HOW MIGHT THE FINANCIAL IMPLICATIONS OF THE COVID-19
CRISIS IMPACT ON THE FUTURE OF NAVIES?
“If money is the bond that binds me to human life, that binds society to me and me to nature and men, is not money the bond of all bonds? Can it not tie and untie all bonds? It is the galvano-chemical power of society?”1
The first line of defence for many nations is their Navy be it safeguarding blue, green or brown waters. Sea lines of communication are vital when safeguarding a nation’s lifeblood – trade. If Marx was correct and money can indeed ‘tie and untie all bonds’, then for those constrained by their geography to use the sea, especially island and archipelagic nations,
there are grave security implications associated with global economic fragility. This paper’s first iteration considered the effects on navies of the Global Financial Crisis of 2007-2009. More than a decade later some navies are only just recovering their equilibrium in regard to its pernicious effects in areas such as acquisitions and sustainment. The Corona virus or COVID-19 pandemic has and will continue to shake the global commons to the core across all elements of national power. This will be described as well as
an outline of how the pandemic might affect navies in considering their ability to employ Principles of War in supporting strategy in a maritime environment. The results of today’s pandemic are likely to be more akin to the GFC on steroids, although if we are lucky not as egregious as the great depression, which it is generally accepted arose from multiple causes.
The 2016 Australian Defence White Paper identified six key drivers that would shape the development of Australia’s security environment until 2035. The closest it came to a pandemic was “state fragility, including within our immediate neighbourhood, caused by uneven economic growth, crime, social, environmental and governance challenges and climate change.”2
Perilous Paths
In a sustained recession or depression, perhaps the most important consideration from a military perspective will be the outcome of a ‘risk versus gain’ political analysis of whether or not to cut defence expenditure. The impact of this pandemic will inevitably affect all the elements of a nation state’s power. Navies will certainly not be exempt from its deleterious effects. That navies are neither formed nor operate outside the influences of the elements of National Power (the DIME construct) is an important consideration when discussing the possible impacts of COVID-19. Navies, as part of the military arm of government, are woven into the fabric that holds together the societies they serve and protect. Eighty years on from the beginning of the Second World War, modern Western societies, both continental and island based, appear to have forgotten their dependence on the sea and moreover, their navies.
Nearly three quarters of this planet is covered by water. Ninety percent of the world’s commerce travels by sea and the overwhelming majority of the human race exists within a few hundred miles of the ocean. A British First Sea Lord highlighted the importance of the maritime environment when he accused politicians of “sea blindness” and “losing the ability
to think strategically”. “People have no idea that their lights are staying on because of liquid gas arriving in Milford Haven daily. There is a world out there with a huge maritime element. I mean, we call it earth; we should call it the sea.”3 The chronic global shortage of personal protective equipment during the pandemic has highlighted the dangers of a global economy based on just enough, just in time (JEJIT) and buying from the cheapest supplier. In its 2019 election manifesto Labor committed to creating a National Fuel Reserve. As Bill Shorten described: “As a member nation of the International Energy Agency, we’re supposed to hold the equivalent of 90 days’ worth of fuel on reserve. Right now, we have just 23 days of jet fuel, just 22 days of diesel and only 19 days of automotive gas. 4 Perhaps the pandemic will refocus governments to identify those areas in which a reliance on JEJIT and single suppliers for essential goods is simply not
acceptable in wartime or a national warlike emergency.
Introducing the new DIME 5
Diplomatically the fallout of President Trump’s “Chinese virus” is only just beginning. In an election year, Trump is now a self-defined ‘wartime president’ and in the event he is re-elected he will then have four years to begin the task of re-energising the United States and concentrate its economic and manufacturing power away from an invisible enemy toward
COVID-19’s tangible originator, China. As Gensui kaigun-taishō Isoroku Yamamoto may once have said about the United States “I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve.”6 Around the globe leaders will be viewed on their perceived successes and failures to control and recover from COVID-19. After the fear of
infection has passed it is likely some governments will pay the price of failure and across many nations it is inevitable we will witness renewed widespread civil unrest. “I think what makes 2019 remarkable is the sheer quantity and circumstances of civil resistance,”7 It is unlikely that green parties, having witnessed clear skies over so many cities, will remain
silent nor that the likes of ‘Extinction Rebellion’ anarchistic movements will become extinct or the Hong Kong protests fail to resume. Seventeen years ago severe acute respiratory syndrome (SARS), another corona virus
originating in China, killed less than 800 people. Perhaps unsurprisingly, the Chinese government then was widely criticized for responding slowly and concealing the seriousness of the outbreak. In those halcyon days Facebook was still a year away from launching, Twitter (2006), Whatsapp (2009) and the Chinese state controlled Wechat arrived in 2011. In other words we were living even then in a different, scaled-down information environment without all of today’s social media implications and primary influences on all types of government and public servants.
The untimely dismissal of the Commanding Officer of the USS Theodore Roosevelt, the result of a COVID-19 related communication in reality “demonstrated exceptionally poor judgment” on the part of the Acting Secretary of the Navy. That sacking, together with his own swift resignation, highlighted yet again the pressures the media can exert on strategic
leadership in a crisis – pressuring them to act in haste without allowing the luxury to repent at leisure. That sacking also brought to light similar events in 1898 when Colonel Theodore Roosevelt, commanding the Second Cavalry Brigade in Cuba wrote to his commanding general:
“To keep us here will simply involve the destruction of thousands… Yellow-fever cases… in this division there have been 1,500 cases of malarial fever…. the whole command is so weakened and shattered as to be ripe for dying like rotten sheep, when a real yellow-fever epidemic instead of a fake epidemic, like the present one, strikes us… If there were any object in keeping us here, we would face yellow fever with as much indifference as we faced bullets. I write only because I cannot see our men, who have fought so bravely and who have endured extreme hardship and danger so uncomplainingly, go to destruction…8. Roosevelt, soon to be the 26th President of the United States, not convinced the corps commander would act on it in a timely fashion, allegedly handed a copy of it to the Associated Press correspondent covering Cuba. That correspondent cabled the letter to the Associated Press headquarters and it published nationwide the very same day.
The public outcry achieved Roosevelt’s aim and the troops returned home. How authorities react to protest and meet grim economic realities in the immediate post-pandemic world is likely to reflect the size and centralised control of their ground forces, rather than that of their navies. Among countries where democratic principles are less firmly embedded and the distribution of wealth already egregious, it is likely we will see more than one coup by ambitious military opportunists and in those where armies do the dirty work they are likely to be rewarded before their sister services. Thailand has experienced 12 military coups since the effects of the Great Depression provided the tipping point for the first in the 1932 Revolution. The navy played a small but useful role in the then Kingdom of Siam, a country which now conveniently has amnesty provisions for coup-makers firmly written into each constitution. 9
In the maritime domain military history may well reflect the security of the South China Sea was greatly influenced by the effects of the pandemic. In economic terms SARS was a gnat in comparison to COVID-19’s killer bee. It came along just a year after China joined the World Trade Organization. Its effect on Chinese growth saw its decline by two percent. In 2003 those service industries which closed to help contain the outbreak accounted for just over 40% of Chinese GDP. Today it is closer to 54%. South East Asia suffered from falling tourism and exports but back then China’s share of
global GDP was a mere 4% compared with 17% today. A Powerful Perspective. These are extraordinary times and navies have not been immune from the momentous upheavals witnessed in a relatively short period around the beginning of this century. The links between the DIME elements of national power are complex as is the task of determining
definitively the effect each has on the other, be it within a single nation or across a region or globally.10 Who in Western Australia before March 2020 would have known their toilet paper supplies originated only from Millicent in South Australia? The end of the Cold War and rise of global terrorism strained both diplomatic and political boundaries and relationships on an international and sometimes internal level to a
degree only hitherto witnessed during the First and Second World Wars. The importance of diplomatic/political influence on leaders of United Nations sponsored specialized organizations and agencies has again come into sharp focus. As COVID-19 spread across the globe and the World Health Organisation’s Director-General Tedros Adahanom came in for sustained criticism over perceived links and sympathies with China, the United States
withdrew its funding in mid-April.
The development and influence of the internet in an information defining age is probably still well short of its apogee. No doubt holograms of extended families will one day join us in sitting rooms and at the domestic dining table to replace the Zoom videos of the pandemic era. Meanwhile COVID-19 has enabled unforeseen domestic and international opportunities for cyber crime. The Australian Cyber Security Centre (ACSC) published
advice on how small businesses can better protect themselves from cyber attacks and disruptions during COVID-19, noting there had been a significant increase in COVID-19 themed malicious cyber activity across Australia. It would be naïve to think state cyber activities with malicious intent will be suspended for the duration. Many militaries which became comfortable during decades of Cold War posturing have since witnessed not only the conceptual ‘Revolution in Military Affairs’ but also upheaval across most accepted disciplines, with impacts being felt at all levels from the
strategic to the tactical. Demands for a Cold War dividend coincided with pressures for many navies to reflect perceived changes within society. There were demands for various sexual and gender equities, demographic recruitment stresses were exacerbated by the requirements of rapid technological advances. Land mines and nuclear depth bombs became passé while acceptance or rejection of ballistic missile defence principles grew to be essential criteria for membership within several alliances. The change-driven insecurity experienced by professional armed forces lasted almost twenty years and then… the GFC hit, providing a new focus on budgets rather than threats. In the 1990 ‘Options for Change’ post-Cold War restructure the Royal Navy had accepted a cut in the number of frigates and destroyers from 50 to 40, anticipating that was all that would be required. Today the accepted number is down from the 25 during the GFC to a mere 19 and operational costs come under regular pressure from a British Treasury struggling to pay for two carriers let alone aircraft to put on them. So even before the onset of the pandemic, many navies, especially in Europe, had experienced almost thirty years of salami slicing firstly as a ‘dividend’ of the Cold War’s end and secondly as an effect of the GFC
However, for many nations, with the exception of Japan and much of ASEAN, during the last decade of the twentieth century and much of the first decade of the new century, the economic element of national power seemed relatively free from the effects of global turmoil. For example, between 1990 and 2006 the GDP of the United States increased by about 3.6% each year.11 A resurgent Russia defied the economic impact of the GFC to achieve a 25.7% defence budget increase in 2009, and by 2013 was the third highest defence spender globally. Although it was still hit in the mid-teens by the fall in the rouble, even today it planned to expend 3.9-4% of GDP. 12
The influence of the COVID-19 pandemic in different countries and blocs will be dependent on issues such as the nature of their markets, government controls, assets and capital; while population size, immigration, ethnicity, religion and human rights may all inform how different societies react to the hard times ahead. The direct effect of COVID-19 for most will be that GDPs will fall, economies contract. After the GFC came a wide range of solutions to address defence funding shortfalls. It is inevitable that for some nations strategy will again be aligned to new economic capacities; combat formations and and/or manpower will be targeted; new equipment orders will be delayed, cancelled or reduced in capability. The issue for Defence Departments in many nations will be that
savings measures that were available after the GFC were employed to their perceived full extent a decade ago. To a lesser degree, after economic realities, how navies may fare will include factors such as a nation’s information infrastructure and bureaucracy, the relationships between national bodies, available tools and technology and relationships.
Money and Principles
‘The sinews of war are infinite money’
13
Ralph Waldo Emerson once observed that “a man is usually more careful of his money than he is of his principles.” A state cannot afford to be so imprudent if it is to achieve grand objectives at a strategic level and remain able to exercise the military element of power through the broad but essential precepts of the Principles of War.14 The Principles, a century
in development following Clausewitz’s early 19th Century observations, 15 became fully recognisable a hundred years later in the British Field Service Regulations. Each principle has intrinsic merit but in respect to strategy they cannot stand alone and must instead be intertwined for strength: the steel, hidden and ready, inside the velvet glove of diplomacy.
Given the nature of federal and Westminster systems of government, policies are dependent on the whim of party political expediency. Regrettably, navies are easy targets when savings are required. While it is simple to effect economies in the short term, for example allowing oil prices to dictate ships’ programs, short term policy decisions may well have long term impacts and it is much less simple to turn around national strategy. Modern naval equipment and systems are years in development and often produced at substantial cost and significant political risk, for example Australia’s own Collins Class submarine and its successor, which before COVID-19 was planned to double the number of RAN submarines.
In 2009, when introducing the Force 2030 Defence White Paper it was the then Australian government’s stated intention to have a formal, quinquennial Defence White Paper process which would maintain strategy at the centre of a risk based approach to defending the nation.16 Presciently, a focus of the 2009 White Paper was the ‘rise of China’.
Maritime nations depend on their ability to conduct and protect trade, if necessary supported by naval operations. To be successful these must have the freedom to judiciously apply the Principles of War. Of the ten Principles of War recognised by the RAN, it is arguable none are immune to the effects of this pandemic. Selection and Maintenance of the Aim is the foundation for all the other Principles. In democracies, governments seek regular
re-election and do not have the power of a totalitarian regime to compel its people to make sacrifices for long periods in hard times. This causes inevitable tensions when considering strategy and military employment. In the introduction to Australia’s 2009 White Paper, the Australian Defence Minister stated: “The 2009 White Paper was developed in the midst of a global recession. The Government has demonstrated the premium it puts on our national security by not allowing the financial impact of the global recession on its Budget to affect its commitment to our Defence needs.”17
However, almost immediately in the Executive Summary came: “The global economic crisis is the most fundamental economic challenge facing this
Government. At times such as these, the Government must be fiscally responsible. It would be reckless to commit substantial new resources to Defence while uncertainty surrounding the crisis remains.”18
These statements appeared to contain contradictions which resulted directly from the GFC and against which subsequent decisions which affected the balance between force structure, capability investment and defence infrastructure were made. It was not the first time in Australian naval history that economic turmoil affected strategy, that was surely in
the 1890s when for the Queensland Maritime Defence Force “the depression ruled out any further thoughts of expansion and greatly curtailed operations”. 19
So how will the pandemic affect the RAN? The 2013 Gillard White Paper
acknowledged the ongoing impact of the GFC: “The United States is reducing projected defence spending of at least US$487 billion over the next decade, albeit against a very large base budget. In 2010, the United Kingdom announced a 7.5 per cent cut in real terms over four years.”20 At home it recognised that “as the Defence budget is a significant component of
Government expenditure, national security objectives need to be considered in light of the constrained fiscal environment.” 21
When considering the Selection and Maintenance of the Aim and the pandemic in strategic terms, it is useful to note Australia’s first Strategic Defence Interest described in the 2016 White Paper: a ‘secure, resilient Australia’. We still have reason to be optimistic following the first phase of the pandemic: “an Australia resilient to unexpected shocks, whether natural or man-made, and strong enough to recover quickly when the unexpected
happens.” Co-operation between services and allies depends on the ability to communicate effectively and provide mutual support. This will require consistent investment in goodwill as well as equipment if satisfactory levels of co-operation are to be maintained following COVID-19. A good example was in the GFC occurred during the Royal Australian Navy’s Northern Trident deployment, when RAN vessels foiled an act of piracy off the Horn of Africa.
“The relative ease with which Sydney and Ballarat could coordinate with CMF Headquarters and other coalition ships in the area was largely because the RAN routinely operates in those waters and with allies. There are RAN officers working within CMF Headquarters and foreign naval officers are on exchange with the RAN, all of which builds trust, teamwork and understanding.”….Fortunately, Ballarat had been fitted with a secure, web based communications capability which was required for her subsequent work in the United Kingdom. This system allowed relatively easy and secure communications with both CMF Headquarters and associated ships.”22
Since then, over the last decade, successive Australian governments have come to see China as a ‘key partner’ and invested appropriately in increased and targeted Defence International Engagement across the region. Continued investment and returns on those relationships will
be critical now as we seek to help maintain regional stability by keeping communications and military contacts open when the embattled relationship between two great powers may now come into even sharper focus in the next four and a half years as a result of the COVID-19 blame game. Of course, the principle of Offensive Action cannot be contemplated without fully trained and properly equipped assets. Without the smaller equipment purchases and rapid acquisition programs that may well be early targets for economic savings in the likely extensive recovery phase after COVID-19, it will be difficult for naval forces to take or regain the initiative. The 2016 White Paper was developed in tandem with an
Integrated Investment Program and it would be surprising if there are now not pressures on the latter’s aspirations. Similarly, Sustainment is a particularly vulnerable principle given the costs associated with modern technology and the fact that most navies rely on imported equipment. The Argentinean requirement for more Exocet missiles during the Falklands War is an excellent case in point. The 2016 Defence Industry Policy Statement aimed at treating Australian industry as a fundamental input to capability. In terms of local employment and economic recovery this is just one area the government will have to balance among many competing interests for access to what is sure to be a newly limited economic rice bowl. Many navies have mimicked commercial sector practices and their logistic chains now more closely reflect the JEJIT principal. Unfortunately, wars and operations do not fall neatly into the category of commerce and a sustained economic crisis cannot fail to impact on the provision of effective sustainment. Equally, without adequate force levels there can be no effective Concentration of Force. Over the last decade the RAN has recovered its amphibious and aviation capabilities from their previous parlous state and successfully introduced a new generation of Air
Warfare Destroyers into service. From the embarrassment of an inability to provide support during bushfires just a decade ago the navy has gained plaudits for its support to coastal communities in the 2019-2020 bushfires. The ability to raise and deploy Maritime Task Groups for exercises such as Indo-Pacific Endeavour and operate both LHDs in Exercise Talisman Sabre 2019 is an expensive but essential aid to maintain the ability to uphold this
principle and operate successfully in Joint and Combined environments.
The principle of Security, which allows commanders to operate with minimal interference from their opposite numbers, is crucial in an information age. Developing network-centric capabilities has been a focus for modern armed forces in recent years but replacing and protecting systems is dependent on regular, structured investment. The pace of
technological change shows no signs of slowing down and those who are unable to keep up economically, including meeting the costs of recruiting and retaining specialised personnel, will be left behind. The recent focus on developing Information Warfare in Australia will remain essential for national security. “Desert Storm forces, involving more than 500,000 troops, were supported with 100 megabits per second (Mbps) of bandwidth. OIF forces, with about 350,000 war fighters, had more than 3,000 Mbps of satellite bandwidth, which is 30 times more bandwidth for a force 45 percent smaller” 23
The ability to effect Surprise and defend against it will be directly impacted by negative economic measures. However, all is not bad news here, because the requirement for economic stringency can bring change for the good.
“The British defence industry is already moving in directions which narrow the gap between long-term procurement and urgent operational requirements, providing the capacity to adapt equipment in theatre and showing the flexibility to produce solutions tailored to particular problems in short order.” 24
The question now is how deep will/should the pandemic effect cuts be and for how long will we see its effects? The Flexibility to adapt plans will be influenced by any reduction in force numbers and equipment. Ironically, the pandemic may ensure that Economy of Effort in allocating and applying naval power is enforced on commanders, a principle which may then limit rather than support the exercise of the military element of national power.
The Human Factor “Isn’t the morale of a Service a thousandfold more important than its material?”25
Morale, the last of the Principles of War, has already been subject to rapid stresses in a market and consumer driven economy in which the pandemic has affected every citizen and of course our dependents. Economic influence is very important for sustaining an effective
naval force, particularly those formed by volunteers. Even without the existence of economic strain, there has been a dichotomy in post Cold War Western navies between the ostensibly constant pressure for transformation and the average sailor’s natural antipathy to change.
During the GFC, CN Australia stated: “The most important factor … are the
personnel challenges that confront me”.26 During the COVID-19 crisis today’s CN has made the RAN’s people and their families his first priority. Morale depends on leaders and can be a brittle asset. Ultimately Captain Crozier had it right when he wrote from the USS Theodore Roosevelt: “We are not at war. Sailors do not need to die. If we do not act now, we are failing to properly take care of our most trusted asset – our sailors.” The effects of the pandemic on the staffs of large and small scale civilian enterprises are reported daily in the media. In the GFC, workers were presented with the closure of final salary pension schemes, pay freezes,
offers of unpaid leave, part time working schemes. British Airways staff were offered the suggestion that they should work for a month without pay. An immediate family member o the author was recently faced with the stark choice of a 10% pay cut or redundancy by a US-based employer. It appears lessons were learnt from that economic crisis but the expensiv measures nations have put in place today will have to be paid for. In April the ABC were quoting a cost of the Australian government’s ‘Jobkeeper’ package as $2.50 per week for taxpayers for the foreseeable future. In the United Kingdom the pandemic’s effects have been described as an ‘economic ice age’. The truth for most Western nations will probably lie
between the two. In an earlier crisis an enforced 10% cut in pay initiated what some today cannot imagine – a mutiny. Feeling the pressure of the Great Depression and determined to maintain the Gold Standard, a new National Government in the UK in 1931 agreed to cuts in public
spending. The ‘new rate’ of pay, introduced for new entrants to the Royal Navy in 1925 was thereby reduced by 10% but those who had joined before that date also had their pay reduced to the new rate, the net effect for them being a cut of 25%. It is ironic that in an age when the flow of information was relatively slow and the naval authorities were well able to stay ahead
of media reporting cycles, that the sailors first became aware of their pay cut by reading the newspapers. “For two days, the ships of the Atlantic Fleet were in a state of open mutiny… large numbers of men were massed on the forecastles of Hood, Rodney and Dorsetshire. Men the forecastle of Hood had refused to allow any work to be done to commence on unmooring,
and it became evident that neither Hood nor Rodney could go to sea.”27The British Cabinet met almost immediately and within days Britain had left the Gold Standard. Twenty three other nations followed. The events of 13 to 21 September 1931 provide an illuminating, and fortunately bloodless, example of the interdependent nature of the elements of national power in a Western society subject to an economic crisis. The February 2009 uprising by border guards in Bangladesh, while not a naval mutiny, highlighted the fragility of morale in some third world militaries when conditions of service and pay are undermined. “The border guards said their pay rates have failed to keep pace with the army’s even as rampant inflation has seen the cost of food in the poverty-stricken Islamic country rise by more than 30 per cent in the past three months.”28
Ironically, one of the benefits of an economic downturn is the concomitant increase inthe number of people wanting to join the Navy. Retention also benefits from the ‘recession-proof’ perception of Armed Forces employment,29 or ‘economic conscription’,30 as some prefer to term this effect. The cost individuals and their families bear do affect morale.
Naturally, morale will be affected by the other economic factors besides pay over which defence organisations have some control. In the author’s workplace swift actions by senior leaders to support navy families and the service members impacted by COVID-19 has been much appreciated.
Conditions of service and allowances may, in the longer term, be affected because of budget considerations but in the short term this is unlikely to be the case, if only because of bureaucratic reaction times. Morale may be more immediately injured by short term savings measures. Delaying investment in equipment which service personnel identify as essential
affects morale as well as capability. Keeping vessels alongside to save fuel affects training. Promotion cycles become vulnerable as fewer senior staff choose to leave the Service in an uncertain economic climate. This limited employment opportunity was once noted by the Chief of the Royal Australian Air Force when commenting on the Air Force Reserve.31
“In any given situation, military success may depend as much on morale as on material advantages.”32
Economic Insecurity
“It is upon the Navy under the Good Providence of God that the wealth, safety and strength of the Kingdom do chiefly depend.”33
Rather more than navies, commercial maritime interests have always been acutely aware of the inherent economic vulnerability of operating within a maritime environment. Contrast this with Defence White papers which posit that Australia’s most basic strategic interest remains the defence of Australia against direct armed attack.The effects of COVID-19 are already being felt in nations dependent on maritime trade. Previously the global influence of a relatively small number of unsophisticated third world pirates was disproportionate on insurance markets, fuel costs, naval operating costs, deployment and maintenance cycles. In contrast, by early April 2020 the maritime data analysts Alphaliner estimated COVID-19 had led to the idle containership fleet reaching three million TEUs. 34
“No market segment will be spared, with capacity cuts announced across
almost all key routes. Apart from the Asia – Europe, Asia – North America and Transatlantic routes, carriers have also implemented capacity reductions in South America, the Middle East, the Indian Subcontinent, Africa, and Oceania.”
The link between economic adversity and maritime crime is well documented while the vulnerability of key maritime trade choke points such as the Suez Canal, the Straits of Hormuz and Malacca to terrorist attack will continue to exercise naval strategists. Rapid changes of economic pressures such as oil prices, will continue to affect naval budgets and operations in a much more direct and immediate manner. How quickly funding for planned defence expenditure comes under pressure in Western societies will depend ultimately on political party strategic direction, following treasury assessments during the recovery phases of the pandemic. Defence expenditure in a country such as Iraq, dependent as it is on oil sales for 90% of its gross domestic product, may be hit much harder by the rapid decline in world oil prices than that of a nation whose prosperity flows from a broader economic base. Negative economic forecasts and new economic realities will force governments to re-assess strategic priorities, reconsider long and short term plans and subtly change the relationship between exercising diplomatic and military influence, the former being in principle much cheaper and more appreciated by the political elite than the latter. It is likely that should the economic crisis deepen, we may yet see dramatic naval upheavals downstream. Among these (especially if Trump fails to win re-election) could be the end of the United States Navy’s hegemony, a resurgence of Russia’s blue water fleet, the further development and more frequent of the Chinese fixed wing carrier force and Task Groups and a further decline in the navies of the European Union. The impacts of COVID-19 on navies in the future will continue to be influenced by the pervasive and complex influences of the national (and international) elements of power. After the GFC ‘The United States reduced its aspiration from being able to fight two major wars simultaneously to being capable of defeating a major act of aggression in one theater while denying the objectives of—imposing unacceptable costs on—an opportunistic aggressor in a second theater.’ 35 The US
35 David Chinn: https://www.mckinsey.com/industries/public-sector/our-insights/preserving-combat-power-when-defense-budgets-are-falling
political party strategic direction, following treasury assessments during the recovery phases of the pandemic. Defence expenditure in a country such as Iraq, dependent as it is on oil sales for 90% of its gross domestic product, may be hit much harder by the rapid decline in world oil prices than that of a nation whose prosperity flows from a broader economic base. Negative economic forecasts and new economic realities will force governments to re-assess strategic priorities, reconsider long and short term plans and subtly change the relationship between exercising
diplomatic and military influence, the former being in principle much cheaper and more appreciated by the political elite than the latter. It is likely that should the economic crisis deepen, we may yet see dramatic naval upheavals downstream. Among these (especially if Trump fails to win re-election) could be the end of the United States Navy’s hegemony, a resurgence of Russia’s blue water fleet, the further development and more frequent of the Chinese fixed wing carrier force and Task Groups and a further decline in the navies of the European Union. The impacts of COVID-19 on navies in the future will continue to be influenced by the pervasive and complex influences of the national (and international) elements of power. After the GFC ‘The United States reduced its aspiration from being able to fight two major wars simultaneously to being capable of
defeating a major act of aggression in one theater while denying the objectives of—imposing unacceptable costs on—an opportunistic aggressor in a second theater.’ 35 The US decision in 2012 to give up the capability to fight two major ground wars simultaneously was as a result of the GFC and the subsequent Quadrennial Defence Review in 2010. The Rise of China
The Soviet specialists in the Western intelligence community who despaired at the decline of the Russian Navy at the end of the Cold War were buoyed as its defence budget was, to a degree rejuvenated and then at last given a new focus as China emerged to develop a blue water fleet with a carrier capability. COVID-19, temporarily will ease the international focus off the PRC’s activities in and around the South China Sea. However, in a scenario of deep recession and a Biden government in the United States, it is China that will lead the recovery in the global economy. Its previous hegemonic regional ambitions will of course have remained extant and its ability to exercise its economic influence on its neighbours is unlikely to have declined in relative terms. China is apparently demonstrating a case of ‘first in, first out’ across the DIME elements of national power in regard to the pandemic’s effects. “Certain sectors are definitely booming…. it in fact may play into the hands of Chinain the medium term. It is well-known that China is ahead in the “race to 5G”, which is all about “digital” and “remote”. During this pandemic, China probably pulled furtherahead. Online teaching and conferencing have boomed. Delivery of goods rather than visiting shops has continued its transition to the mainstream. The economy has taken another step towards modernization.”36
Despite protests from Indonesian, Philippines, Vietnamese and US officials, the PLA-N and aggressive Chinese Coast Guard activities in the SCS have resumed. In early April they included ramming and sinking a Vietnamese fishing boat off the Paracel Islands. “It would appear that China, in addition to mishandling both the coronavirus outbreak in Wuhan and its rather crass public relations efforts on the pandemic, is demonstrating further strategic tone-deafness in its actions toward its neighbors. In doing so, China is likely to shoot itself in the foot: further accelerating efforts by
Beijing’s neighbors to partner with the United States and other Indo-Pacific
powers.”37
Commentators continue to miss the obvious conclusion – China will never be swayed by words and has calculated (particularly after COVID-19) there is insufficient political will for firm action to prevent their achievement of long term strategic objectives in ‘their’ region.
Conclusion
Written as ANZAC Day approaches, we should consider the extent of a pandemic on our RAN forebears who had unarguably suffered more difficult times. “Overall the RAN suffered 284 deaths between 4 August 1914 and 31 August 1921 (the Commonwealth War Graves Commission official period for commemoration) of which 35 can be directly linked to the Influenza Pandemic. Another 15 deaths were potentially exacerbated by the illness thus making one in every six members of the RAN who died during World War I a victim of the pandemic.”38 In that crisis as on many subsequent occasions, the RAN stood ready to assist our neighbours. Two weeks after the Armistice, HMAS Encounter was sailed with medical
personnel embarked to assist in Samoa, Fiji and Tonga. When we look back on the COVID-19 pandemic it will be important not to forget the hard lessons learnt. The most recent pandemics stemmed from China and they are not infrequent. H2N2 in 1956-58; H3N2 in 1968; H5N1 in 1997; SARS in 2002 and H7N9 in 2013.
Before COVID-19 many navies were recovering from the GFC. Some, like the RAN were in a good place – well equipped, sufficiently funded and with a vision for the future supported by political determination for equipment upgrades and great acquisition programs. When considering the effects of the GFC on the RAN, the first iteration of this paper in 2009 concluded: “looking toward the year 2030, the economic climate will probably
remain the single most important factor in whether the government’s emphasis on undersea, anti-submarine and surface maritime warfare in the defence of Australia will be achievable”. Wherever the COVID-19 driven economic crisis takes us, politicians must be made cognisant of reality; that there are fundamental links between the maintenance of defenc capabilities, the delivery of strategy and the Principles of War. If worse is yet to come in this decade, then naval personnel will do well to keep Lord Nelson’s words in mind: “I could not tread these perilous paths in safety, if I did not keep a saving sense of humour.”
1 Marx, Karl. ‘Money’, Early Texts by D McLellan. Basil Blackwell, Oxford, 1972. Page 181.
2 2016 Defence White Paper, page 40. 38 CMDR Greg Swinden RAN, The Navy and the 1918-19 Influenza Pandemic.
3 Admiral Sir Jonathan Band Royal Navy. ‘Ministers accused of ‘sea blindness’ by most senior Royal Navy
figure’. UK Daily Telegraph 14 August 2009.
4 https://www.aspistrategist.org.au/labor-commits-to-creation-of-australian-fuel-reserve/
5 DIME = Diplomatic/Political, Information, Military and Economic elements of National power to which are
sometimes added S (Societal) and T (Technological) to form the acronym DIMEST.
6 From the film Tora! Tora! Tora! While the Japanese Naval Marshal General Yamamoto may never have said
those words, the film’s producer, Elmo Williams, stated that Larry Forrester, the screenwriter, found a 1943
letter from Yamamoto to the Admiralty in Tokyo containing the quotation.
7 https://www.telegraph.co.uk/news/global-protests-2019/ Sir Adam Roberts, senior research fellow for politics
and international relations at the University of Oxford.
8 https://www.usni.org/magazines/proceedings/2020/april/uss-theodore-roosevelt-commanding-officer-followed-example-colonel
9 Eugénie Mérieau in the Atlantic, March 2019 “ How Thailand Became the World’s Last Military Dictatorship”
https://www.theatlantic.com/international/archive/2019/03/thailand-military-junta-election-king/585274/
10 Several organisations have considered a systems analysis approach to study subsets of national elements of power, for example the railway network within a national transportation system as a part of a nation’s economic infrastructure. However, across national elements of power a far more complicated ‘system of systems approach’ is required which if conducted comprehensively is an expensive and time consuming process for any intelligence agency.
11 United States Census Bureau, US Statistical Abstract 2008
12 Stockholm International Peace Research Institute 2019 fact sheet
13 Marcus Tullius Cicero. Heinl R.D. Jr. Dictionary of Naval and military Quotations (Annapolis, Naval
Institute Press, 1966) page 115.
14 Chapter 3, Australian Maritime Doctrine (RAN Doctrine 1 – 2000)
15 Carl von Clausewitz. ‘The most important principles of the art of war to complete my course of instruction for
his Royal Highness the Crown Prince.’ 1812.
16 2009 Government of Australia Defence White Paper ‘Defending Australia in the Asia Pacific Century: Force
2030’ Page 11.
17 Ibid. Page 9.
18 Ibid. Page 11.
19 Internet. http://en.wikipedia.org/wiki/Colonial_navies_of_Australia
20 2013 Australia Defence White Paper, page 9.
21 Ibid. Page 71
22 Semaphore Issue 10, August 2009.
23 Lt. Gen. Harry D. Raduege Jr USAF. ‘Net-Centric Warfare Is Changing the Battlefield Environment’.
‘Crosstalk’, The Journal of Defense Software Engineering, January 2004 issue.
24 Prof Hew Strachan, Oxford University. Survival Magazine, Volume Issue 4 August 2009, Pages 49-70.
25 Rudyard Kipling, A Book of Words: Selections from Speeches and Addresses Delivered between 1906 and
1927, MacMillan, London, 1928.
26 Vice Admiral Crane RAN, Chief of Navy Speech to Australian Strategic Policy Institute (ASPI) 5 Nov 08
27 Internet. http://www.timesonline.co.uk/tol/comment/columnists/william_rees_mogg/article5408194.ece
28 Internet. http://www.theaustralian.news.com.au/story/0,25197,25113356-2703,00.html
29 Internet. http://www.telegraph.co.uk/news/newstopics/politics/defence/4838937/Recession-boost-for-Armed-
Forces-recruiting.html
30 Internet. http://www.wsws.org/articles/2009/jan2009/aumi-j26.shtml (World Socialist Web Site)
31 Air Marshal Binskin, Air Force News Vol 51, No 12, Jul 9 2009, Page 2
32 Chapter 3, Australian Maritime Doctrine (RAN Doctrine 1 – 2000)
27 Internet. http://www.timesonline.co.uk/tol/comment/columnists/william_rees_mogg/article5408194.ece
28 Internet. http://www.theaustralian.news.com.au/story/0,25197,25113356-2703,00.html
29 Internet. http://www.telegraph.co.uk/news/newstopics/politics/defence/4838937/Recession-boost-for-Armed-
Forces-recruiting.html
30 Internet. http://www.wsws.org/articles/2009/jan2009/aumi-j26.shtml (World Socialist Web Site)
31 Air Marshal Binskin, Air Force News Vol 51, No 12, Jul 9 2009, Page 2
32 Chapter 3, Australian Maritime Doctrine (RAN Doctrine 1 – 2000)
33 Section II, Royal Navy Articles of War. 1749
34 1 TEU is equivalent to a 20-foot-long intermodal container. https://www.seatrade-
maritime.com/containers/idle-containership-fleet-set-hit-3m-teu-alphaliner
35 David Chinn: https://www.mckinsey.com/industries/public-sector/our-insights/preserving-combat-power-
when-defense-budgets-are-falling
36 https://www.china-briefing.com/news/social-economic-impact-covid-19-china-recovery-potential/
37 https://thediplomat.com/2020/04/the-danger-of-chinas-maritime-aggression-amid-covid-19/