Publication: Business Day Issued: Date: 2013-05-27 Reporter: Helmoed Romer Heitman

Military spending need not be ruinous to the economy

 

Publication 

Business Day

Date 2013-05-27
Reporter

Helmoed Römer Heitman

Web Link www.bday.co.za


Picture: Sowetan


THE old Latin saying has it that "he who wants peace prepares for war", and somewhat more recently, then German chancellor Konrad Adenauer defended the decision to re-establish that country’s armed forces by remarking that "every country has an army on its soil; either its own, or someone else’s". Some argue that South Africa should not waste funds on defence "because there is no threat" at present. But:

• It takes two or three decades to build a defence force; threats can develop within a few years and sometimes even within a few months. There is no guarantee of fair warning. Buying a fire-extinguisher after your house has started burning will not to help.

• South Africa finds itself in an unstable region during an unstable era of world history. It would be foolish to expect "peace in our time" in our region, let alone on our continent, as the past two decades have quite clearly shown.

Accepting that South Africa needs a defence force, the issue becomes one of deciding what defence capability South Africa should have.

There is talk of the percentage of gross domestic product (GDP) that can or should be spend on defence. In reality, that is irrelevant except as a measure of how serious countries in similar strategic situations are about defence. The reality is that a country should spend on defence whatever its strategic situation demands in any given period.

The key decision required from the government is, thus, what it actually wants the defence force to be able to do: Does it just want a border guard and a small contingency force? Does it want a defence force able to act effectively in concert with the other Southern African Development Community (Sadc) forces? Does it want to be able to act as a regional or even continental power?

Once that has been decided, the defence force must develop and cost a suitable force design and present it to the government for funding. If that is not affordable, the government must reconsider its policies. What South Africa cannot do is go on as it is: expecting the defence force to provide regional capability on what amounts to little more than border-guard funding.

If we are unlucky, that lesson will be driven home by a large number of body bags coming back from some mission to which we sent a force too small and too lightly armed and which we could not reinforce or extract because we did not have the airlift to do so. That could easily have been the outcome at Bangui were it not for the outstanding quality of the soldiers who fought there; or at Goma in November last year, had M23 decided to attack the airport.

But should South Africa even have troops deployed outside our borders? Here it is perhaps apposite to quote former Tanzanian president Benjamin Mkapa: "If your neighbour is not stable, you cannot be stable for too long. If your neighbour collapses, the fallout will not respect the boundary between you."

South Africa needs stable and prosperous neighbours as customers and a stable environment around us to attract the foreign investment we need. If South Africa does not help bring about that stability, either no one will do anything or foreign powers will do so in their interests, not ours.

We also need to be able to protect vital interests outside South Africa, such as the shipping lane through the Mozambique Channel that carries most of our imported oil and to help our neighbours protect key national interests of ours that lie in their countries, such as the Katse Dam in Lesotho and the Cahora Bassa power station in Mozambique. The Sadc as such, for the same reasons, also needs a stable and preferably prosperous periphery. Against that background, it is clear that South Africa needs at least limited regional capability.

That is not affordable on the present R40bn budget: The army is overstretched and its equipment obsolete; the navy can patrol South African waters or the Mozambique Channel but not both, let alone important West African shipping routes; the air force has no maritime patrol aircraft and inadequate airlift capabilities.

If the defence force is to protect our borders, waters and airspace, protect our external vital interests and work with our partners to help stabilise the Sadc periphery, defence will need about R60bn a year.

True regional capability, which is what much of Africa expects of South Africa, given that we have the 27th-largest economy in the world and by far the largest in Africa, would cost about R75bn.

Much of that would be spent inside South Africa ­ salaries, general stores, and equipment that could then be developed locally ­ reducing the actual effect on the economy.

Alternatively, we must settle for an enhanced border guard, which could even allow some reduction in defence funding. But we must also understand that this would cost about 35,000 jobs cut from the defence force and from the industry it could no longer support; loss of that industry’s annual R8bn export income; and the currency outflows resulting from having to buy all equipment from overseas. And, of course, we would lose all influence in the region.

Here it is perhaps also worth quoting a former chief of the Angolan navy: "The politicians always talk about the cost of having a navy; they never consider the cost of not having a navy." That applies equally to the defence force.

It is worth considering the notion that defence funding is necessarily ruinous to the economy. It certainly is if, as the Soviet Union did towards the end, about 20% of GDP is spent on defence.

But the example beloved of several prolific correspondents is Costa Rica, which does not have a military, although its police does look suspiciously like a small army. The champions of the Costa Rica option always compare its economic performance with that of its neighbours. That is less than fair, given that those countries all faced insurgencies to some degree. Let us instead compare Costa Rica’s performance with that of another country that has not seen war or insurgency.

Singapore is a good example. Both are small countries in unstable regions and had economies of similar size in 1960. Costa Rica spends nothing on defence; Singapore has spent about 4% of GDP on defence for decades and invested heavily in developing a defence industry. So Costa Rica should have done vastly better than Singapore. The facts are rather different: in 1960, Costa Rica’s GDP was $507m and Singapore’s was $650m, while per-capita GDP was $380 and $395 respectively. By 2011, Costa Rica’s GDP was $40.6bn and Singapore’s was $133.2bn, while per-capita GDP had risen to $8,870 versus $50,285 respectively.

Clearly, defence spending does not have to be ruinous. A closer study of Singapore and other countries that have focused their defence expenditure wisely shows that it can serve as an incubator for engineers and technology, spreading capabilities through the wider economy, while many developing countries have found that combining military service with education and training is a cost-effective way of building skills.

Heitman is a defence analyst.

With acknowledgement to Helmoed Römer Heitman and Business Day.



chattabox         44 minutes after 11:40 CAT

I do not agree with your assessment. We are surrounded by very poor countries with little or no military capability and we couldn't possibly protect ourselves from invasion from western powers. The main requirement for our military at this point is to a) protect our borders b) retain institutional knowledge in the event we need to scale up in the future.

________________


rmyoung 
9 minutes after 11:40 CAT

I will support a R60 billion defence budget.

So long as we buy the right stuff and from the right suppliers and use it wisely.

Or maybe use it at all.

But the history is bad. In the SDPs (Arms Deal) it is clear that not only was the wrong stuff bought, but that the main reason for buying most of it was not military necessity or even utility.

The Gripens were surreptitiously reduced in number from 28 to 26 and then half of those put into storage because the SAAF has no budget to operate them.

The SAAF's 54 Cheetah Cs could still quite happily be flying about as most of these are currently doing in the Ecuadorian Air Force.

The SAN acquired four of the most modern frigates in the world under the guise of patrol corvettes. The latest of these is completely non-operational and will remain so until funds get allocated out of the half-life refit budget to remedy its essential defects.

Not long after delivery in 2007 the SAN's first submarine got critically damaged by a combination of lack of proper training, procedures and supervision and that boat has stood alongside or in the shed for six years. It is now receiving some attention from the original supplier, but it remains to be seen whether that will be sufficient to get it fully operational again or merely into the water.

But in general the SAN operates at most one frigate and one submarine at a time and that is not all the time, indeed not much of the time.

So in my view it is impossible to be justifying the acquisition on another submarine, another two to four frigates and another fourteen maritime helicopters that this force design calls for and R60 billion budget allows for.

The SA Army "lost out" in the SDPs. Actually in hindsight it was very lucky to do so, otherwise it would have 108 new main battle tanks (later reduced to 54).

Where would we use those?

How would we get them there?

Meanwhile the SA army's 35-year old Ratel infantry fighting vehicles have long since been retired. Yet instead of replacing these with a South African product, and South Africa is one of the best designers and manufacturers of mine-protected armoured vehicles in the world, we go and buy a Finnish product.

In May 2007, Denel Land Systems as prime contractor placed a contract for 264 Finnish Patria AMV vehicles, the Badger under Project Hoefyster, for the South African Army.

So far we have seen none of them.

It does not take 6 years to produce a final product of that type, particularly from an existing design..

But no wonder, the Department of Defence wants to play a direct role in the restructuring of the local defence industry. This was revealed by Defence and Military Veterans Minister Nosiviwe Mapisa-Nqakula in her departmental Budget Vote speech on Thursday last week.

BAE Systems are on record in 2010 suggesting the scrapping of the Badger acquisition and replacing it with its RG41 armoured combat vehicle. That this was three years after the award of contract is particularly noteworthy.

Clearly that the fat lady is yet to sing is an appropriate colloquialism in this instance.

Watch that space.

____________


rmyoung 
4 minutes after 11:40 CAT

@chattabox

I agree with your assessment - for reasons other than those I have set out in my subsequent posting.

But I have vested interests - because I am a South African defence supplier.

I hope eventually to get some of the action - supply action, not military action, that is.


One thing : Helmoed Heitman is infatigable.