Defense Industrial Restructuring and Defense Offsets in South Africa: A Tale of Globalization?

By Richard John Haines.

Published by The Global Studies Journal

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Article: Print $US10.00
Article: Electronic $US5.00

The globalization and internationalization of defense production is an emerging field of specialized research, although at present relatively little of this work has been conceptualized within the terrain of Global Studies. Of particular interest is the widespread invocation of defense countertrade and offsets (often described as defense industrial participation) in defense procurement relationships between OECD countries and developing and transitional economies. Further key issues include the nature and impact of technology transfer, and the interaction of globally active defense conglomerates with national political elites. The paper explores the related processes of defense procurement and defense industrial restructuring in South Africa. It argues that the government in South Africa, by significantly externalizing its defense procurement and looking for a substantive accompanying package of offsets and countertrade, has seemingly compromised the national defense industrial base. Furthermore, the current strategy and policy choices are not, in a simple sense, the working out of the imperatives of globalization, but also conditioned by elite political and accumulation strategies. The paper is comprised of three main sections. First, it provides an overview of international developments in defense industrial restructuring. Second, it examines the relationships between multinational defense firms and consortia, and South African firms and state agencies in the implementation of defense and non-defense industrial participation (or offsets) as part of the controversial SDP (Strategic Defense Procurement) exercise, and similar pending interventions. Third, the paper explores the restructuring and partial globalization of the South African defense industrial base. Finally, select strategic and political economic issues are raised in regard to the South African case, and thereafter theoretical implications appropriate to the terrain of global studies are considered briefly.

Keywords: Defense Industrial Restructuring, Defense Procurement, Defense Offsets, South Africa, Globalization

Global Studies Journal, Volume 4, Issue 4, pp.1-22. Article: Print (Spiral Bound). Article: Electronic (PDF File; 1.016MB).

Prof. Richard John Haines

Professor and Head of Department, Department of Development Studies, School of Economics, Development and Tourism, Nelson Mandela Metropolitan University, Port Elizabeth, Eastern Cape, South Africa

Professor Richard Haines is Professor and Head of the Development Studies Department, in the School of Economics, Development and Tourism, at the Nelson Mandela Metropolitan University (NMMU). He has an MA from the University of Natal and a PhD from the University of London. He is a Visiting Professor in Economics and HRM at the Middlesex University Business School, London. He has researched and written in the areas of development policy and industrial strategy, development history, defense offsets and defense economics, outsourcing and comparative human resource management, and the political economy of land. He has served on the editorial boards and committees of a number of academic journals. He has undertaken a range of contractual research and project management most especially in the fields of industrial and local economic development. His current applied research interests include the restructuring of the South African defense industry, social and cultural capital, and a re-thinking of the nature and deployment of state enterprises.

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