Southeast Asian arms industry has bright future ahead: Report
Southeast Asian arms industry has bright future ahead: Report
Dan Eaton, Reuters, Bangkok
Economic recovery and a reluctance to rely on traditional suppliers is breathing new life into Southeast Asia's flagging small arms industry, according to a new report.
Malaysia's decision last month to reopen the arms production operation of state-run Syarikat Malaysian Explosive (SME) marked the start of a trend toward boosting defense capabilities and autonomy in determining national security affairs.
The future of Southeast Asia's mainly loss-making state arms makers hung under a dark cloud as economically struggling countries sought to rationalize spending, according to "Small Arms Production and Transfers in Southeast Asia", published by the Australian National University this week.
But analysts say the Sept. 11 attacks and the subsequent U.S.- led "war on terror" are boosting regional defense budgets and rekindling stalled military spending programs.
"There are not many economically rational reasons for production of weapons by Association of Southeast Asian Nations (ASEAN) members, but there are other reasons why people would produce them," David Capie, the study's author, told Reuters in an interview in Bangkok.
"There is a tension between economic rationality and other motivations, like maintaining national autonomy or pork-barrel politics," said Capie, an expert on the small arms trade at the University of British Columbia in Canada.
"The thing since Sept. 11 is that those other motivations are now trumping economic rationality and breathing new life into what was really an industry in decline."
While details of the economics of small arms production are closely guarded secrets in most states in the region, the report says production is costly and not usually economically viable.
"The flood of former-Soviet and eastern bloc small arms into the market and the need to import raw materials for ammunition production makes it extremely difficult for Southeast Asian products to compete internationally on price," the report says.
SME ammunition costs between five and 20 percent more per unit than similar products on the market, the report says.
"But regional governments are going to spend money on maintaining their production lines, even if they have to pay more than they would on the open market," said Capie.
"It shows that they want to maintain a production capability and reduce dependence on outside suppliers."
The study tracks the production of weapons in Southeast Asia over the past three decades. Previously, the region was dependent on guns and ammunition from Europe, China and the United States.
Today at least six ASEAN members -- Malaysia, Myanmar, the Philippines, Singapore, Indonesia and Thailand -- make small arms and are self-sufficient in small-caliber ammunition and ordnance.
But only Singapore Technologies, another government-owned company, has been able to tap into lucrative export markets in any significant way and join the ranks of internationally competitive defense industries.
Singapore has exported ordnance, machine guns and assault rifles to a host of global troublespots including Fiji, Papua New Guinea, the Solomon Islands, Myanmar, Zimbabwe and Croatia.
Other manufacturers have struggled. Indonesia's PT Pindad, suffered the indignity of seeing the Indonesian Army go to China to buy mortar ordnance recently, and Malaysia's SME closed its arms production operation in February 2001.
But in April, Malaysia announced a defense shopping spree, including a reported 84.5 million ringgit (US$22.2 million) of Steyr assault rifles from SME.
"Malaysia was very unsuccessful with its export programs and now they are basically reopening this industry for domestic consumption," said Capie.
"Pindad is also pushing the Indonesian government to buy a new infantry weapon. Jakarta, with the current military embargo by the U.S., has had plenty of experience in the need for a degree of self-sufficiency."