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Arms trade: corrupting the soul of Africa and developing countries

The government’s strategic arms procurement (the so-called “arms deal”) has been the root of all troubles for our young democracy. The arms manufacturers prey on young democracies and the developing countries, enticing them with promises of endless benefits that industrial participation projects (offset arrangements) make possible.

Shortly after freedom ushered a new government after 1994, a rather bizarre decision (according to some) was taken by cabinet after a comprehensive defence review to procure arms. Cabinet believed at the time that in the medium- and long-term the benefits deriving from the Defence Industrial Participation (DIP) and Non-defence Industrial Participation (NIP) programmes will fully offset the economic and fiscal costs of the military equipment.

Cabinet was convinced at the time that the industrial participation projects linked to the arms deal would yield significant economic benefits for South Africa in the form of foreign investment by companies associated with the suppliers of military hardware, the counter-purchase by suppliers of military hardware of South African goods and defence related offsets (that local defence firms would earn over R4 billion via direct participation in the production of aircraft and ships being procured, including transfer of technology in royalties and license agreements to SA firms). We learnt that the outcome of this arms deal was not as it was anticipated.

According to the Stockholm International Peace Research Institute (SIPRI) Yearbook of 2001 under “Armaments, disarmament and International Security”, developing countries account for 60% of global arms trade. This is problematic as almost all these countries have rather more pressing socioeconomic needs that require all necessary resources that are being diverted to arms manufacturers.

Corruption is a common bedfellow with such arms deals, as payment of “commissions” to individuals involved in negotiating these deals provides an incentive for purchases of unnecessary equipment. The recent charges of alleged corruption against Jacob Zuma and the conviction of Shabir Shaik demonstrate that corruption is endemic in these types of deals. It is vital that developing countries resist all temptations and the lure of uncertain economic benefits promised by such arms trade and direct their resources to the upliftment of the poor masses.

The arms scandal that has plagued South Africa in the past eight years should be a lesson to other countries, particularly Zimbabwe which has recently ushered in a new government of Robert Mugabe and Morgan Tsvangirai. The challenges confronting Zimbabwe are enormous and require foreign assistance.

The lure of offset arrangements linked to arms trade may be too enticing for a desperate government, which may only find itself beleaguered by allegations of corruption. Unscrupulous arms manufactures are certain of the ease with which they can lure Zimbabwean government officials into their pockets and bind the government to agreements whose benefits are disproportionate to the cost. Zimbabwe may only be saved by its bankruptcy from this despicable corruption.

The US economy is in the doldrums and the booming industry is the defence industry. The US defence industry is sustained by illegitimate wars in Iraq and Afghanistan and its Nato allies who are all too happy to procure arms from their big brother. Countries like Japan, South Korea, including the undemocratic countries like Indonesia, Colombia and Saudi Arabia are the importers of arms from the US.

It is common knowledge that the US has the nasty habit of arming both sides of the conflict, caring less of repercussions of destructive conduct. Arms sales under the Bush administration have intensified under the false guise of combating terrorism. Both Russia and the US are fighting for a share of this lucrative market and the conflict in Georgia is more telling.

The US has been open about its preferred candidate in the political battle in Zimbabwe and Tsvangirai, with less executive powers than anticipated and the military residing under control of Robert Mugabe, may scupper any intentions of displacing China as the preferred arms supplier. The US is guilty of creating the conditions that have led to seemingly intractable conflicts across Africa, from Angola to the Democratic Republic of Congo. It is the US that benefits from these conflicts. It is not without reason that most Africans view the US’s involvement in conflicts in Africa with a great measure of suspicion.

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20 Comments

  1. Scarface Scarface 19 September 2008

    Ai Sentletse, if only Thabo, Nelson and Jacob had your insights!

  2. Lebo Lebo 19 September 2008

    Amen Sentletse!

    Unfortunately the damage is done despite the warnigns and concerns of both citizens and experts in the defense field. Zimbabwe is already implicated under arms deals involving BAE systems together with Lybia and other African countries.

    This message should also go to the incoming group and the rest of the developing world. Once again it is all about logic. South Africa has no regional enemies posing any military threat and we have millions of people in poverty. The region has been unstable for such a long time, arms are the long thing anyone should be prioritising in terms budget.

    Balanced anaylsis!

  3. Lebo Lebo 19 September 2008

    FYI

    Evidence of the payment has emerged in documents seen by the Financial Times, which claims the paperwork purports to give the first details of a financial relationship between BAE and John Bredencamp, a controversial figure who has been involved in supplying equipment to the Zimbabwe military.

    British properties owned by Mr Bredencamp were raided by the Serious Fraud Office 18 months ago as part of a long running investigation into BAE aircraft sales to South Africa.

    The Financial Times claims that the payments were made between 2003 and 2005 by Red Diamond Trading, a BAE subsidiary registered in the British Virgin Islands, from a London-based Lloyds TSB account.

    The money was transferred to Kayswell Services, also registed in the British Virgin Islands. Kayswell Services’ list Mr Bredencamp as a beneficiary in its documents.

    British Virgin Island company records show Red Diamond was liquidated on May 30 last year, two weeks before BAE announced that Lord Woolf, the former chief justice, would investigate its ethical conduct and compliance with anti-corruption rules.

    Mr Bredencamp, who is reported to be a close associate of Emmerson Mnangagwa, the head of the Mugabe Government’s Joint Operational Command, has said that he always complies with the European Union arms sanctions brought against Zimbabwe since 2002.

  4. Hlabirwa Hlabirwa 19 September 2008

    “Cabinet was convinced at the time”: by the way which cabinet are referring? Would it be a cabinet under Madiba’s watch? If so how come his views/participation in this matter is never talked about?
    Indeed weapons of war are consumed by countries described as underdeveloped, and are manufactured by developed countries. One more thing, countries making weapons of war never use then in their own countries, or neighbours. Britain, France, Italy, Germany and USA, “sell” and use weapons of war in developing countries.
    if your assertion that the arms trade is a bedfellow of corruption then thsese developed countries are corrutors – hence must follow Shabir to prison.
    I doubt if they ever will!

  5. japes japes 19 September 2008

    “Cabinet was convinced at the time”. I reckon this means they got a sniff of the filthy lucre that would plop into collective pockets if they signed on the dotted.

  6. Madoda Madoda 19 September 2008

    The sad facts about the South African arms deal are:

    South Africa was not at war but was the a friendliest nation across the world with Mandela at the helm as president. So, the need for arms;

    The decision was a hypocritical policy action at the time when gear was implemented calling for fiscal discipline and a balance budget;

    Social expenditure on healthcare, education or infrastracture projects such as rail transport would have had far greater positive economic impact than the off-sets promised in the arms deal; and

    The energy crisis can be directly blamed on the arms deal because the govt ignored the early warnings as it was focused on the arms deal.

  7. amused reader amused reader 19 September 2008

    You can be tiresome Sentletse.

    I have no love for arms companies, quite the contrary, but you can’t blame the arms suppliers for leading the SA or any other government astray!!!

    One day Africa will grow up and take full responsibility for its’ own actions and the usually quite predictable consequences of those actions.

    That will be a great day and a turning point for Africa and Africans.

    Until then we must put up with this sort of nonsense.

  8. Andrew Andrew 19 September 2008

    “Unscrupulous arms manufactures are certain of the ease with which they can lure Zimbabwean government officials into their pockets…”

    I would amend as follows

    “Unscrupulous arms manufactures are certain of the ease with which they can lure unscrupulous Zimbabwean government officials into their pockets…”

    Otherwise you would be suggesting that these officials are either staggeringly naive or worse, ignorant. Either way, casting them as victims does not wash. The real victims are the people from whom the money is stolen.

  9. BenzoL BenzoL 19 September 2008

    By the time the SA Government signed up for the deal, any African Country could have told them how the “perk” system works. They signed with greedy fingers and sparkling eyes as many of their continental brothers did before. Remember that the first investigation report was “adjusted” by the then Auditor General (Shauket?) before publication. And…..the good news (for arms manufacturers): Africa keeps fighting, killing and maiming each other. When….oh, when will Africa grow up?

  10. jaycee jaycee 19 September 2008

    Don’t try and put all the blame on the arms manufacturers. Like in everyday life there are always scoundrels ready to pounce on the unwary. The government cocked up, due to blatant greed. Get the whole arms deal investigated and anyone around who is proven guilty, should face the force of law.

  11. Siphiwo Qangani with kangaroos Siphiwo Qangani with kangaroos 19 September 2008

    ‘Too bad you can’t buy a voodoo globe so that you could make the earth spin real fast and freak everybody out’…

    Good luck Africa!!!

  12. Oldfox Oldfox 19 September 2008

    Amused Reader,

    Ever hard of the Bofors arms deal scandal in India? It led to Ghandi losing the 1989 elections. (Bofors is the Swedish manufacturer of artillery). It is not just Africa that suffers from corrupt arms deals. Latin America, Middle East have also been involved.

    The arms manufacturers are definitely part of the problem.

  13. Jon Jon 20 September 2008

    Arms dealers, just like talcum powder dealers or cotton underwear dealers, are out there in a free market to sell their products.

    And if the buyer ignores the buyer’s golden rule — caveat emptor — then the buyer has to wear his hair-shirt with “idiot” stencilled across the back.

    But, with the kickbacks he’d have got, he could easily afford to offset the irritation of his hair-shirt with a cotton undergarment and talcum powder.

    And therein lies another tale…

  14. amused reader amused reader 20 September 2008

    Oldfox

    Two wrongs don’t make a right.

    It is not as if the arms companies have any kind of secret agenda is it? They want to sell as many arms as possible, and make as big a profit as possible, and they will sail as ‘close to the wind’ as the relevent government will allow.

    The governments on the other hand are supposed to be looking after the best interests of their respective peoples.

  15. Oldfox Oldfox 20 September 2008

    amused reader,

    I never implied that two wrongs make a right.

    You implied/hinted that corrupt arms deals are an African problem and that the hands of arms dealers are clean.

  16. Lebohang Lebohang 22 September 2008

    Good riddance indeed! BUSA and international markets are in agreement.

  17. Oldfox Oldfox 23 September 2008

    Sentletse,

    Your figure of R4 billion is way out.

    Estimated total value of so called industrial offsets varied for defence and non defence industries in SA, with some estimates exceeding R100 billion.
    SOUTH AFRICAN COUNCIL OF CHURCHES PUBLIC POLICY LIAISON OFFICE, quoted at this URL: http://www.africa.upenn.edu/Urgent_Action/apic_121299.html mentions R110 billion economic value and 65 000 jobs created by offsets. These are the types of figures I can remember as well, from press articles I read in 1999.

  18. Oldfox Oldfox 24 September 2008

    Lyndall,

    The issue is not funny at all, and the explanation is very simple. South Arica’s arms producers were not required to make a profit under the apartheid era, and they got their income from the SADF budget.
    After 1990, the sector was downsized (no more fighting in Angola, SWA/Namibia etc)and production volumes dropped. The Iran – Iraq war had ended (it was said that both sides purchased SA G5 howitzers).
    The SA weapons industry was forced to export to survive, but exports of weapons are difficult for developing countries. In one case, the USA prevented Pakistan buying armaments from SA. If I recall correctly, the USA also blocked one potential Rooivalk export deal, by refusing to allow their missile system to be fitted into Rooivalks. Some lower value systems were exported, but the revenues were too small to sustain the very costly weapons design and manufacturing facilities that had cost billions to set up, and at one stage, had used 25% of SA’s engineers and scientists.

    Eskom and Sasol were probably the only efficient SA state owned enterprises during the apartheid era. Iscor and SAA were not.

  19. Lyndall Beddy Lyndall Beddy 27 September 2008

    Oldfox

    I agree with you about SAA, but Iscor? It is now part of Mittal Steel!

    As for Armscor – did we not export, successfully, to Israel, and produce for SA itself (which obviously would not have included profit)?

  20. Oldfox Oldfox 27 September 2008

    Lyndall,

    I never followed the Iscor story, but I think it was privatised to increase its efficiency/profits. Mittal certainly is very profitable now, unfortunately it hurts the rest of the economy with its high prices.

    SA got a of of military know-how from Israel. I don’t know if SA exported any equipment to Israel (which could get any hardware it wanted from the USA).

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