Future brightens for Southeast Asian arms makers<\/p>\n
Dan Eaton, Reuters, Bangkok<\/p>\n
Economic recovery and a reluctance to rely on traditional
\nsuppliers is breathing new life into Southeast Asia's flagging
\nsmall arms industry, according to a new report.<\/p>\n
Malaysia's decision last month to reopen the arms production
\noperation of state-run Syarikat Malaysian Explosive (SME) marked
\nthe start of a trend toward boosting defence capabilities and
\nautonomy in determining national security affairs.<\/p>\n
The future of Southeast Asia's mainly loss-making state arms
\nmakers hung under a dark cloud as economically struggling
\ncountries sought to rationalise spending, according to \"Small
\nArms Production and Transfers in Southeast Asia\", published by
\nthe Australian National University this week.<\/p>\n
But analysts say the September 11 attacks and the subsequent
\nU.S.-led \"war on terror\" are boosting regional defence budgets
\nand rekindling stalled military spending programmes.<\/p>\n
\"There are not many economically rational reasons for
\nproduction of weapons by Association of South East Asian Nations
\n(ASEAN) members, but there are other reasons why people would
\nproduce them,\" David Capie, the study's author, told Reuters in
\nan interview in Bangkok.<\/p>\n
\"There is a tension between economic rationality and other
\nmotivations, like maintaining national autonomy or pork-barrel
\npolitics,\" said Capie, an expert on the small arms trade at the
\nUniversity of British Columbia in Canada.<\/p>\n
\"The thing since Sept. 11 is that those other motivations are
\nnow trumping economic rationality and breathing new life into
\nwhat was really an industry in decline.\"<\/p>\n
While details of the economics of small arms production are<\/p>\n
closely guarded secrets in most states in the region, the
\nreport says production is costly and not usually economically
\nviable.<\/p>\n
\"The flood of former-Soviet and eastern bloc small arms into
\nthe market and the need to import raw materials for ammunition
\nproduction makes it extremely difficult for Southeast Asian
\nproducts to compete internationally on price,\" the report says.<\/p>\n
SME ammunition costs between five and 20 percent more per unit
\nthan similar products on the market, the report says.<\/p>\n
\"But regional governments are going to spend money on
\nmaintaining their production lines, even if they have to pay more
\nthan they would on the open market,\" said Capie.<\/p>\n
\"It shows that they want to maintain a production capability
\nand reduce dependence on outside suppliers.\"<\/p>\n
The study tracks the production of weapons in Southeast Asia
\nover the past three decades. Previously, the region was dependent
\non guns and ammunition from Europe, China and the United States.<\/p>\n
Today at least six ASEAN members -- Malaysia, Myanmar, the
\nPhilippines, Singapore, Indonesia and Thailand -- make small arms
\nand are self-sufficient in small-calibre ammunition and ordnance.<\/p>\n
But only Singapore Technologies, another government-owned
\ncompany, has been able to tap into lucrative export markets in
\nany significant way and join the ranks of internationally
\ncompetitive defence industries.<\/p>\n
Singapore has exported ordnance, machine guns and assault
\nrifles to a host of global troublespots including Fiji, Papua New
\nGuinea, the Solomon Islands, Myanmar, Zimbabwe and Croatia.<\/p>\n
Other manufacturers have struggled. Indonesia's Pindad PT,
\nsuffered the indignity of seeing the Indonesian army go to China
\nto buy mortar ordnance recently, and Malaysia's SME closed its
\narms production operation in February 2001.<\/p>\n
But in April, Malaysia announced a defence shopping spree,
\nincluding a reported 84.5 million ringgit (US$22.2 million) of
\nSteyr assault rifles from SME.<\/p>\n
\"Malaysia was very unsuccessful with its export programmes and
\nnow they are basically reopening this industry for domestic
\nconsumption,\" said Capie.<\/p>\n
\"Pindad is also pushing the Indonesian government to buy a new
\ninfantry weapon. Jakarta, with the current military embargo by
\nthe U.S., has had plenty of experience in the need for a degree
\nof self-sufficiency.\"<\/p>",
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"sponsor": "Okusi Associates",
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