Defense industry in transition

Defense industry in transition

By Anak Agung Banyu Perwita

BANDUNG (JP): The 20th century has seen more than its share of
economic trauma and devastating war. In many parts of the world,
actual progress in improving broad-based economic well-being has
fallen far short of aspirations. International arms races have
captured the attention and considerable critical economic
resources of many of the world's nations.

Since the mid-1980s, "new thinkings" have begun to set the
agenda of the security-military debate in world politics. These
new thoughts include the need to divert military industry into
economic welfare industry.

In the last decade of this century, the prospects for
improving this state of affairs have dramatically improved.
Political changes and a wider readiness to consider new economic
possibilities have created a climate in which the centuries-old
dream of converting "swords into plowshares" has met with the
hard realities of unattained economic goals to create a
compelling force for positive change. Still, it will take a great
deal of careful, pragmatic action to capitalize on this
opportunity.

Basically, the idea that military industries should be
transformed into firms producing civilian goods is not a new one.
In the mid-1970s, peace movements in both the United Kingdom and
the United States formulated such a hypothesis in terms of its
political possibilities and technical feasibility. It must also
be remembered that at the end of the World War II, industries
involved in the production of military supplies rapidly
transformed their structures to meet the new demand for civilian
products, particularly technology and commercial products.

What is more, modern firms have been recognized in such a way
as to allow for the rapid identification of new product types,
and for the adoption of whatever steps are necessary to produce
them. This is particularly true of multinational companies,
especially if they operate in more than one sector
(conglomerates), and of large national industrial groups, but it
is also characteristic of many firms of average size.

Whether an economy of a particular state is socialist or
market oriented, the system of military industries is always
government-operated. Depending on whether or not the facility is
to stay in the control of the government, the kind of detailed
information required to convert it may be kept confidential by
the government or may need to be made public.

This disclosure problem may actually be more sensitive than
that involved with production facilities and the like, since some
details of the layout and facilities of military bases are much
more revealing of their military mission.

Conversion is an inherently proscriptive issue. It is not
possible to talk intelligently about it without raising the
question of where the process is headed. It is also not enough to
have general ideas about good things that could be done with the
resources released from military activity. There must be specific
alternative civilian activities developed for those people and
facilities now servicing the armed forces.

It would also be useful for the nation to develop an explicit
agenda of national needs -- areas of civilian activity that
address what that nation perceives to be the critical civilian
problems that it faces. The national needs agenda should be wide-
ranging, including not only traditional public works projects
such as road-building but also projects aimed at attacking key
social problems such as drug trafficking or crime.

The government involved could then determine the kinds of
specific projects in which it could and should be involved that
will address those problems. Then, the resource requirements of
these projects should be compared with the supply of resources
released as a result of conversion. A subset of projects could
then be selected that would both address the needs and serve as
reasonable alternative activities for the facilities and
workforces to be converted.

In a planned economy, these projects could be directly
integrated into a planning process. In a market economy, the
government might undertake to award contracts for the projects
for which direct government involvement is politically
acceptable. It might encourage other projects, either by
preferential tax treatment or special financing. And it might
seek to build interests in others by bringing the issue
persuasively to the public's attention. However, it is highly
likely in a market economy that the private sector will generate
many of its own alternatives in the process of seeking profitable
markets.

The development of international needs agendas on regional and
global bases could also be encouraged. There is little doubt that
some of the most critical problems facing the world are best
solved cooperatively. Many of these also present alternative
agendas of useful economic opportunities for the resources that
are being converted. Technical fixes will certainly not solve the
problem of global pollution or stagnated development.

However, the most pragmatic solutions to these problems may
have components that could usefully employ scientific and
technical skills now focused on military research and
development.

The productive capacity of other forms of labor and capital
released from military activities could likewise play a role in
producing a range of goods such as pollution-control devices and
equipment that would also further these objectives. It would
certainly be within the role of the United Nations to help
instigate a process of developing such needs agendas, along with
practical projects that would move them forward.

These large-scope projects might also be divided into
subprojects that are coordinated internationally but funded
independently by each of the nations that undertakes
responsibility to carry them out. Alternatively, an international
fund to support key global infrastructure and environment
projects could be established.

The fund could be created with financing provided by
contributions equal to an agreed fraction of the money saved as
each member nation's military expenditure is reduced. According
to some economists, the reduction or elimination of military
expenditure is always taken as a welcome development. Military
expenditure, to a large extent, is an economic burden to a
nation's economy. Such expenditures represent a government
allocation of national resources for a military product that
flows neither into public consumption, which increases the
general standard of living, nor to investment, which benefits
society's future productivity.

To put it another way, military expenditure is both
economically unproductive and socially wasteful. Indeed, military
goods and services are unique in that this output eventually
leaves the economic cycle almost entirely. Access to the fund
could also be made dependent on the extent to which the nations
involved cut back on their arms expenditure.

A sufficient number of civilian options must be found if
conversion is to be successful. To be sure, each nation will
approach the search for these options in a different way, but it
would be desirable to have a degree of international cooperation
so that gains from conversation might be turned most effectively
to the benefit of the largest possible fraction of the world's
population. To a larger extent, it would eliminate the use of
military force in international relations and on the other hand,
it would also stimulate the creation of a new better world order
in the coming century.

The writer is a graduate from Lancaster University, England,
and a lecturer at the Department of International Relations,
Parahyangan Catholic University, Bandung.