Corporate performance and military production in South Africa

With the end of the Cold War and apartheid, a process of demilitarisation and dramatic cuts in military spending has marked the transition to democracy in South Africa. Between 1989 and 1997 the South African defence budget was cut by more than 50% in real terms, with most of the cuts coming from the procurement budget, which was cut by nearly 70% in real terms during the same period. These cuts have had a significant impact on the country's defence industrial base. However, there has been surprisingly little research on the changes to defence companies that have taken place since the late 1980s. This paper makes a start at rectifying that deficiency by providing an analysis of the restructuring of the major defence‐dependent companies over the period 1988–97. It uses a number of financial ratios and other measures of corporate performance to compare their experience with non‐defence companies in the rest of the South African economy during the same period.     

CONTRIBUTORS

Conventional wisdom states that the stability-instability paradox does not explain the effect of nuclear proliferation on the conflict propensity of South Asia, and that nuclear weapons have had a different and more dangerous impact in South Asia than Cold War Europe. I argue that the paradox explains nuclear South Asia; that the similarities between nuclear South Asia and Cold War Europe are strong; and that conventional instability does not cause revisionist challenges in the long run. I develop and probe a psychological causal mechanism that explains the impact of nuclear weapons on Cold War Europe and South Asia. Following the ten-month mobilized crisis in 2002, Pakistani President Pervez Musharraf may have adopted a more moderate foreign policy toward India after experiencing fear of imminent nuclear war, as Soviet Premier Nikita Khrushchev did forty years earlier. I argue that the stability-instability paradox explains Cold War Europe and nuclear South Asia and will, conditional on Iranian and North Korean revisionism, predict the impact of nuclear weapon development on these states' conflict propensities.     

SHINING A SPOTLIGHT ON THE SPACE RACE IN ASIA

Asia's Space Race: National Motivations, Regional Rivalries, and International Risks, by James Clay Moltz. Columbia University Press, 2012. 290 pages, $35.     

SPEED BUMP ON THE ROAD TO GLOBAL ZERO

The prospect of the United States continuing to reduce the size of its nuclear arsenal to “very low numbers” has raised questions in Japan and South Korea, where US extended deterrence guarantees are premised on the “nuclear umbrella.” In both countries, however, concerns focus less on numerical arsenal size than on the sufficiency of specific nuclear and non-nuclear capabilities to meet evolving threats and on the degree of broader US commitment to these alliances. This article assesses developments in US-Japan and US-South Korea relationships in response to the Obama administration's nuclear disarmament policies, focusing on how the evolutionary course of those relationships may in turn condition prospects for sustaining this US nuclear policy direction. The analysis finds that the challenges of deterrence credibility and allied reassurance are difficult and long-term, but also that US nuclear arsenal size is secondary to broader political, strategic, and military factors in meeting these challenges. The evaluation concludes that strong alliance relationships and strategic stability in East Asia can be maintained while the size of the US nuclear arsenal continues to decline, but also that deterioration of these relationships could imperil core US nuclear policy and nonproliferation objectives.     

BANNING BIOLOGICAL WEAPONS

The Biological and Toxin Weapons Convention (BTWC) underpins the international regime to control biological weapons. The strength of the treaty however relies on national implementation. The first step for many states party to the Convention is drafting appropriate national laws and regulations. So far, 32 countries in Africa are signatory to the BTWC. More recently, in 2004, the United Nations Security Council adopted resolution 1540, which requires all UN Member States to put in place legislation to prevent the illicit trafficking of material that could be used to develop weapons of mass destruction. The need for such wide-ranging legislation is recognised African countries but its creation and implementation pose specific challenges.     

韩国反导政策:调整、原因及影响

韩国自20世纪90年代起开始考虑反导系统的构建以来,其反导政策经历了\"明确反对加入美国反导体系,自主构建韩国型导弹防御系统\"到\"强化韩美、韩美日反导合作,谋求实质上融入美国反导体系\"的显著调整与变化。韩国反导政策的演变与朝鲜核、导威胁的与日俱增、韩国自身反导能力的不足及美国的极力推动等因素密不可分。当前,韩国开始部署\"萨德\"末段高空区域反导系统,韩美反导合作日益深入,并向韩美日三边合作拓展,且取得了实质性的进展。韩国强化与美、日的反导联合,在军事、外交、安全方面引发了广泛影响。     

Does Military Spending Nonlinearly Affect Economic Growth in South Africa?

Using annual data collected from 1988 to 2015, this study provides evidence of a non-linear relationship between military spending, economic growth and other growth determinants for the South African economy. The empirical study is based on estimates of a logistic smooth transition regression (LSTR) model and our empirical results point to an inverted U-shaped relationship between military spending and economic growth for the data. Furthermore, our empirical results suggest that the current levels of military spending, as a component of total government expenditure, are too high in the South African economy and need to be transferred towards more productive non-military expenditure in order to improve the performance of economic growth and other growth determinants.