AUKUS brings more than nuclear submarines to Southeast Asia

The AUKUS agreement between the United States, the United Kingdom and Australia significantly shifts Australia’s defence strategy and future capabilities by providing the opportunity for Australia to acquire nuclear-powered submarines. But Australia will also receive advanced technologies under Pillar Two of the deal. This is one area in which Australia can leverage AUKUS to cement its defence relations with Southeast Asia.

Pillar Two focusses on developing advanced technologies in several areas, including artificial intelligence (AI), hypersonic missiles, undersea capabilities, cyberspace and electronic warfare.

Many of these technologies are just as crucial to Australia as the nuclear submarines, but it’s the acquisition of nuclear-powered submarines has received most of the public’s attention. The AUKUS leaders’ joint statement in March 2023 was issued at Naval Base Point Loma in San Diego, California with warships in the background. Even the joint statement by the three leaders focussed mainly on submarine-related issues.

Perhaps the focus on nuclear submarines is unavoidable. But the Albanese government and a number of security specialists have recognised the broader importance of Pillar Two. The Australian government’s 2023 Defence Strategic Review demonstrates this by calling for a senior official or officer to be appointed to focus on the implementation of this part of AUKUS.

The emphasis given to acquiring nuclear-powered submarines under AUKUS has caused friction between Australia and several Southeast Asian states, drawing concerns that AUKUS could trigger an arms race and ratchet up military tensions in Asia.

Underlining these concerns is the uncertainty expressed privately by several Southeast Asian defence officials as to whether nuclear-powered submarines will be a net contributor to Southeast Asian security or a source of instability that threatens their sovereignty. One key concern is that Australian nuclear-powered submarines may end up operating covertly within Southeast Asian states’ territorial waters.

Despite the initial scepticism, Southeast Asian officials have quietly accepted that AUKUS is here to stay, and some are looking at drawing benefits from its existence. This creates a convergence point between Australian and regional strategic interests.

This is where Pillar Two could play a part. Unlike the first pillar, which will take decades to come to fruition, the second is comparatively low-hanging fruit that can be developed rapidly. This was shown in the deployment of AI-enabled assets to detect and track military targets during a demonstration in the United Kingdom in April 2023.

Based on interviews and conversations with Southeast Asian defence officials, some regional states are interested in receiving assistance in undersea capabilities, cyberspace and electronic warfare — areas well within the scope of AUKUS’ Pillar Two.

These defence officials privately expressed their understanding that Australia will not be open to sharing the most advanced military technologies acquired. But they hope for assistance in developing minimum defensive capabilities, especially in the cyber and maritime domains.

The cyber domain represents one of the most promising for Pillar Two in Southeast Asia. Based on a Recorded Future report, Chinese state-sponsored entities are known to conduct espionage activities targeting critical institutions in Southeast Asia, including defence-related organisations in Malaysia, the Philippines and Thailand, and political offices in Vietnam and Indonesia.

Another area in which Australia could collaborate with Southeast Asian states, especially Indonesia, is in undersea capabilities. Indonesia is an archipelago connecting Australia with Asia through critical undersea cables traversing its waters. This includes the Australia–Singapore Cable (ASC), Australia’s most advanced, high-capacity and low-latency submarine fibre optic cable system stretching some 4600 kilometres from Singapore to Perth.

Indonesia does not have the capabilities to monitor and secure undersea infrastructure, such as the ASC, even though several officials privately expressed their suspicions that submarines from a certain foreign power have been secretly operating within the Indonesian archipelago. This situation indirectly threatens Australia, as hostile powers could target the ASC and other undersea cables and critical infrastructure. Thankfully, Pillar Two provides a mechanism through which Australia could assist Indonesia in developing its undersea monitoring capabilities.

But one key feature of the AUKUS agreement may limit Australia’s sharing of Pillar Two technologies with Southeast Asian states. Advanced technologies under AUKUS are developed trilaterally with the United Kingdom and the United States. They may not want to transfer or share advanced technologies with parties outside the AUKUS framework. Australia must convince its AUKUS partners that certain Pillar Two technologies can be shared safely with selected Southeast Asian states to improve their defence capabilities and indirectly contribute to Australia’s security.

Given its geographical proximity, Southeast Asia is crucial to Australia’s security and prosperity. Skilfully leveraging Pillar Two will enable Australia to attain strategic objectives in both defence and foreign affairs. Southeast Asian states would likely perceive Australia’s efforts to improve their defence capabilities as improving rather than destabilising their security environment, making Pillar One all the easier to accept.