The Autonomous Revolution: How Australia Could Transform Defense Through Maritime Robotics

06/13/2025

By Robbin Laird

On May 28, 2025, Michael Shoebridge, Director of Strategic Analysis Australia, and I travelled to Melbourne, Australia to visit C2 Robotics which is described on its website as follows:

“C2 Robotics specialises in the rapid development of cutting edge robotics and autonomous systems for Defence applications across the maritime, land and air domains. As a 100% Australian owned and operated company based in Melbourne, we work closely with local partners and suppliers to advance the sovereign capability of our nation.”

Our visit was hosted by the Chief Techonology Officer  of C2 Robotics, Tom Loveard, and our colleague and friend Marcus Hellyer who is dual hatted as Head of Research at Strategic Analysis Australia and Strategic Advisor to C2 Robotics.

My own interest in going was to learn more about C2 Robotics Large Uncrewed Underwater Vessel (LUUV), the Speartooth. Last year I published a book on maritime autonomous systems and I just released my latest book on the subject entitled, A Paradigm Shift in Maritime Operations: Autonomous Systems and Their Impact.

The Speartooth is described on the C2 Robotics website as follows:

“Speartooth is a Large Uncrewed Underwater Vehicle (LUUV) designed for long range, long duration undersea operations. It brings a combination of highly advanced capabilities together with a modular, rapidly reconfigurable design specifically focused on manufacturing scalability and a revolutionary cost point that enables high volume production and deployment.”

There is much that can be said about the Speartooth about which we learned a great deal. But for me the most important question is how to understand what such capability represents. Usually, one sees a single photo of such a system and that completely misses the point – they operate as a network or a term I introduce into my latest book, a mesh fleet.

A Speartooth is not a submarine; it is a submersible platform which performs a task in concert with its mates. It can be deployed in terms which create a situation in which the adversary faces a large number of assets delivering a key effect and simply destroying some of these systems cannot shut down, say an ISR grid, if that is the payload which the Speartooth is deploying.

It is not so much to be understood to be attritable as it is about laying down a grid which remains operational even if some systems are lost and the overall capabilities are attenuated not eliminated. You lose a single submarine, and you can be out of business.

You lose a single Speartooth, and your capability is attenuated not eliminated. Moreover, by destroying a single Speartooth the adversary has revealed key information about themselves.

In a world where Ukrainian drones sink Russian warships and Houthi rebels challenge the U.S. Navy with asymmetric technologies, traditional defense thinking is rapidly becoming obsolete.

At the heart of this transformation is a fundamental shift in how we think about defense systems. Tom Loveard, CTO of C2 Robotics, explains that his company isn’t really building maritime platforms — they’re creating AI software capabilities that happen to manifest in products like their Speartooth autonomous underwater vehicle.

“We didn’t start building Speartooth as a maritime platforms company,” Loveard explains. “We started developing Speartooth as an asymmetric, agile engineering company with a very high focus on autonomy.”

This distinction matters because it represents a move away from the traditional model of building fixed platforms toward creating adaptable core capabilities that can evolve with rapidly changing technology.

The implications are profound. Whereas traditional defense systems lock militaries into specific configurations for decades, these new autonomous systems are designed for continuous adaptation. If a breakthrough in quantum navigation emerges tomorrow, it can be integrated into existing platforms within weeks rather than waiting for the next major upgrade cycle.

This technological shift comes at a crucial moment for Australian strategy. As Marcus Hellyer noted, there’s been a fundamental change in defense thinking: “If you’re an ADF that’s thinking about deploying to fight land wars against insurgents in the Middle East, there’s not a lot of space for autonomous systems. But if you are thinking about defending Australia against a major power adversary, you now have conceptual space for these systems.”

The numbers tell the story starkly. Even Australia’s most capable forces run into limitations quickly. Operating fighter aircraft with tankers and long-range missiles might reach 1,500-2,000 kilometers, but Australia has only seven tankers in service and 80 JASSM missiles on order. “That’s a couple of days usage,” Hellyer observes. “We just run out of scale, of mass, really quickly.”

This is where autonomous systems offer a different calculus. Instead of a few exquisite platforms costing billions, Australia could deploy a large number of autonomous vehicles that create persistent coverage of the northern approaches. It’s not about replacing submarines — it’s about creating a defensive network that complicates any adversary’s calculations about where and how to operate.

Perhaps most intriguingly, this approach could transform Australia’s defense industrial base. Unlike traditional defense manufacturing, which relies on specialized contractors and boutique production, C2 Robotics has designed Speartooth to leverage existing commercial supply chains.

“Much of the core manufacturing can be done by existing manufacturers that are already here today in Australia,” Loveard explains. “We’ve really chosen systems, technologies, and components that are highly available in commodity markets.” This means drawing on Australia’s automotive, oil and gas, mining, and agricultural sectors—industries that already exist and have scale.

The comparison to electric vehicles is revealing. “Speartooth actually has a lot of commonality” with modern electric cars, Loveard notes. “When you look at what’s in a current, modern-day car that you go and buy for anywhere from $20,000 to $100,000, the technology you get is actually very impressive.” The key difference is scale — those systems cost $50,000 per unit because they’re produced in huge volumes using broad industrial networks.

This manufacturing approach addresses what Loveard calls the “chicken and egg problem” in defense procurement. Traditionally, you start with expensive, exquisite platforms, which means the payloads and effects must also be expensive and highly specialized. Low numbers and high costs become self-reinforcing.

“Speartooth tries to break that chicken and egg problem by saying we want to provide essentially a marketplace for very low cost, high volume payloads and effects,” Loveard explains. By creating a delivery platform designed for mass production, it becomes economically viable to develop cheaper sensors and weapons systems.

The sustainment model is equally revolutionary. Unlike traditional platforms that operate continuously and require constant maintenance, autonomous systems operate more like munitions. “If you had 1,000 Speartooths, you’re not using all 1,000,” Hellyer notes. “Most of them are going to sit in a container. You just want to check them every now and then to make sure they’re ready to go.”

This technological shift also addresses Australia’s military recruitment challenges in unexpected ways. As Michael Shoebridge f observed, “If I was an 18-year-old kid coming out of high school, the last place I want to be is on a frigate or inside a tank, because all I’m doing is going on YouTube and seeing videos of Russian ships sinking, of tanks being destroyed by drones. I want to be a drone operator.”

The Australian Defense Force once recruited with the tagline “smart people, smart machines,” promising young people access to the world’s most exciting technology. But as Shoebridge points out, telling someone they might get a ride on a nuclear submarine in 20 years isn’t motivating. The two-to-four-year development cycles of autonomous systems offer something much more immediate and exciting.

Beyond immediate military capabilities, this approach offers Australia a path toward greater strategic independence. The conversation reveals deep concerns about Australia’s current trajectory which I characterized as too dependent on American defense while increasingly integrated into Chinese manufacturing supply chains.

I put it this way: Australia needs to “hug my American brother but build more independence for myself.” The autonomous systems approach accomplishes both goals —strengthening the alliance with the United States while reducing dependence on both American exquisite platforms and Chinese manufacturing.

The geopolitical context makes this urgent. As Hellyer noted, America’s military is smaller, more under-capitalized, and older than it’s been in decades. Even with increased defense spending, the structural problems won’t be easily resolved. Australia can’t assume American forces will always be available to fill capability gaps.

The ongoing conflict in Ukraine provides a real-time laboratory for these concepts. As Loveard observes, “The great revolutions from Ukraine have not just been technical revolutions. There have also been procurement revolutions and tactics and procedures revolutions.” The tight coupling between industry, procurement, and users has enabled rapid adaptation and innovation.

But the technology is spreading beyond major conflicts. “There was footage on the internet last week of rebels in Myanmar taking out a government helicopter with a quadcopter drone,” Hellyer notes. “If we somehow think that in the Indo-Pacific, we’re quarantined from what’s going on, we’re mistaken. Drug dealers and non-state actors are already adopting these technologies.

This democratization of advanced capabilities means Australia faces threats not just from major powers but from a range of smaller actors who can now access disruptive technologies. The Houthis’ impact on Red Sea shipping with relatively simple systems demonstrates how small actors can create strategic effects.

Our conversation underscored both the promise and the challenges of this transformation. The technology exists right now, the manufacturing pathways are clear, and the strategic logic is compelling. The main barriers are institutional and conceptual.

As Shoebridge suggests, the solution may not be to abandon existing programs like the Hunter frigates or AUKUS submarines, but to pursue parallel tracks. “Within the time frames that those programs are operating, you need this faster delivery,” he argues. The budgets required for mass autonomous systems are “pretty small by comparison to many of these other systems.”

The key is recognizing that the world has changed fundamentally. The comfortable assumptions of the post-Cold War era — American dominance, rules-based order, predictable threats — are breaking down. In this new environment, the ability to adapt quickly becomes more valuable than having the most exquisite platforms.

What emerges from this discussion is a vision of defense transformation that goes far beyond new weapons systems. It’s about creating an adaptive ecosystem that can evolve with changing technology and strategic circumstances.

This isn’t science fiction or distant future thinking — it’s happening now.

The autonomous revolution offers Australia a chance to achieve greater security, strategic independence, and industrial sovereignty simultaneously.

But it requires abandoning comfortable assumptions about how defense systems are developed, manufactured, and employed. In a world where the pace of change is accelerating, the biggest risk may be standing still.

Featured photo: The Speartooth as seen in a C2 Robotics video

But for me, such capability is best understood in kill web or mesh fleet terms, so I generated an AI image of the Speartooth “fleet” being launched for deployment to create an ISR grid.

On the Amazon U.S. site:

On the Amazon Australian site:

Project Flytrap

U.S. Soldiers assigned to 3rd Squadron, 2nd Cavalry Regiment utilize multiple counter-unmanned aerial systems during Project Flytrap at Joint Multinational Readiness Center, Hohenfels Training Area, Hohenfels, Germany, June 6, 2025.

Project Flytrap involves the application of new technologies alongside our NATO allies that test the capabilities of new, lower-cost and portable technology against adversary drone threats.

HOHENFELS, BAYERN, GERMANY

06.06.2025

The Critical Challenge of Achieving Cost Effectiveness in Multi-domain Military Operations

06/12/2025

The Sir Richard Williams Foundation seminar held on May 22, 2025, at the National Gallery of Australia in Canberra examined the critical challenge of achieving cost effectiveness in multi-domain military operations. The event addressed how Australia can “build and maintain military forces that are both affordable and effective in an era where traditional strategic assumptions no longer apply”

Key Strategic Context

The seminar was framed by several critical strategic realities:

Deteriorating Global Order: Air Chief Marshal (Retd) Mark Binskin emphasized that “the global rules-based order that we’ve relied on and benefited from for many decades is now gone” and is transitioning from rule of law to “rule of strength and rule of threat”

Immediate Threat Timeline: Rather than planning for 2040, the emphasis was on preparing for conflicts that could occur within the next five years, requiring a focus on enhancing current “fight tonight” capabilities.

Major Themes and Recommendations

  1. Ready Force vs. Future Force Gap

The report identifies a critical gap between Australia’s current operational capabilities and promised future systems. Key recommendations include:

  • Maximizing existing platform capabilities through focused upgrades
  • Developing autonomous systems as force multipliers rather than replacements
  • Building sustainable logistics and domestic weapons production
  1. Cost-Effectiveness Challenges

Several speakers highlighted concerning trends:

  • Budget Allocation Issues: Of Australia’s $50.3 billion defense spending increase, all but $1 billion goes to just two maritime programs (nuclear submarines and frigates)
  • Unsustainable Cost Trajectories: Examples like the $27 billion for three Hunter-class frigates demonstrate poor cost-effectiveness
  • Force Exchange Ratios: The Houthis forcing expensive U.S. missile expenditures illustrates asymmetric cost disadvantages
  1. Capability Priorities

Air Power Modernization:

  • $1.8 billion investment in advanced strike weapons (200 LRASM, 80 JASSM-ER missiles)
  • Focus on integrated air and missile defense
  • Enhanced aerial refueling capabilities

Non-Kinetic Capabilities:

  • Electronic warfare and counter-targeting systems
  • Information operations integration
  • Cyber and space domain protection
  1. Industry and Procurement Reform

The industry panel identified critical procurement issues:

  • Complex tender processes that discourage innovation
  • Need for earlier engagement between defense and industry
  • Streamlined evaluation processes
  • Emphasis on “good enough on time” rather than “perfect but late”
  1. Training and Personnel
  • RAAF has grown by 685 personnel (largest since 1998) with only 6.9% separation rate
  • Need for increased flight hours and realistic training scenarios
  • Cross-training for operational flexibility

Strategic Recommendations

The report concludes with several key principles:

  1. Integration Over Independence: Modern military effects require seamless coordination across domains
  2. People as Foundation: Technology amplifies but doesn’t replace skilled personnel
  3. Strategic Patience with Tactical Urgency: Maintain readiness while building future capabilities
  4. Alliance Integration: Deeper cooperation with allies

Critical Warnings

Multiple speakers emphasized that:

  • Current capability development timelines may be too slow for the strategic environment
  • Australia faces potential “swamping” by adversaries who understand cost-effectiveness better
  • The luxury of gradual capability transitions may no longer exist
  • Success depends on making hard choices about priorities while there’s still time

The seminar ultimately framed cost-effectiveness not just as a budgetary concern, but as a fundamental requirement for credible deterrence and national security in an increasingly contested strategic environment.

The Maritime Revolution: How Autonomous Vessels Are Reshaping Naval Strategy

By Robbin Laird

The era of autonomous maritime operations has quietly arrived, moving beyond experimental trials to become operational reality.

A recent conversation with Robert Dane, CEO of OCIUS, underscores how autonomous vessels are fundamentally changing naval operations—and why traditional naval thinking must evolve to harness their potential.

OCIUS’s journey from startup to operational service provider illustrates the broader transformation occurring in maritime defense. The company currently operates 12 autonomous vessels continuously from Darwin, with deployments averaging 60 days and reaching as long as 107 days.

This isn’t experimental anymore — it’s sustained operational capability.

The operational tempo speaks for itself: OCIUS has maintained 24/7 operations since July 2024, supporting anti-submarine warfare demonstrations and providing persistent surveillance across vast ocean areas. Three additional vessels equipped with radar systems are planned for deployment, while international programs in Japan and the UK are following Australia’s lead.

This reminds of my experience with the Osprey as it gained acceptance in what was an uphill battle.

In a 2012 interview I conducted at Marine Corps air station New River with LtCol Brian McAvoy, the Commanding officer of VMM-264, he underscored the progress they were having this way:  “In 2006, it felt like we were a bar act. It was challenging to get there and we were seen as oddities. In 2012, we were flying a plane with years of combat experience. We no longer were a bar act, but war fighters flying and maintaining a key combat capability.”

Central to this transformation is what I have called a mesh fleet in my new book focused on the paradigm shift in paradigm operations—a distributed network of autonomous vessels working collaboratively rather than relying on expensive capital ships. This represents a fundamental departure from traditional naval thinking.

The goal is to get them to work together for whatever task you’ve got to deploy in terms of a payload. It’s task orientation we’re talking about. You’re putting a payload on your USV to do a specific task.

This approach offers several advantages over traditional naval operations:

  • Distributed Risk: Instead of risking a billion-dollar vessel with hundreds of crew members, naval forces can deploy multiple smaller autonomous assets. If one malfunctions, the mission continues with the remaining fleet.
  • Personnel Efficiency: A mesh fleet requires only a handful of operators for monitoring and control, compared to the personnel required for traditional naval vessels.
  • Operational Flexibility: Autonomous vessels can be deployed for extended periods without the human factors that limit traditional operations—no crew fatigue, no need for food supplies, and no requirement for crew rotation.

Perhaps the most compelling argument for autonomous maritime systems lies in their economic impact. Traditional cost analyses fail to capture the true expense of manned operations.

Dane underscored: “If you look at an all-manned operation versus partial autonomous operations, the cost includes salary, medical, retirement—these factors add up to a significant bill to be paid by naval forces. When patrol boats cost significant amounts of dollars per day on station but operate limited schedules due to crew requirements, the true cost per operational day becomes substantially higher.”

Autonomous systems eliminate many of these hidden costs. There are no retirement benefits for a Blue Bottle vessel, no medical expenses, and no requirement for extensive shore-based support infrastructure. The maintenance burden shifts from large crews to small technical teams, and vessels can operate continuously rather than following traditional deployment cycles.

Despite operational success, autonomous maritime systems face institutional resistance rooted in traditional naval culture. The challenge extends beyond individual attitudes to procurement philosophy. Current Australian plans to develop large unmanned surface vessels armed with missiles misses the strategic advantage of distributed, flexible systems that can mask capabilities and confuse adversaries about fleet composition and intentions.

Maritime autonomous systems enable entirely new operational concepts. Traditional naval forces must choose between expensive, multi-mission platforms or accepting capability gaps. Autonomous systems offer a third option: task-specific deployment of distributed assets.

This shift requires new command structures and operational thinking.

The information warfare implications are particularly significant. Admiral Paparo’s concept of information warfare as “the first battle” aligns perfectly with autonomous systems’ persistent surveillance capabilities. These platforms excel at providing continuous intelligence, surveillance, and reconnaissance without the human factors that limit traditional operations.

OCIUS’s flexible business model addresses another challenge: how naval forces can adopt autonomous systems without developing entirely new maintenance and operational capabilities. The company offers everything from complete end-to-end operations to mission-area handover, allowing navies to focus on their core competencies while leveraging commercial expertise for platform management.

The global nature of autonomous maritime development creates both opportunities and challenges. Japan’s keen interest in Australia’s autonomous operations reflects similar strategic challenges, while UK programs demonstrate parallel development paths.

The company’s evolution from experimental developer to operational service provider represents a template for the broader industry.

Autonomous maritime systems succeed not by replacing traditional naval capabilities but by enabling new operational concepts that were previously impossible or prohibitively expensive.

The question isn’t whether autonomous systems will transform naval operations — that transformation is already underway. The question is whether naval institutions will adapt quickly enough to harness their potential, or whether they’ll be constrained by capital ship thinking in an era that demands distributed, flexible operations.

For naval forces facing personnel shortages, budget constraints, and expanding operational requirements, autonomous systems offer a path forward. But realizing their potential requires more than technological adoption—it demands fundamental rethinking of naval strategy, operations, and economics.

The maritime revolution has begun. The challenge now is ensuring that institutional adaptation keeps pace with technological capability.

The photos in the slide show below were provided by OCIUS.

On the Amazon U.S. site:

On the Amazon Australian site:

The U.S. Navy and the “Hybrid Fleet” Implications for Industry

06/11/2025

By George Galdorisi

The U. S. Navy stands at the precipice of a new era of technology advancement. In an address at a military-industry conference, the then-U.S. Chief of Naval Operations, Admiral Michael Gilday, revealed the Navy’s goal to grow to 500 ships, to include 350 crewed ships and 150 uncrewed maritime vessels. This plan has been dubbed the “hybrid fleet.” More recently, this sea change for the “Navy-After-Next” was embodied in the Navy’s Navigation Plan for America’s Warfighting Navy.

The reason for this commitment to uncrewed maritime vessels is clear. During the height of the Reagan Defense Buildup in the mid-1980s, the U.S. Navy evolved a strategy to build a “600-ship Navy.” That effort resulted in a total number of Navy ships that reached 594 in 1987. That number has declined steadily during the past three-and-one-half decades, and today the Navy has less than half the number of commissioned ships than it had then. However, the rapid growth of the technologies that make uncrewed surface vessels (USVs) increasingly capable and affordable has provided the Navy with a potential way to put more hulls in the water.

Juxtaposed against this aspiration is the fact that the U.S. Congress has been reluctant to authorize the Navy’s planned investment of billions of dollars in USVs until the Service can come up with a concept of operations (CONOPS) for using them. Congress has a point. The Navy has announced plans to procure large numbers of uncrewed systems—especially large and medium uncrewed surface vessels—but a CONOPS, one in even the most basic form, has not yet emerged.

That said, the Navy has taken several actions to define what uncrewed maritime vessels will do and thus accelerate its journey to have uncrewed platforms populate the fleet. These include publishing an UNCREWED Campaign Framework; standing up an Uncrewed Task Force; establishing Surface Development Squadron One in San Diego and Uncrewed Surface Vessel Division One in Port Hueneme, California; and conducting many exercises, experiments and demonstrations where Navy operators have had the opportunity to evaluate uncrewed maritime vessels.

These initiatives will serve the Navy well in evolving a convincing CONOPS to describe how these innovative platforms can be leveraged. Fleshing out how this is to be done will require that the Navy describe how these platforms will get to the operating area where they are needed, as well as what missions they will perform once they arrive.

An evolving concept of operations is to marry various size uncrewed surface, subsurface and aerial uncrewed vehicles to perform missions that the U.S. Navy has—and will continue to have—as the Navy-After-Next evolves. The Navy can use a large uncrewed surface vessel (LUSV) as a “truck” to move smaller USVs, UUVs and UAVs into the battle space to perform several important Navy missions such as intelligence, surveillance and reconnaissance (ISR) and mine-countermeasures (MCM). Further, the Navy does not have to wait for a lengthy acquisition process to field capable USVs. Rather, it can use commercial-off-the-self (COTS) USVs and field them soon.

How would this CONOPS for a hybrid fleet evolve? Consider the case of an Expeditionary Strike Group comprised of several amphibious ships underway in the Western Pacific. This Strike Group includes three LUSVs. Depending on the size that is ultimately procured, the LUSV can carry several medium USVs (MUSVs) and deliver them to a point near the area of operations.

These vessels can be sent independently to perform the ISR mission, or alternatively, can launch one or more smaller USVs to perform this mission. Building on work conducted by the Navy laboratory community and sponsored by the Office of Naval Research, MUSVs will have the ability to launch uncrewed aerial vehicles to conduct overhead ISR.

For the MCM mission, the LUSV can deliver several MUSVs equipped with mine-hunting and mine-clearing systems (all of which are COTS platforms such as the MCM-USV, T38 Devil Ray, Shadow Fox and others tested extensively in Navy exercises). Indeed, the T38 Devil Ray has performed this mission in Pacific Fleet-sponsored exercises. These vessels can then undertake the “dull, dirty and dangerous” work previously conducted by Sailors who had to operate in the minefield.

While the full details of how this CONOPS plays out is beyond the scope of this article, this innovative approach accomplishes an important goal. If the U.S. Navy wants to keep its multi-billion-dollar capital ships out of harm’s way, it will need to surge uncrewed maritime vessels into the contested battlespace while its crewed ships stay out of range of adversary anti-access/area denial systems, sensors and weapons.

To be clear, this is not a platform-specific solution, but rather a concept. When fleet operators see a capability with different size uncrewed COTS platforms in the water working together and successfully performing these missions, they will likely press industry to produce even more-capable platforms to perform these missions and thereby accelerating the fielding of a hybrid fleet.

This U.S. Navy hybrid fleet initiative has significant implications for the industry. The uncrewed systems industry is investing in increasing capacity to produce various sized USVs for military missions. This will drive down the unit cost of these vessels which will, in turn, make them more affordable for civilian uses such as remote ocean monitoring, oceanographic surveys and sensing, protecting offshore infrastructure and a host of other missions currently conducted by crewed vessels.

This article was first published in Ocean News and Technology and is reposted with the author’s permission.

Featured image was generated by an AI program.

The generated image portrays a futuristic Navy operation. It features a large uncrewed surface vessel (LUSV) acting as a mobile base, surrounded by smaller uncrewed surface, subsurface, and aerial vehicles. These vehicles are engaged in intelligence, surveillance, reconnaissance (ISR), and mine-countermeasures (MCM) missions. The setting is an oceanic environment, highlighting advanced technology and the use of commercial-off-the-shelf (COTS) vehicles for rapid deployment.

HMH-461 Air Assault Training with the King Stallion

06/10/2025

U.S. Marines with Marine Heavy Helicopter Squadron (HMH) 461, Marine Aircraft Group 29, 2nd Marine Aircraft Wing, and 2nd Battalion, 7th Marine Regiment, 1st Marine Division, fly in a CH-53K King Stallion during the air assault portion of Marine Air-Ground Task Force Distributed Maneuver Exercise 1-25 at Marine Corps Air-Ground Combat Center, Twentynine Palms, California, Feb. 11, 2025.

MDMX prepares Marines for future conflicts by combining constructed virtual training with offensive and defensive live-fire and maneuver training scenarios.

Service Level Training Exercise 1-25 is designed to enhance readiness across core Mission Essential Tasks and prepares the MAGTF to execute distributed operations across vast, diverse environments by emphasizing decentralized command and control.

TWENTYNINE PALMS, CALIFORNIA,

02.11.2025

Video by Sgt. Makayla Elizalde 

Marine Corps Air Ground Combat Center

How Brazil’s Multi-Currency Bond Strategy Inadvertently Supports the Russia-China Alliance

President Luiz Inácio Lula da Silva’s return to power has marked a significant shift in Brazil’s international positioning, but beneath the surface of diplomatic pragmatism lies a web of contradictions that reveal the complex realities of contemporary geopolitics.

Brazil’s ambitious multi-currency bond strategy, designed to diversify away from dollar dependence, has become entangled with broader efforts to undermine Western sanctions on Russia and strengthen China’s global financial influence — creating an uncomfortable paradox for a nation that officially opposes territorial aggression.

The contradiction is stark: while Brazil publicly condemns Russia’s territorial occupation of Ukraine and positions itself as a neutral mediator, its financial and diplomatic choices increasingly align with systems that enable Russian war capabilities and expand Chinese influence.

Brazil’s pursuit of “strategic autonomy” has evolved into something more troubling — a form of active non-alignment that effectively supports the aggressor in Europe’s largest conflict since World War II.

The Financial Architecture of Contradiction

Brazil’s multi-currency bond strategy, as outlined in recent Financial Times reporting, represents far more than a simple financing diversification.

The plan to issue Brazil’s first sovereign panda bonds in China while re-entering European capital markets after a decade-long absence reflects a calculated effort to reduce dependence on dollar-dominated financial systems.

However, this strategy has become inseparable from broader dedollarization efforts that directly benefit Russia’s war economy.

The financial arithmetic appears compelling on its surface. Renminbi-denominated bonds could potentially offer borrowing costs as low as 2% for 10-year debt, compared to Brazil’s recent dollar issuances at yields of 5.68% for five-year bonds and 6.73% for 10-year debt.

Yet this apparent savings masks a deeper geopolitical calculation that extends far beyond Brazil’s immediate financing needs.

China’s eagerness to provide these favorable terms stems from its broader strategy to establish alternative financial systems that can circumvent Western sanctions.

As U.S. intelligence officials have noted, “China has helped shift the battlefield momentum in Russia’s favor in Ukraine by providing it with components and other material needed to sustain its defense industry”².

Brazil’s participation in Chinese financial markets strengthens these very systems that enable Russian military resilience.

The BRICS Infrastructure: Building Russia’s Financial Lifeline

Brazil’s commitment to BRICS extends far beyond symbolic solidarity.

The bloc has been actively developing what Russian Finance Minister Anton Siluanov describes as “various financial innovations on the BRICS floor, including the cross-border payment system that can be based, further to bilateral settlements, on national currencies with consideration of digital technologies and digital financial assets.”

This BRICS Pay system represents a direct challenge to the SWIFT financial messaging system that has been central to Western sanctions enforcement.

As recent analysis indicates, “the weaponization of the dollar by the U.S. and its Western allies has accelerated the development of BRICS-Pay. The system facilitates trade in national currencies, cutting the dollar out of the loop.”

The implications for Russia are immediate and substantial.

Major banks have established what officials call a “China Track” netting payment system that “manages trade transactions and avoids exposure to Western monitors and possible secondary sanctions.”

This infrastructure allows Russia to maintain crucial economic relationships despite comprehensive Western sanctions, with Brazil’s participation lending legitimacy and scale to these alternative systems.

Lula’s Moscow Diplomacy: Pragmatism or Enablement?

Lula’s recent visit to Moscow for Victory Day celebrations reveals the complexity of Brazil’s positioning.

During his May 2025 meetings with Vladimir Putin, Lula emphasized that “Brazil’s position is against the territorial occupation of another country” while simultaneously expressing willingness to “help with negotiations—as long as both countries involved are open to our participation.”

This carefully calibrated language reflects “active non-alignment” — a policy framework that positions Brazil as a mediator while systematically undermining the isolation that Western sanctions are designed to achieve.

However, this balancing act has real consequences for the conflict’s trajectory.

While Brazil was “the only member of the BRICS grouping to support a Feb. 23 United Nations Assembly resolution calling on Russia to pull its troops out of Ukraine,” it did so only after introducing amendments advocating for a total ceasefire — effectively creating diplomatic cover for Russian positions.

China’s Material Support: The Financial-Military Nexus

The connection between financial systems and military capabilities becomes clear when examining China’s support for Russia’s war effort.

China’s  material support operates alongside financial mechanisms that Brazil helps legitimize through its participation in Chinese-led institutions.

The New Development Bank, established by BRICS nations, explicitly commits to “using local currency finance rather than solely relying on the US dollar.”

While presented as a development finance initiative, this infrastructure creates the foundation for broader sanctions circumvention.

The scale of this financial relationship is staggering.

China’s total trade with Russia reached a record $190 billion in 2022, providing crucial economic support that enables continued military operations.

Brazil’s participation in systems that facilitate this trade — through BRICS mechanisms and Chinese financial markets — makes it an indirect but significant enabler of Russian war capabilities.

The Dedollarization Strategy: Beyond Economic Policy

Brazil’s embrace of dedollarization extends far beyond traditional economic policy into the realm of geopolitical transformation.

As BRICS develops what officials describe as “an alternative to SWIFT,” the initiative represents “a cross-border payment system that would provide an alternative to SWIFT and minimize reliance on the dollar.”

The strategic implications are profound.  More immediately relevant to the Ukraine conflict, these systems provide Russia with crucial financial infrastructure that reduces the effectiveness of Western sanctions.

BRICS expansion has accelerated these trends, with the bloc now including Egypt, Ethiopia, Iran, the United Arab Emirates, and as of 2025, Indonesia.

Partner countries including Algeria, Belarus, Bolivia, Cuba, Kazakhstan, Malaysia, Nigeria, Thailand, Turkey, Uganda, Vietnam, and Uzbekistan further expand the network.

This growing coalition creates what Chinese Foreign Minister Wang Yi describes as “an equal dialogue between representatives of the Global Majority and the West in the financial and economic sphere.”

The Ukrainian Perspective: Recognizing the Threat

Ukrainian officials have begun to recognize the threat posed by seemingly neutral financial initiatives.

In April 2025, President Volodymyr Zelensky “summoned the PRC ambassador in Kyiv after Chinese nationals were captured fighting in eastern Ukraine” and stated that “over 150 Chinese nationals were fighting on Russia’s side in Ukraine.”

Zelensky subsequently stated that “the PRC was supplying Russia with gunpowder and artillery.”

This direct military involvement occurs alongside financial support that Brazil’s policies inadvertently strengthen.

As Zelensky has noted, “without the Chinese market for the Russian Federation, Russia would be feeling complete economic isolation.”

Brazil’s participation in Chinese financial systems helps prevent this isolation from becoming reality.

The interconnection between financial and military support becomes clear when examining recent sanctions.

In December 2024, “the EU included sanctions against several Chinese and Hong Kong entities for supporting Russia’s military,” and in February 2025, “the EU added 25 Chinese and Hong Kong entities to a blacklist for circumventing sanctions on Russia, including a drone factory in Xinjiang.”

The Fiscal Contradiction: Domestic Crisis, International Ambition

Brazil’s pursuit of alternative financing occurs against a backdrop of deteriorating domestic fiscal metrics that complicate its international positioning.

The country’s nominal public deficit has widened to 7.8% of GDP under Lula’s administration, while gross government debt has reached 76% of GDP — among the highest in emerging markets.

Goldman Sachs’ chief Latin America economist warns that Brazil needs to “adjust the budget deficit by three percentage points of GDP to make finances sustainable,” describing the administration as constantly “thinking about new ways to spend money.”

This fiscal pressure creates incentives for Brazil to embrace any financing source that offers favorable terms, regardless of broader geopolitical implications.

The contradiction becomes apparent when considering currency hedging costs. While renminbi bonds appear cheaper, “effective rates potentially reaching nearly 14% when hedged back into Brazilian reais” would actually exceed Brazil’s current domestic borrowing costs.

This suggests that the appeal of Chinese financing stems from strategic rather than purely economic considerations.

Historical Precedents and Continuity

Brazil’s current positioning reflects deeper historical patterns that transcend partisan politics.

As some analysts note, “Moscow has long been a low-intensity all-weather friend to Brasília, offering a relationship free of the complexities and criticisms that have shaped Brazil’s ties to the West.”

This relationship has provided consistent benefits across different administrations.

“Brazilian center-right and far-right presidents have also used the Brazil-Russia relationship to their benefit,” with even Jair Bolsonaro depending on “the BRICS as a diplomatic life raft” when isolated from Western powers.

The continuity suggests structural rather than ideological drivers behind Brazil’s positioning.

The pattern extends to BRICS institutions more broadly.

During Dilma Rousseff’s presidency, “the government refused to bow to Western pressure to disinvite Russian President Vladimir Putin to a BRICS summit in Brazil after he invaded the Crimean Peninsula” in 2014.

This historical precedent established Brazil’s reluctance to allow geopolitical considerations to override BRICS solidarity.

The Multipolar Vision: Strategic Autonomy or Moral Neutrality?

Brazil’s leadership frames its approach through the lens of “benign multipolarity” and “cooperative multipolarity” — concepts that “regard the emergence of multipolarity not as a threat, but as an opportunity.”

This vision sees Russia as a legitimate pole in a multipolar system, regardless of its conduct in Ukraine. During his Moscow visit, Lula emphasized that “Brazil is advocating for the strengthening of multilateralism” and criticized those “wanting to return to protectionist theories.”

However, this multilateral approach effectively legitimizes Russian participation in global governance despite ongoing territorial aggression.

Economic Interdependence and Strategic Dependence

Brazil’s relationships with both China and Russia involve significant economic dependencies that constrain policy options. China represents Brazil’s largest trading partner, and the panda bond initiative emerged from Lula’s state visit to Beijing.

These dependencies operate within a broader framework of South-South cooperation that Brazil’s leadership sees as essential for development.

The challenge lies in distinguishing between legitimate economic partnership and enablement of territorial aggression through financial systems that circumvent international sanctions.

The European Dimension: Diplomatic Contradictions

Brazil’s simultaneous pursuit of European financial market re-entry reveals additional contradictions in its strategy. The European Union has explicitly linked “expanded bilateral trade” to offering Brazil bond market access, creating incentives for sanctions compliance that Brazil’s BRICS commitments undermine.

European officials have grown increasingly concerned about the contradictions in Brazil’s positioning. German Foreign Minister Annalena Baerbock noted that “increasing Chinese support for Russia’s war against Ukraine has an impact on our relations” and affects “core German and European security interests.” Similar concerns apply to Brazil’s indirect support through Chinese financial systems.

However, Brazil’s broader geopolitical positioning may prove more problematic than its fiscal metrics for European investors increasingly concerned about exposure to sanctions circumvention.

Brazil’s participation in Chinese-led financial systems places it within a broader pattern of indirect support for Russian war capabilities.

Policy Implications and Future Trajectories

While Brazil may not directly supply military equipment, its financial choices strengthen the very systems that enable Chinese support for Russian military production.

Brazil’s leaders may genuinely believe they are pursuing legitimate economic interests while maintaining diplomatic neutrality.

However, the cumulative effect of their choices — participating in Chinese financial systems, legitimizing Russian international participation, and developing sanctions-circumventing payment mechanisms — creates material support for ongoing territorial aggression.

The challenge for international policymakers lies in recognizing how seemingly neutral economic choices can become entangled with security threats.

Brazil’s multi-currency bond strategy may appear to be straightforward financial diversification, but its broader context reveals how economic policy has become inseparable from geopolitical positioning in an era of major power competition.

Featured image generated by an AI program.