DEFENSE SECRETARY CARTER SAYS ASIA'S DEMOGRAPHICS INCREASING GLOBAL PROFILE

FROM:  U.S. DEFENSE DEPARTMENT
Carter: Demographics, Economics Boost Asia’s Global Profile
By Jim Garamone
DoD News, Defense Media Activity

WASHINGTON, April 3, 2015 – Demographic changes in Asia will make the region more important to the United States, Defense Secretary Ash Carter said at the State Department recently.

As Carter prepared to depart April 6 for his first trip to Asia as defense secretary, he reiterated that the United States is a Pacific power and will remain one, adding that this is in the best interests of Asian nations and of the United States.

Demographic trends show that Asian nations will only become more important globally in the 21st century, as Asian nations -- enjoying peace provided by American presence -- prosper and grow, Carter said. In the future, he added, no region will affect U.S. prosperity more, and it is in American interests to maintain a strong security presence in the region.

The math is inescapable, Carter said at the State Department.

“We know that 95 percent of the world’s customers live beyond our borders, and the spending power of middle-class consumers in today’s emerging markets is expected to increase by $20 trillion over the next decade,” he said.

Rising Middle-class Consumption

Just five years ago, the United States and Europe accounted for around 50 percent of global middle class consumption, and Asia accounted for about 20 percent, he said.

“Five years from now, the U.S. and European share of middle-class consumption will shrink to about 30 percent, while Asia’s will rise to 40 percent,” the secretary said. “And this trend will continue as Asia’s 570-million-strong middle class grows to about 2.7 billion consumers over the next 15 years.”

So, from an economic standpoint, Asia will become more important to American manufacturers, American jobs and American consumers. The central premise of America’s overall Asia-Pacific strategy is the recognition that, in the 21st century, no region holds more potential for growth, development and prosperity, Carter said.

Growing Populations

Roughly 7 billion people live in the world today. In 25 years, demographers estimate that number will grow to 9 billion, with much of the growth occurring in Asia, according to U.S. Census Bureau statistics and the CIA World Factbook.
China and India are the world’s two most populous countries and will remain so through 2050. Today, China has around 1.355 billion people, and India has around 1.236 billion. By 2050, officials expect India to be the most populous country in the world with 1.65 billion people, and China’s population will be 1.303 billion.

Economic progress in both countries has been building. Today, China has about 150 million people earning between $10 and $100 per day -- the amount economists calculate as putting a person in the global middle class. If the country continues its current growth, as many as 500 million Chinese could enter the global middle class over the next decade. This means that by 2030, 1 billion Chinese people could be in the economic middle class.

India’s middle class is much smaller -- about 50 million people. But economists expect India’s middle class to reach 200 million by 2020 and 475 million by 2030.

Both countries have systemic problems they need to overcome, and projections may fall short, officials said, but they added that the projections have the potential to prove accurate.

This growth is not limited to the two largest countries in Asia. Indonesia, Vietnam and the Philippines also are posed for an incredible growth in their middle classes.

Capable Militaries

From a security standpoint, Asia is home to some of the largest and strongest militaries on the globe. China, Russia, North Korea, India and Pakistan have large and capable militaries. With the exception of North Korea, the U.S. military is working to improve relations with each. American military leaders also are working with traditional allies such as South Korea, Japan, Australia, the Philippines and New Zealand to strengthen multilateral cooperation in the region.
Other nations -- Vietnam, Indonesia, Singapore, Malaysia, Thailand and Burma -- also are working to preserve stability in the region.

Snapshot of Military Powers

Here’s a snapshot of the various military powers in the region:

-- China spends at least 2 percent of its gross domestic product on defense and has the world’s largest armed forces, with 2.333 million active duty forces and 2.3 million reserves. Its stated defense budget is $145 billion. China has about 3,000 aircraft in its armed forces, has bought an aircraft carrier from Russia, and is building one of its own. The Chinese have more than 9,000 tanks and almost 5,000 armored fighting vehicles and are modernizing across all services.

-- South Korea spends 2.88 percent of its GDP on defense. The republic has 624,465 people on active duty and almost 3 million in the reserves. South Korea has 1,412 total aircraft and a naval strength of 166 ships. The South Korean military is extremely capable and has a defense budget of $33.1 billion.

-- Japan spends about 1 percent of its GDP on defense. There are 247,173 personnel in the Japanese Self-Defense Force, with about 58,000 active reserve personnel. The Japanese military has 678 tanks, 2,850 armored fighting vehicles, 1,613 aircraft and 131 ships. The defense budget is $41.6 billion.

-- India spends 2.43 percent of its GDP on defense. The nation has 1.325 million people under arms, with 2.1 million more in reserve status. India’s military has about 2,000 aircraft, two aircraft carriers, 202 ships, more than 6,400 tanks and 6,700 armored fighting vehicles. The Indian defense budget is $38 billion.

THE QUADRENNIAL DEFENSE REVIEW

FROM:  U.S. DEFENSE DEPARTMENT 

Right:  Robert F. Hale, the Defense Department's comptroller; Christine E. Wormuth, deputy undersecretary for strategy, plans and force development; and Air Force Lt. Gen. Mark F. Ramsay, Joint Staff director for force structure, resources and assessments, respond to questions from reporters about the department's fiscal year 2015 budget request at the Pentagon, March 4, 2014. Wormuth also discussed the 2014 Quadrennial Defense Review. DOD photo by Glenn Fawcett.  

Quadrennial Defense Review Charts Strategy Evolution
By Jim Garamone
American Forces Press Service

WASHINGTON, Mar. 4, 2014 – The 2014 version of the Quadrennial Defense Review takes the defense strategic guidance formulated in 2012 and evolves it through the future, a senior Pentagon official said.

Christine E. Wormuth, deputy undersecretary of defense for strategy, plans and force development, said the congressionally mandated QDR is an opportunity for Defense Secretary Chuck Hagel to lay out his vision and for the department, to refine defense strategy and to tell how the Defense Department will adapt the joint force to support it.

“This QDR is an evolution in the defense strategy process we’ve had,” said Wormuth, who has been nominated to be undersecretary of defense for policy. “Having come out of Iraq and beginning the process of transitioning in Afghanistan, this QDR looks to the future and talks about how the strategy needs to evolve and how the department needs to rebalance in an era of fiscal restraint.”
The review lays out a complex and rapidly evolving security environment that includes changes in technology, demographic trends and other factors. The review stresses the importance of the Asia-Pacific region to the United States while acknowledging there are still many “friction points” in the Middle East, Wormuth said. “Terrorism remains a continuing, evolving, metastasizing threat,” she added.
The three “three muscle movements” for the department are protecting the homeland, building security globally, and projecting power and winning decisively, Wormuth noted, and another piece of the strategy is an increased emphasis on innovation and adaptability, particularly in a fiscally constrained environment.

“The review will tick through things we are looking at in terms of new paradigms for forward presence: How can we get more bang for our buck from our forward-deployed forces, and how can we work more closely with allies and partners?” she said. “The innovation piece will also talk about the department protecting its seed corn in science and technology to maintain our technological edge.”
The review says that at the funding level in President Barack Obama’s budget request, DOD can execute this strategy. “There will be some increased risk in some areas,” Wormuth said. In the near term, she added, there is concern about readiness, and in the long term, there is “a lot of uncertainty in a security environment as dynamic as the one we face with a smaller force.”
The QDR will cover balancing the force holistically, and will discuss the rationale behind reducing the size of the Army and Marine Corps. It also will lay out things the department is doing to protect investments and will put forward initiatives in key capability areas that support the strategy, she said. These include cyber, space, precision strike and special operations forces.

Another important piece of the review is the discussion about reforming and rebalancing the department itself. The QDR discusses the 20-percent reduction in DOD staffs, why the department needs a new round of base realignment and closure, what acquisition reform can bring to DOD and why the department needs to slow the growth of manpower costs.

The review also looks at what the implications are for the department if there is no relief from sequestration, Wormuth said. “If we return to sequester-level cuts in fiscal 2016, we will see significantly higher levels of risk across the board,” she added. The Army will be forced to pare another 20,000 to 40,000 soldiers. The Marine Corps would drop to 175,000. The Air Force would have to eliminate other platforms, and the Navy would eliminate an aircraft carrier.

Sequestration cuts would make the bedrock DOD strategy of fighting and winning two nearly simultaneous wars unworkable, Wormuth said.

“A smaller force cannot be as present around the world,” she said. “We would have to be very selective in the engagement and partner-building activities we would take.”

Readiness challenges would grow under sequestration, Wormuth added, virtually guaranteeing a hollow force.

The current strategy is the right one for the country, she said. “The additional resources the president has asked for above sequestration, we think, is sufficient to get the job done,” she said.

(Follow Jim Garamone on Twitter: @GaramoneAFPS)