Spurred by tensions with China, Southeast Asian nations are building up their own defense industries, channeling fast-growing military budgets to develop local expertise and lower their dependence on big U.S. and European arms suppliers.
While countries such as Indonesia, Thailand and Malaysia won't do away with big-ticket imports from giants like Airbus or Lockheed Martin, they are increasingly encouraging domestic defense firms to manufacture hardware locally. With regional defense spending seen rising to $40 billion in 2016, 10 percent higher than last year, some countries are already developing their own exports.
A domestic defense industry is a long-term economic as well as security goal of varying degree for the 10 countries in the Association of Southeast Asian Nations (ASEAN), spending more on modernizing ageing equipment partly to retain the region's military balance. The goal has been given urgency by China's moves in recent months to press disputed claims in oil- and gas-rich waters of the South China Sea, security analysts say.
ASEAN members have stopped short of explicitly citing Beijing as a reason for beefing up military capability. At a meeting in Myanmar last weekend, ASEAN foreign ministers again appealed for "self-restraint" in the face of heightened tensions, with no mention of China in a formal communique.
"This drive to ensure sovereignty is now at the foremost of all governments' minds in the region," said Jon Grevatt, Asia Pacific defense industry analyst with IHS Jane's. "Obviously the activity of China has raised the issue of protecting, securing territory."
China, whose military spending topped $145 billion last year according to U.S. estimates, claims about nine-tenths of the South China Sea. It has alarmed Southeast Asian diplomats this year with assertive moves like planting a giant, $1 billion oil rig in waters claimed by Vietnam.
A build-up in China's coastguard fleet has also allowed Beijing to beef up its maritime presence without deploying warships. Some in the region have sought to counter that like-for-like: In a package due to take effect this month, Vietnam has set aside 11.5 trillion dong ($543 million) to be used to buy 32 coastguard and surveillance ships.
Southeast Asia's defense spending grew 5 percent to $35.9 billion in 2013, data from the Stockholm International Peace Research Institute (SIPRI) showed, and is expected to rise to $40 billion by 2016. The region's defense spending has more than doubled since 1992, according to SIPRI.
Defense procurement in Southeast Asia is still dominated by government purchases of big-ticket items like jets or submarines from Western defense suppliers such as Lockheed Martin of the United States, France-based Airbus or Germany's ThyssenKrupp AG. The region became the world's second-largest importer of military equipment and technology after India.