Towards a Brave New Arms Industry?

Richard Bitzinger

• Publisher: Routledge
• Year: 2014
• ISBN:
  9781136052880
• Edition: 1
• Topic: History
• Subtopic: Military & Maritime History
• Index: History

In the post-Cold War era, most countries have been forced to radically reduce their arms industries, and abandoned self-sufficiency in favour of a subordinate role in an increasingly globalized worldwide defence industry. This has significant implications for the future of armaments production, for proliferation, and for arms control.

Chapter 1
The Rise and Fall of Second-Tier Arms Producers

Countries have several reasons for developing and producing their own arms. Perhaps the strongest of these is the security-driven imperative for self-sufficiency, or autarky, in arms procurement.¹ In a basically anarchic international security system, nation-states are naturally impelled to seek an independent defence capability. These considerations were particularly strong during the Cold War, when several second-tier producers perceived themselves to be facing proximate threats. Sweden, for example, was a non-aligned and neutral country wedged between two mutually antagonistic military blocs. Apartheid-era South Africa perceived challenges to its rule from within and without, while Israel, South Korea and Taiwan continue to face proximate regional threats. In order to defend its territory satisfactorily, therefore, a nation-state requires a reliable source of armaments, and the most dependable source is generally a domestic one.

In addition, relying too heavily on arms imports makes a country vulnerable to having supplies cut off, or technology held back. Embargoes, sanctions and other types of supplier restraints —whether real or potential — have tended to reinforce the perception of many states that they must establish a secure, indigenous source of armaments. During the Cold War, many second-tier arms producers favoured self-sufficiency and hedged against arms-export bans. South Africa initiated indigenous production in direct response to UN-imposed arms embargoes in 1963 and 1977. As a result, by the late 1980s Pretoria could claim to be '95 percent self-reliant' in military procurement, including fighter aircraft, armoured vehicles and artillery, and surface combatants.²

Israel's growing frustration with foreign arms suppliers during the 1960s and 1970s — including France's ban on sales in 1967 and Britain's cut-off in 1969 — only increased Tel Aviv's interest in securing a reliable, domestic source of armaments. This, in turn, prompted a heavy build-up of the indigenous defence industry. By the late 1980s, Israel was capable of building its own fighter jets, tanks and air-to-air and anti-ship cruise missiles, and it was a world leader in unmanned aerial vehicles (UAVs).³

Taiwan's growing diplomatic isolation from the late 1970s, and its subsequent fears about being cut off from its principal overseas arms suppliers, was a prime motivation for establishing an indigenous arms-producing capability. In the early 1980s, after the US refused to sell it the F-20 Tigershark aircraft, Taiwan began developing its Indigenous Defensive Fighter (IDF). In addition, US unwillingness to export the Advanced Medium-Range Air-to-Air Missile (AMRAAM) and the Harpoon anti-ship cruise missile prompted Taipei to develop its own such systems.

South Korea initiated its defence-industrialisation programme in 1974, after the promulgation of the Nixon Doctrine, which both reduced US defence commitments to Asia and liberalised the export of advanced military technologies to allies such as South Korea. As a result, by 1995 nearly 80% of South Korea's arms were procured domestically, including aircraft, armoured vehicles, warships and submarines.⁴

Sweden established its arms industry in accordance with its longstanding policy of neutrality and non-alignment. An independent defence-industrial capability was seen as central to preserving a credible military deterrent, as well as reducing its exposure to outside suppliers and the possible cut-off of vital arms during a crisis or conflict (as happened during the Second World War).⁵ Consequently, by the late 1980s Sweden procured approximately 70% of its arms indigenously, including submarines, tanks, armoured vehicles, artillery, surface-to-air and anti-ship missiles and combat aircraft.⁶

China's unhappy experiences with foreign military-technical assistance — the abrupt cut-off of Soviet military aid in the early 1960s and the Western arms embargo following the 1989 Tiananmen Square massacre — reinforced Beijing's natural impulse to become self-reliant in arms production.⁷ By the early 1970s, therefore, the Chinese were developing indigenously designed weapon systems, and the country is now able to produce its own fighter aircraft, ballistic and anti-ship cruise missiles, tanks and submarines, among other weapon systems.

At the same time, a reduced reliance on foreign sources of arms was viewed as a means of strengthening national political independence. Dependencies on foreign supplies leave a buyer open to attempts by the supplier to withhold deliveries in order to coerce the purchaser into making concessions on national issues (such as human rights) or international issues (such as combating terrorism and drug trafficking or opposing a common regional threat). In Japan, for example, proponents of kokusanka (autonomy in arms production) perceived this industrial strategy as providing Tokyo with greater freedom of action in international affairs. At the same time, kokusanka arguably helped to strengthen Tokyo's security relationship with the US, permitting Japan to play a larger role in the bilateral alliance.⁸

In addition to fulfilling perceived requirements for self-sufficiency, arms production has often been seen as an important mechanism for driving a country's overall economic development and industrialisation. Defence industrialisation has potential backward linkages spurring the expansion and modernisation of other sectors of the national economy, such as steel, machine tools and shipbuilding.⁹ Industrialisation and technological advancement were seen as feeding into the development of domestic arms-manufacturing capabilities, building up general skills and know-how, and in providing lead-in support or equipment for arms production. The construction of warships, for example, stimulated the establishment of indigenous ship-building industries, while the production of military vehicles required steel mills and automotive factories to provide critical parts and components, such as armour plating, chassis and engine manufacture, and skilled labour for vehicle assembly. Both Brazil and South Korea pursued parallel strategies of 'security and development', building up their heavy industry and high-technology sectors at the same time as they strove for self-sufficiency in arms production.¹⁰

As a result, in many second-tier states, armaments production has become a critical component in the national economy. China's vast military-industrial complex, for example, provides jobs for more than three million workers, engineers and technicians. These are engaged in over 1,000 enterprises, each constituting multiple factories, research institutes, trading companies, technical schools and universities, along with housing units, schools, day-care centres, hospitals and recreational centres.¹¹ At its peak in the late 1980s, South Africa's arms industry employed nearly 132,000 workers, accounting for 9% of the country's manufacturing employment and 1.5% of its gross national product (GNP). Armscor, South Africa's preeminent defence conglomerate, was one of the country's largest industrial groups.¹² During the 1980s, over 20% of Israel's industrial workforce was engaged in arms manufacturing, and for a time Israeli Aircraft Industries (IAI) was the country's largest single employer.¹³ In Sweden, defence contracting employed one out of every ten workers in the machinery and metalworking industry, as well as 10% of the country's engineers.¹⁴ Particularly during the Cold War, Sweden's long-ruling Social Democrats saw the local defence industry as a 'necessary evil', essential to maintaining full employment.¹⁵

At the same time, armaments production was viewed as a 'technology locomotive' spurring the growth of new industries and technologies, particularly in aerospace, electronics and information technology.¹⁶ Military aerospace programmes, for example, constituted the basis for civil aircraft and aviation production in nearly all of the second-tier arms-producing states. For example, Brazil's Embraer (Empresa Brasileira da Aeronautica) — initially based on military-led industrialisation — subsequently expanded into the regional jet business. Sweden's Saab — originally a fighter-jet manufacturer — also branched out into the production of commuter planes in the 1980s, while Japan's aircraft companies have become major subcontractors to Boeing and Airbus commercial airliner programmes. Israel's high-technology sectors have also benefited greatly from cross-fertilisation with military industries,¹⁷ and South Korea has attempted to exploit military-to-commercial spin-offs in its communications, electronics, machine-tool and transport sectors.¹⁸

Second-tier states saw domestic arms production as providing other economic benefits as well. Defence industrialisation could function as an import-substitution strategy; instead of sending capital (especially government monies) out of the country via arms imports, countries can use indigenous arms production to create jobs, ameliorate trade imbalances and protect foreign-currency reserves. Furthermore, by exporting arms, defence firms constituted an important source of foreign-currency earnings. Brazil in particular pursued an aggressive export-led defence-industrialisation strategy, and by the late 1980s had emerged as the world's largest exporter of wheeled armoured vehicles, as well as being a major supplier of lightweight trainer planes and multiple rocket launchers to a number of armed forces in Latin America, Africa, the Middle East and even Western Europe.¹⁹ During the mid-1980s, Brazil was the sixth-largest arms exporter in the world.²⁰ The Swedish, Israeli, South African and Singaporean arms industries have also relied on overseas arms sales for a sizeable portion of their revenues. In fact, in the cases of South Africa and Israel, the local defence industry has been among the largest exporters of manufactured goods overall.²¹

Finally, nationalism, status and prestige also have an effect on defence industrialisation, particularly in the case of second-tier states that aspire to regional or even global great-power status.²² Possessing an independent defence-industrial capability feeds directly into concepts of national power — not only by creating military power but also by demonstrating the country's industrial and technological prowess, thereby confirming its status as a great power in the broadest sense. Consequently, many aspiring great powers — such as Japan during the nineteenth century and the Soviet Union during the twentieth — have often devoted considerable resources to building up indigenous arms production. Today, would-be great powers such as China, India, Iran and Russia have also invested large quantities of time, money and manpower in domestic defence industrialisation.

This 'rich nation/strong army' complex is not confined to aspiring great powers, and such technonationalism can be detected in several smaller second-tier arms-producers, such as Argentina, Brazil, Indonesia, Israel and South Korea. Brazil's military leadership embarked on an ambitious defence-industrialisation programme in the 1960s based in part on the belief that a powerful army was unsustainable in the absence of a strong domestic arms industry.²³ Indonesia established an aviation industry as an indicator of its intentions to become a modern industrialised nation and a power to be reckoned with in Southeast Asia. South Korea pursued an advanced arms-production capability not only to repel an attack from North Korea, but also to position itself as a 'full-fledged player upon the regional stage', with a view that this would be of particular use after any future reunification.²⁴

The ladder of production and the role of the state in second-tier defence industrialisation

When countries — especially second-tier arms producers — decide to begin indigenously manufacturing arms, they have tended to follow similar patterns of industrialisation and production. This process usually entails a series of gradual and progressive steps leading to greater sophistication and self-sufficiency in the design, development and manufacture of weapon systems. As such, it has often been described as the 'ladder of production', and while scholars may disagree as to how many steps there are or the precise ordering of the stages, the idea that countries engage in an evolutionary and incremental mode of defence industrialisation is broadly accepted (see Table 1 below).²⁵

Table 1 The ladder of production in second-tier defence industrialisation

According to the ladder of production, indigenous arms production is a process of transition from extremely high to very low levels of dependency on foreign sources of weapons and production technologies. Initial armaments production tends to rely heavily on imported technical assistance from countries possessing advanced defence industries. Most second-tier arms-producing countries start out by assembling weapon systems from imported parts and components (knock-down kits). The next step usually consists of the licensed production of forei...

Table of contents

• Cover
• Title
• Copyright
• Contents
• Introduction
• Chapter 1 The Rise and Fall of Second-Tier Arms Producers
• Chapter 2 Transition and Readjustment in Second-Tier Defence Industries: Five Case Studies
• Chapter 3 Towards a Brave New Arms Industry?
• Conclusion Implications and Challenges Ahead
• Notes