‘Defence Industry – SA’s own oil’

The defence industry has the potential to stimulate the country’s economy and create the much needed jobs, argues

RADICAL economic transformation has become a new popular phrase in the country’s political lexicon. The phrase enjoyed presidential endorsement during the State of the Nation Address by President Jacob Zuma last month.

While many observers may be looking at various sectors such as mining, agriculture and even the ocean economy to deliver the economic transformation, there is one unpolished jewel that can make the South African economy to sparkle – the defence industry.

According to Trevor Xola Mketi, director Defence Industry Governance, the defence industry has a huge potential that can contribute to the delivery on the promise of radical economic transformation and make the objectives of the National Development Plan (NDP) of reducing unemployment, poverty and inequality, a reality.

In a bid to unleash the full potential of the defence industry, the Department of Defence has set up a Defence Industry Council.

“One of the major purposes of the Defence Industry Council is to enable the various players in the industry to be organised so that they can speak with one voice. The other objective, which is equally important, is to speed up the transformation of the defence industry,” says Mketi.

“The realisation that our defence industry is dependent mainly on exports due to ever dwindling budget and competing social demands on our economy has compelled the department to explore other ways of supporting the industry.

“As a result, we had to come up with a robust plan to support our industry internationally and particularly in the continent.

“We have to reclaim the continent from other competing defence industries from Europe and elsewhere by transferring technology to other African countries and thereby strengthening their manufacturing capacity. Strong African defence industries are a strong South African defence industry for we are intertwined by history and geography and there for family.

“NDIC is a vehicle that will expand our exports while developing African manufacturing capacity and enable us to collaborate with other countries in research and development.

“For a long period, the defence industry has been treated like a step-child, relative to other industries. For example, when top government delegations visit other countries on trade missions, all sorts of industries are brought on board as part of the visit but the defence industry is often left out.

“This situation has to change. The Defence Industry Council has to play an educating role to change that. The council should mobilise our politicians and business leaders to appreciate the powerful role that our industry can play to unlock the full potential of this industry to the economy.

“Ministers, MECs from the different provinces and even mayors should have a good understanding of what our defence industry is capable of producing so that these politicians become basically not just ambassadors of the country but active sales-people for the various products that our industry can produce.

“Throughout the world, the defence force is at the cutting edge of new technology. For instance, the internet, which has become one of the most common methods of communicating, was developed by the US Army. Later it was commercialised. This is what we need to do as a country. We need to monetise our inventions and technologies to address the burning issues of poverty and unemployment.

“Our defence industry has some of the most advanced technologies in the world. These include things such as electronic warfare technology (technology that makes bagging of phones impossible), radar systems that can be used for detection of weapons, even in the sea.

“We also have very advanced missile technology and some of the best armoured vehicles in the world. All these products should be marketed throughout the world so that we can increase production. When we manufacture more products, we will be creating jobs.

“Military products are expensive. You pay millions of rands for a missile. You pay millions for a Rooivalk,” he says.

Mketi says many of the social and economic problems facing South Africa and even the continent can be traced to the fact that Africans produce very little of the things that they use on a daily basis.

He says many wars in countries such as Sudan, the Democratic Republic of the Congo and Central Africa Republic were fuelled by lack of economic progress and development.

“There is a new strategy that is being developed in our Defence Department. The idea is to offer a 10-key solution to the countries that the South African National Defence Force soldiers have been deployed for peace mission.

“The thinking, that is gaining traction, is that instead of just keeping the warring factions apart, we should play a more active role in the development of the country. In other words, we should assist the country to build schools, clinics, bridges, shopping malls and other infrastructure that the country may require.

“When there is development, there will be increased economic activity and we will contribute to address social injustice that was largely caused by lack of economic opportunities. And when more economic opportunities are created, we may have just found a long term solution to attain peace. This would be a more sustainable way of disarming the rebels. Currently, people find it easy to take up arms and fight the government because there are too few economic opportunities,” says Mketi.

He says players in the defence industry would be part of the 10-key solution that would be offered to the countries where the SANDF has a presence.

“The idea is to create more work for the various defence firms. This will be a win-win solution because while we will be helping the countries torn by civil strife to attain peace, we would also be helping them to develop economically.

“Recently there have been reports of tensions in communities sparked by xenophobia. The truth is that if we can attain higher levels of economic progress in most of Africa, economic migrants would not be forced to smuggle themselves into South Africa.

“Currently there is tension, particularly in poorer communities, between locals and foreigners mainly because these people are fighting over the little resources that can be found in their areas. Develop the economy and create more opportunities, the tensions would disappear,” he adds.

Mketi accepts that the defence industry still has a long way to be fully representative of the country’s demographics. It is one of those sectors that need “radical” transformation.

He says the Defence Industry Council has a program to develop new players in the industry.

“It is a well known fact that the defence industry has been dominated by white males. Black people were excluded from this sector for obvious reasons during apartheid. So, we have to be deliberate in the promotion of black people into the industry.

“We are working with the CSIR and other entities such as Armscor and Denel to create space for new entrants into the defence industry,” he says.

Asked why the program appears to be focusing mainly on small businesses, Mketi says: “You have to crawl before you can walk and eventually run. The main issue here is to create an opening for people who had no access to this industry. Once they are inside, they can develop and grow to become big industry players.

“The African continent has big potential. For instance, many African countries import second hand cars from Japan because they cannot afford new cars.

“In South Africa, we have already manufactured the African Truck. With that technology, we can produce smaller trucks and even vehicles for use by private use. Can you imagine how we can change the economy of the continent if we start selling South Africa-made vehicles to the rest of the continent?

“Think about the suppliers of car-parts such as seats, oil filters, brakes, wheels and other components. We can radically stimulate our economy. This development can be our oil,” adds Mketi.

According to Mketi, the defence industry is an extension of the South African defence and the country’s foreign policy.