Into the black box? Technology sharing in major arms transfers and beyond

From the recipients’ perspective, arms transfers have, through the use of offsets, technology transfers, and industrial participation, become an opportunity to receive not only advanced weapons, but also technologies not otherwise available. How important are friendly relations for securing a military export order? To what extent do buyers demand advanced military or commercial technology and how are these demands accepted by the supplier? How does this influence smaller producers in relation to major producers? These questions are addressed by studying (a) the Joint Strike Fighter/F-35 by Lockheed Martin, USA, and the JAS-39 Gripen aircraft by Saab, Sweden, (b) the Medium Multi-Role Combat Aircraft competition in India for 126 combat aircraft, and (c) the Indian offset policy. In the final section, some long-term consequences are discussed.     

The Hungarian experience with Gripen fighter aircraft

The post-communist countries transition from the Warsaw Pact style of platforms and systems to Western-compatible capabilities has never been an easy task or a process without conflicts. This was no different for the Visegrád countries either, in which case the Hungarian Gripen procurement stands out. After much debate, Budapest decided to modernize its fighter fleet with the not battle tested Swedish-made Gripen fighter aircraft. This decision received several critiques due to the lack of transparency in the selection process and the initial lack of NATO-required systems. Subsequently, the fleet has had to operate in a financially demanding environment. Moreover, the air force has lost two aircrafts in accidents. Now that the jets are in the middle of their envisaged life cycle, it is more than appropriate to answer the question if the Gripens can utilize their full combat potential or will they fail the test of time?     

Success and failures of the Gripen offsets in the Visegrad Group countries

The Soviet-led Council for Mutual Economic Assistance member, Central European countries found themselves in a difficult political and economic situation after the collapse of the Soviet Union. Three post-Eastern Bloc countries formed the Visegrad Group to strengthen their ties to the West, but the need for foreign investment, job creation and technology transfer was urgent.

This is when military modernisation also came into the picture and the counter-trade—as known as offset—as a tool to help these economies. A trade practice which was meant to energise these economies via defence acquisitions linked economic programmes.

Two Visegrad Group member countries, Hungary and the Czech Republic decided to sign offset agreement with the defence firm SAAB to license Gripen fighter aircrafts. This study intends to analyse if these deals were able to help governments to reach their objectives or the two countries were unable to take advantage of the offset programmes.