Country survey XII: South Africa

This article examines the relationship between defence expenditure and economic performance in South Africa, both prior to and after that country's first fully democratic election in 1994. Prior to 1994 defence expenditure decisions were largely dominated by non‐economic factors; since then defence spending has declined in reaction to, inter alia, the need to address a number of socio‐economic inequities.

After 1975 in particular, military industrialisation in South Africa placed a disproportionately high burden on the country's industrial resources and natural economic and technical capabilities. However, although this suggests that the opportunity cost of domestic arms production has been fairly high, the country's poor economic and development performance since the mid‐1970s is a function of underlying structural deficiencies and institutional constraints rather than the consequence of inordinately high defence spending levels.     

Defence industry in Iran – between needs and real capabilities

ABSTRACT

The paper’s goal is to analyses the potential of the Iranian defence industry, including both research-and-development and production capabilities. It is argued that, despite official statements about the great power and sophistication of the Iranian defence industry, in reality its capabilities are very limited and cannot meet the operational needs of the Iranian armed forces. At the same time, it is argued that many official releases, which are abundantly available in the Iranian press and often unthinkingly repeated by the Western media, do not present the real and value of military products, but are rather a tool for deception and propaganda.     

Revisiting the Defense–Growth nexus in European countries

This study revisits the long run and dynamic causal linkages between defense spending and economic growth in 15 selected European countries for the period 1988–2010 by utilizing recent developments in non-stationary panel data analysis. To this end, the series properties of per capita defense spending, per capita real capita stocks, and per capita real GDP are investigated by the panel unit root tests with and without breaks that support evidence on unit root. The panel cointegration tests with and without breaks are also subsequently employed to investigate whether there exists a long-run equilibrium relationship between these three variables. Finally, our causality analysis from panel vector error-correction model suggests that there is a feedback relation between real capital stock and real GDP in both short and long run, a one-way Granger causality running from real GDP to defense spending in both short and long run, and defense spending only Granger causes real capital stock in the long run.     

Turkey’s strategic choice: buy or make weapons?

Turkey has been investing in its national defence industrial base since the 1980s. As with other developing countries, Turkey’s motivations for investing in national defence industries can be boiled down to the pursuit of defence autarky, economic benefits and international prestige. However, after 40 years of investment, Turkey is unable to reach the primary goals of defence industrialisation. We argue that three factors are important to understanding Turkey’s persistence in these primary goals. First, Turkey believes that there is an overall improvement in its defence industrial capabilities and the goal of autarky is still reachable. Second, increased defence exports support the belief that Turkish defence industries have become sustainable and the trend will continue in the future. The third reason, perhaps most important of all, has to do with the domestic political gains of defence industrialisation: the AKP uses defence industry and indigenous weapon systems for prestige and, therefore, garners broader support.     

AN ENDOGENOUS GROWTH MODEL OF CAPITAL AND ARMS ACCUMULATION

This paper attempts to examine the effect of an anticipated foreign military threat on the steady‐state growth rate and the transitional behavior of the economy. The modeling strategy follows the Sandler and Hartley (1995 Sandler, T. and Hartley, K. 1995. The Economics of Defense, Cambridge: Cambridge University Press.  [Google Scholar]) and Dunne et al. (2005 Dunne, J.P., Smith, R.P. and Willenbockel, D. 2005. Models of military expenditure and growth: a critical review. Defence and Peace Economics, 16: 449–461. [Taylor & Francis Online], [Web of Science ®] , [Google Scholar]) viewpoints to emphasize the role of national defense in affecting growth from the perspective of both the demand and the supply sides. We thus combine the public capital version of endogenous growth with a framework of competitive arms accumulation. It is found that the key factor determining the steady state and the transitional effects of a rise in the foreign military threat on the home weapon–capital ratio, the consumption–capital ratio, and the rate of economic growth, is the degree of relative risk aversion.     

Addressing the “headwinds” faced by the European arms industry

ABSTRACT

The European arms industry is challenged by several adverse “headwinds.” Fragmentation leads to costly duplications and, in conjunction with stagnating budgets and sharply increasing costs, prevents firms from exploiting economies of scale and learning. This is exacerbated by size differentials vis-a-vis the leading US arms manufacturers and competition from emerging producers. As some “headwinds” are self-enforcing, far-reaching industrial and policy responses are required to improve the industry's outlook. As exports may not indefinitely compensate for low domestic demand, there is an economic imperative for further cross-border collaboration and consolidation. Despite various EU policy initiatives, progresses regarding the European Defence Equipment Market and strengthening the European Defence Technological Industrial Base have been relatively slow. It remains to be seen whether the European Defence Fund will be the proclaimed “game-changer,” raising competitiveness of the European arms industry. At the same time, the UK's withdrawal from the EU adds uncertainties.     

The causal nexus between military spending and unemployment in the G7: a bootstrap panel causality test

We revisit the causal relationship between military spending and unemployment in the G7 countries applying a bootstrap panel causality analysis that accounts for both cross-sectional dependence and for heterogeneity across countries. Using per capita real GDP as a controlled variable, we found a unidirectional causality running from military spending to unemployment for Canada, Japan, and the US, one-way causality running from unemployment to military spending for France and Germany, and bidirectional causality for Italy and the UK. The empirical evidence does not seem to provide consistent results regarding the causal relationship between military spending and unemployment in G7 countries.     

The future of the defence firm in small and medium countries

The Western European defence industry used to be characterized by numerous constraints, especially in the small countries, subject to uneconomic defence production policies. It faces, since the end of the Cold War, a succession of new challenges such as budget restrictions, armament reductions and geopolitical upheavals. The EU is pushing in the direction of a cohesive foreign policy, including security and defence. Today, the emergence of a more consolidated European defence industry and the presence of oligopolistic European companies imply the definition of new roles for the EU and for its European Security and Defence Policy (ESDP). The solution is not protectionism, but more co‐operation to ensure effective defence production at a socially acceptable cost. In the framework of this co‐operation, defence companies in small and medium countries have a role to play as part of the supply chain to major weapon system integrators.     

海军舰载导弹防空系统信息作战方法

信息与火力是海军舰载导弹防空系统研究的核心问题,运用信息作战原理,在给定攻击战机的条件下,对舰载导弹防空系统的信息与火力联合作战能力的分析表明:与提高作战安全性的隐形战机相比,军事诱骗战术更易降低舰载导弹防空系统的火力防御能力.火力对作战能力的贡献约为信息的4倍.根据这一结论,可以为海军舰载导弹防空系统开发出基于信息作战原理的新战法,全面提高指战员在实战中把握信息与火力的运用规律、实施信息作战、做出科学决策和夺取战场胜利的能力.     

军民融合产业内涵及范畴

发展军民融合产业是各级政府落实军民融合发展国家战略的重要抓手之一。针对军民融合产业界定不清等问题,从理论研究和实践工作层面梳理既有观点及演变趋势,形成对军民融合产业的客观认识。在此基础上,剖析军民融合产业的属性特征,从指导实践工作角度出发提出三种界定军民融合产业范畴及相关统计工作的合理化思路,并提出建立两级联动工作机制、开展国家工业基础中国防科研生产能力普查工作、试点开展军民融合产业分类标准及指标体系建设工作、加强军民融合产业统计数据质量监测等政策建议。     

湖南国防科技工业军民融合深度发展研究

推动军民融合深度发展,是党的十八届三中全会提出的明确要求,也是当前和今后一段时期国防科技工业一项重大战略任务。作为传统的制造业大省和军工大省,湖南省推动军民融合已具备较好的\"产学研\"基础。为促进湖南国防科技工业军民融合深度发展,紧贴制造强省战略,分析了湖南国防科技工业军民融合深度发展面临的形势要求,阐述了湖南国防科技工业军民融合深度发展的重点领域,给出了推动湖南国防科技工业军民融合深度发展的有效途径。