.

Submarines are complicated industrial products, and Australia’s requirements are particularly demanding. Given Australia’s large geographic size, wide-ranging interests, and remote location from likely submarine patrol areas, these vessels must transit long distances quickly and still be able to do their mission upon arrival. Australia is determined for the ships to carry a U.S. combat system and heavyweight torpedo that has never been incorporated into any of the competitors’ boats. In turn, all of the proposals constitute daunting collections of highly technical considerations that come with risks that vendors, like contractors hoping to build your new kitchen, will underplay while making their pitches. The French candidate will require a diesel propulsion system instead of its current nuclear one. Germany will have to roughly double the size of its existing Type 214 model. And the Japanese have never exported a major weapon, much less produced one in another country (a condition of the contract designed to bring jobs to South Australia).

Given its recent history with such proposals, Australia should be nervous. Its Collins-class submarine project, built in Australia using a revamped design of a smaller Swedish submarine, is a punch line in defense acquisition circles. Suffering from cost overruns and production delays, designed with a poorly conceived combat system that had to be replaced, and plagued by an ineffective life-cycle maintenance plan, the Royal Australian Navy fleet still does not meet benchmarks for the number of days the ships can be at sea.

This time around, Australia cannot lose sight of the task of meeting its ambitious performance criteria for a reasonable amount of money with the minimum of delays. Beyond that, the geopolitical benefits or costs of siding with one country’s design over another’s will be relatively marginal. And besides, the inclusion of a U.S. combat system will largely hitch the country to the United States’ Pacific strategy in any case.

That is why the United States avoids pressuring Australia for reasons of “strategy.” Far better for it to act as an explicitly honest broker in helping Australia pick the product best suited to its military needs. For all its flaws, no other entity can handle the technical aspects of military acquisition like the Pentagon. Its Naval Sea Systems Command, responsible for designing, building, and maintaining U.S. warships, employs more people than the entire Australian Department of Defence. Such analytic capacity, used in good faith, would go a long way in ensuring that Australia picks the submarine design with the most capability and least risk.

The United States has some experience with such support. In the 1980s, Israel’s ambitious Lavi fighter jet was intended to match the United States’ F-16 in capability—an unprecedented project for a small country with a tiny aerospace industry. Troubled by rising costs (and a potential competitor to its own hardware), the Pentagon pulled together an ad hoc team five times larger than the Israeli Defense Ministry’s entire office of program analysts. This group helped kill the counterproductive Lavi plan by sticking to facts, pointing out the project’s unrealistic technological assumptions and underestimated production costs. These were problems that Israel did not have the capacity (or the will) to discover for itself.

Besides leading to a better-value submarine, avoiding an even implicit U.S. endorsement of the Japanese proposal will avoid ruffling the feathers of France and Germany, who are also important U.S. allies. At the end of the day, even China might believe that the United States had been evenhanded.

Submarines are an essential, if not the most essential, component of the maritime strategy of any regional power in Asia. China is projected to have 70 submarines of varying capabilities by 2020. The United States currently has 57 attack submarines but forecasts that its inventory will drop to 41 in 2028. Delays or, worse still, reduced numbers of Australian submarines will alter the undersea balance in the region. And that makes it all the more important that Australia get the submarines it needs without draining the defense budget. A budding military alliance in the Pacific is of no consequence if there is no military to underpin it.