INTERN INSIGHT: Andrew Kwon is a former AIIA NSW intern (Semester 2 2012) and completed a Masters of International Security at the University of Sydney in 2012. He is currently based at the Korea Economic Institute of America in Washington DC and has been observing the budget crisis since sequestration negotiations between Congress and the Obama administration in February 2013. The following is a short piece he has written on the issue and its potential effects on the US Rebalance to Asia. The views expressed in this article are Andrew’s.
It has been some weeks since the passing of a 6 month continuing resolution (CR). Though the bill provides only sufficient spending to avoid a government shutdown, life in Washington D.C. (and the USA at large) has returned to normal. However, with almost $85 billion in automatic cuts remaining in place, academics and practitioners in the capital continue to ponder the ramifications of this daunting political-economic conundrum. A key issue in the debate is the effects on major initiatives such as the rebalance to Asia.
What are the stated goals of the Asia Rebalance?
Based on various official documents such as the US 2012 Department of Defence (DOD) Strategic Guidance Paper, the rebalance has been interpreted as:
- An Asia-Pacific orientated US strategic policy framework which equalises defence, diplomacy and development;
- A continuing of established trends in key policy areas such as trade e.g. Trans-Pacific Partnership as an expansion of the George W. Bush Era Free Trade Agreement drive; and
- A heavy military reorientation e.g. Special emphasis placed on assessing the readiness of US Pacific Command (USPACOM) under Section 346 of the Fiscal Year (FY) 2012 National Defence Authorisation Act (NDAA) as well as the 2012 DOD Strategic Guidance Paper shortly thereafter.
What are the automatic and projected cuts in some relevant areas to the Asia-Pacific under sequestration?
Department of Defence:
- To meet sequestration obligations, the DOD budget must undertake an annual cut of 11% till 2021.
- The immediate impact on the DOD budget for FY2013 would be a hard sum reduction from the FY2012 level of approximately $650 billion to under $600 billion.
- Although no military personnel will be affected, civilian personnel face forced unpaid leave. Additionally, the pay increase freeze from FY2010 has been extended.
- Areas such as research and development into advanced capabilities could face approximately $33.5 billion over the next 5 year to meet sequestration obligations, the lowest since FY2002.
Department of State:
- According to White House Office of Management and Budget calculations based on Sequestration requirements and current CR provisions, State Department foreign operations will face a $2.7 billion or 3% reduction from FY2012.
- Of particular note is the reduction of approximately $317 million in Foreign Military Financing as well as approximately $400 million in US economic and development assistance.
- Unpaid leave notifications have not been implemented. However, a hiring freeze and reduction on capabilities investment has been enacted in key agencies such as USAID.
What has sequestration highlighted and what does it affect?
Sequestration has further highlighted and reinforced the difficulties that were confronting the US government over the Rebalance to Asia. A key difficulty was the inconsistency between formulation, composition and perceptions of the Rebalance.
The rebalance means different things to different states. An issue of particularly concern is the considerable confusion caused by how the rebalance is being explained in varying terms throughout the region. An example of this is the perceptions within the Republic of Korea that the rebalance is a reinforcement of the existing defence-centric US regional alliance framework. This perception is given shape by Republic of Korea hesitancy to participate in Trans-Pacific Partnership negotiations, the purported tip of the spear of the economic side of the rebalance. With sequestration, pressure from the region has grown to clarify the purpose of the rebalance. The resultant confusion not only feeds into uncertainty over US commitment to its allies but also suspicions held by key powers such as the People’s Republic of China.
Amidst this time of austerity, the DOD (more specifically USPACOM) feverishly pursues its goals of rebalancing as mandated by the president under the NDAA. Concurrently, various government departments are also pursuing the goals of rebalancing to Asia in their own way. A pressing question arising amidst the financial tightening; what does the Rebalance to Asia actually mean when it is perceived and interpreted so differently?
Andrew can be contacted at Andrew.YC.Kwon@gmail.com.