Madeleine Wackernagel Taking Stock
Funny how mere mention of the arms industry has the power to stop a conversation. It’s a classic case of guns versus butter (Economics One), and the divisions run deep. Should we be selling weapons at all? And who decides which country qualifies and on what criteria?
So it was with Denel’s proposed arms-for- oil deal with Saudi Arabia last year, and its recent sale of R100-million worth of surveillance equipment to Algeria. Neither country has a great human rights record, but we need the business.
Or do we? Since 1994, the defence budget has been slashed to R9,6-billion in the current financial year. The industry has shrunk from a total 150 000 jobs during its “heyday” (sic) in the late 1980s to 70 000 now. With the government no longer the main customer, companies such as Denel are desperately seeking alternative markets. But diversifying into civilian business, such as making cricket bats rather than rifles, is not always feasible, while converting to a civilian business is not always viable, as McDonnell Douglas discovered when it lost all its military custom.
So, South African companies are fighting for the export business and walking into a political minefield. The government is dragging its heels over the long-awaited White Paper on the future of the industry, and unsure of its policy priorities.
This week, the Cabinet was considering whether information on which country had bought what should be made public knowledge. Last time anyone raised the issue, Kader Asmal, chair of the National Conventional Arms Control Committee, defended the secrecy surrounding arms sales as a condition of “pursuing the best international relations with other countries”.
When the committee was established in 1995, in a bid to clean up the industry after decades of skulduggery under the previous regime, it was mandated to ensure weapons were sold only to countries that complied with strict conditions.
Since the end of the cold war, the arms industry has become more cut-throat – in the financial sense. South Africa’s share of what’s left is less than 0,5%. Even so, the country is ranked 10th on the arms charts. And Denel, for one, is aiming to double that share in the not-too-distant future; with R3-billion worth of export contracts in the pipeline, it may yet succeed. It is also putting its technological edge to civilian use, developing low-cost housing, for example.
But with so many countries chasing so few contracts, our industry is having a hard time keeping up in the hi-tech race. And that’s where the real controversy lies: government’s contribution to research and development has dropped by 80%, amounting to R250-million this financial year. With Denel contributing another R250-million, that’s pretty paltry in world terms.
Don’t get me wrong: I am certainly not advocating gargantuan investments in ship- building projects, for example, when other countries have the comparative advantage tied up, nor that we pour another R2- billion down the drain to develop the equivalent of that great white elephant, the Rooivalk. But with a proper programme, the best military brains and technology could be put to industrial use, and with it, broaden our industrial base.
At the same time, the military applications should be encouraged, within the correct moral framework. All it takes is a policy. Otherwise, we risk losing our best brains and an industry.