Strategic Assessment (Quarter 2, 2021)

Synopsis

The themes and conclusions presented in the Quarter 1 Strategic Assessment continue in the second quarter of 2021. COVID-19 continues to dominate the world, although heroic scientific and manufacturing efforts have seen vaccine production expand and grow. While vaccines offer a way out, it is still too early to return to a pre-COVID world. The Army must expect and plan to continue supporting domestic efforts, especially in accelerating vaccine rollouts, as well as supporting our regional partners with their own measures. Outbreaks will continue to flare up, of either known variants or new mutations, and we remain one of the few organisations with the flexibility, readiness and logistic depth to provide support.

On the positive side, the first half of 2021 has seen better economic growth than was expected at any point last year. This is excellent news for Australia, but does present a double-edged sword, as Army must grapple with competition in manufacturing and workforce areas. As Army’s acquisition budget grows within Defence and our average levels of technical requirement match pace, the pressures on recruiting and retention will continue to demand revision and innovation in our workforce management. Simultaneously, as our capability grows we will face pressures from overseas supply chains that are already wound tightly due to shortages of key materials and COVID-19 restrictions.

Overlayed on these challenges are increasing tensions within the strategic environment. The geostrategic order continues to fragment, with COVID-19 still another vector in increasing geopolitical and economic tensions. A significant part of the world’s national security apparatus is increasingly focusing on the Asia-Pacific, with recent United Kingdom and
European Union deployments to the region. As a significant actor within the Indo-Pacific, the Australian Defence Force (ADF) will need to remain prepared for an increased propensity to be committed to a range of domestic and international tasks.

Overall, while there has been a constant stream of newsworthy events this quarter, little which is fundamental has changed. COVID-19 continues to define the times, including now as another tool in a nation’s diplomatic toolbox. Global and domestic economic performance has improved, but this has left risks relating to escalating debt, inflation, supply chain security and geo-economics untouched. The strategic environment continues to morph with the interplay of powers in strategic competition. These challenges have implications for the Australian Army and its partners no matter what time horizon is being prepared for.