For global arms companies looking to ply their wares in Southeast Asia, Singapore is a sought-after client. And American and German hardware suppliers are poised for windfall profits as the island nation moves to shore up its defenses.

Last month, the wealthy city-state passed its biggest ever defense budget worth US$16.7 billion, or around 30% of the government’s total planned expenditure for 2019, with rich earmarks for defense, security and related diplomacy.

Singapore allocates between 3% and 5% of its gross domestic product on defense, well above the global average, while most regional states spend closer to 1-2% or lower, according to Stockholm International Peace Research Institute data.

That spending is set to climb in the years ahead as the Singapore Armed Forces (SAF) moves to enhance its conventional capabilities through the procurement of more modern military hardware and equipment, including new generation fighter jets and submarines.

Defense Minister Ng Eng Hen recently told Parliament that defense spending over the next decade was expected to rise by 3% or 4% a year, mostly to strengthen and modernize the SAF’s aging hardware.

This month, Ng announced that Singapore would order four new F-35 fighter jets from US defense contractor Lockheed Martin and that it may purchase an additional eight of the advanced fighters after a technical evaluation.

F-35. Photo: US Marine Corps via Reuters
An F-35 fighter jet in flight. Photo: US Marine Corps via Reuters

Singapore’s Ministry of Defense (Mindef) identified the F-35, known for its advanced stealth capabilities, as the most suitable replacement for its aging fleet of 60 US-made F-16 jets, which first entered service in 1998 and will be considered obsolete by 2030.

Other contenders that lost out to the F-35 included the Eurofighter Typhoon, China’s J-20 stealth fighter and the Russian-made Sukhois. Singapore will become the third Asian nation after Japan and South Korea to buy the F-35 jets.

The Singapore Navy, which operates within the region’s crowded littoral waters, will also acquire new advanced submarines. Last month, Ng visited Germany to unveil a new state-of-the-art type-218SG submarine, known as the “Invincible” and developed by ThyssenKrupp Marine Systems (TKMS), a German builder of surface ships and submarines.

The 70-meter diesel-electric submarine, which has been constructed but is not yet operational, is the biggest ever built by TKMS, and will not be sold to any other country. Singapore will take delivery of a further three Invincible-class vessels from 2022.

The acquisition has put a spotlight on the city-state’s ongoing efforts to boost its undersea capabilities amid rising regional maritime security challenges and bubbling territorial disputes in the nearby South China Sea.

The Asia-Pacific region is witnessing the world’s fastest rate of submarine proliferation, with South Korea and Japan recently introducing next-generation submarines into their respective fleets.

The new 218SG submarine viewed by Singaporean naval soldiers at the ThyssenKrupp Marine Systems shipyard in Germany, February 2019. Photo: AFP Forum/Carsten Rehder

Singapore has joined the fray with what is believed to be the most sophisticated submarine in Southeast Asia custom-built for warmer Pacific waters.

Aside from operating underwater for one-and-a-half times longer than the navy’s current submarines, the Invincible-class will also have greater weapons-carrying capacity and an improved sonar to locate targets of interest. Singapore began operating submarines in the 1990s and has since acquired six modified second-hand vessels supplied by Sweden.

The procurements are in line with Singapore’s long-held security strategy of maintaining a cutting-edge deterrent force as a hedge against the vulnerability of its small size. Situated between more populous Malaysia and Indonesia, Singapore equates national defense with national survival and prosperity.

Local military experts argue that the recent modernizations advance Singapore’s forward defense posture and enable it to negotiate from a position of strength when faced with maritime and airspace disputes with neighboring Malaysia. Both sides have notably traded recriminations in recent months.

Ng has said the new purchases aim to keep up with modernization trends in the region and are not directed against any particular country. Though the city-state considers itself a neutral actor, analysts say its procurements will be perceived as a deliberate counterbalance to China’s rising influence over nearby strategic waterways.

Chinese sailors (left in white) visiting Singapore Navy’s frigate RSS Stalwart during an ASEAN-China Maritime Exercise at a military port in Zhanjiang, October 24, 2018. Photo: AFP/Stringer/China Out

Analysts believe Singapore’s pro-American security orientation and role in facilitating US military activities in the region have likely irked China’s leadership. The island nation plays host to American littoral warships and US Navy P-8 maritime patrol planes that conduct reconnaissance in the South China Sea.

“The SAF’s possession of significant American-made military technology and the accumulated institutional capacity of inter-military linkages and interoperability, would not be taken lightly by Beijing,” said Collin Koh Swee Lean, a research fellow specializing in Southeast Asian defense at Singapore’s Nanyang Technological University.

He told Asia Times that China likely believes that Singapore would “work in concert” with the US military in an armed conflict scenario in the South China Sea. The city-state has no territorial claims in the disputed waters and maintains that the disputes should be adjudicated through legal means.

Sébastien Roblin, an expert in security and conflict resolution, wrote in a recent article that Singapore’s new Invincible-class submarine’s surveillance capabilities and endurance advantages – it can remain submerged for four to six weeks before needing to surface – would add new factors to the contest for influence and control over the South China Sea.

“The Type 218’s advanced sensors and facilities will give Singapore significant intelligence-gathering capabilities, particularly for intercepting signals, deploying operatives, tracking the movements of Chinese diesel-electric submarines around the strait and building a ‘threat library’ on their acoustic signatures,” he wrote in reference to the nearby Strait of Malacca.

A quarter of the world’s traded goods, including as much as 80% of China’s fuel imports, pass through the congested Malacca waterway, offering the most direct route for commercial traffic between East Asia and the Indian Ocean. Analysts say the US Navy could readily block the strait in any conflict scenario by leveraging its strategic access to nearby Singapore.

Singapore Prime Minister Lee Hsien Loong (center-right), Deputy Prime Minister Teo Chee Hean (center) and Defense Minister Ng Eng Hen (third right) pose with navy personnel at Changi Naval Base, Singapore, May 5, 2017. Photo: AFP/Toh Ting Wei

As for the city-state’s efforts to modernize its air force, reports suggest Singapore is likely to acquire a short takeoff and vertical-landing variant of the F-35 known as the F-35B, which is capable of landing like a helicopter and is priced at US$115.5 million each. The F-35A conventional takeoff and landing model costs $89.2 million.

The sale must first be approved by the US Congress, though Ng has said Singapore has the endorsement of both the White House and the US Department of Defense.

Analysts believe the proliferation of the F-35 could set off action-reaction dynamics that drive China to enhance its air defense network to detect the stealth jet better.

The F-35 has garnered criticism over its steep cost and more than two-decade development history that was plagued by several technical problems. A US Department of Defense assessment this year described the performance of its F-35 fleet as “well below” a planned 80% reliability and maintenance benchmark.

The assessment also claimed the F-35B’s expected service life of 8,000 fleet hours “may be as low as 2,100″ hours, according to the Pentagon’s test office. Patrick Shanahan, acting US secretary of defense, acknowledged that the F-35 “has a lot of opportunity for more performance” while addressing reporters this year.

A Singapore Air Force F-16 fighter at Eielsen Air Force Base in the US state of Alaska during joint Red Flag exercises, June 12, 2018. Photo: Twitter

Should the F-35 meet Singapore’s operational requirements and satisfactorily adapt to equatorial weather, it is still unclear how many aircraft it would acquire to replace its aging F-16 fleet. “It’s difficult to envisage a clear-cut one-for-one replacement of future military equipment,” Koh said.

“The eventual purchase decision will depend on how well the Republic of Singapore Air Force evaluates this initial batch and taking into account the technological advancements and challenges that come with this program. Not least, of course, is also the fiscal ability to acquire and sustain a larger fleet,” he told Asia Times.

“It applies to not only air forces but navies as well. Each new incoming asset will become more capable, for sure, but is going to cost more than its predecessor. And militaries, not least the SAF, may have to continue to do more with less,” Koh said.