Transformation or Stagnation? The South African Defence Industry in the early 21st Century
In post-Apartheid South Africa, the ANC Government faced the challenge of restructuring an unsustainably large defence sector. This was in the context of economic and social problems and a declining international arms market. This paper considers the restructuring of the South African industry over that period and more recently, providing a valuable case study of defence industrial restructuring in a small industrialised economy. It considers how the public sector (DENEL) and private sector responded to the cuts in defence spending and the impact of the Government’s decision to modernise the South African Defence Force through foreign procurement, the Strategic Defence Package (SDP) but with extensive offset deals. Within this context the prospects for the industry and the issues surrounding the privatisation of DENEL are considered. The SDP and its offset deals is seen to be continuing to have a considerable impact on the defence industry, but is of questionable value to the South African economy. While the defence projects seem to have some successes the experience of the non defence projects is poor and overall the value of the deals is nowhere near the promises made at the outset. Lack of transparency has created a environment where corruption was almost inevitable and successful industrial planning almost impossible. While there is still some way to go, the scepticism of offset programmes expressed by Brauer and Dunne (2004) seems to be justified by the experience of South Africa.
|Date of creation:||Dec 2005|
|Contact details of provider:|| Postal: 0117 328 3610|
Phone: 0117 328 3610
Web page: http://www1.uwe.ac.uk/bl/research/bristoleconomics.aspx
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dunne, J. Paul, 1995. "The defense industrial base," Handbook of Defense Economics,in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 14, pages 399-430 Elsevier.
- Jurgen Brauer & J Paul Dunne, 2005. "Arms Trade Offsets and Development," Working Papers 0504, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
- Peter Batchelor & Paul Dunne, 2000. "Industrial participation, investment and growth: The case of South Africa's defence-related industry," Development Southern Africa, Taylor & Francis Journals, vol. 17(3), pages 417-435.
When requesting a correction, please mention this item's handle: RePEc:uwe:wpaper:0514. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Felix Ritchie)
If references are entirely missing, you can add them using this form.