{"id":23229,"date":"2015-11-05T11:00:41","date_gmt":"2015-11-05T00:00:41","guid":{"rendered":"http:\/\/www.aspistrategist.ru\/?p=23229"},"modified":"2015-11-05T09:29:18","modified_gmt":"2015-11-04T22:29:18","slug":"new-ways-of-thinking-about-the-global-arms-industry-dealing-with-limited-autarky","status":"publish","type":"post","link":"https:\/\/www.aspistrategist.ru\/new-ways-of-thinking-about-the-global-arms-industry-dealing-with-limited-autarky\/","title":{"rendered":"New ways of thinking about the global arms industry: dealing with \u2018limited autarky\u2019"},"content":{"rendered":"

\"COLLINS<\/a><\/p>\n

As Australia approaches a decision concerning its acquisition of a next-generation submarine, it faces several crucial questions, not least of which is whether to build this submarine in Australia or buy it off-the-shelf from a foreign supplier. The appeal of domestic production is very powerful; \u2018security of supply\u2019 is a compelling argument, as are the potentially huge economic benefits that could accrue from manufacturing such a large number of submarines at home. At issue, however, is whether such an approach makes sense from an objective cost-benefit analysis.<\/p>\n

Most countries desire producing their own armaments in order to achieve self-sufficiency, or \u2018autarky,\u2019 in defense procurement; they wish to import as little as possible, for reasons of national security, balance of payments, jobs, etc. Consequently, achieving a high level of autarky is believed to the goal of any self-respecting arms-producing state\u2014otherwise, it is judged to be somehow a failure as a weapons manufacturer.<\/p>\n

Nevertheless, there are many countries that do not<\/em> aspire to high levels of autarky. Either out of necessity or by design, they\u2019ve chosen to specialise in certain areas of armaments production and have subsequently jettisoned\u2014or never pursued\u2014other areas of arms manufacturing. They follow a defence-industrial strategy of \u2018limited autarky\u2019, mainly to preserve at least some capacity for indigenous production, partly for economic reasons (to preserve their existing defence-industrial bases or to protect jobs, their balance of payments or their arms exports) but particularly for reasons of \u2018strategic sovereignty\u2019.<\/p>\n

In many instances, such limited autarky can pay off. Many times, however, it can be an expensive undertaking that provides little in the way of true self-reliance. Overall, therefore, it\u2019s critical to balance the costs of limited autarky (in terms of costs, technology and foreign competition) with strategic gain, if any.<\/p>\n

Justifying the pursuit of limited autarky in armaments production is always going to be problematic. Determining which areas of arms manufacturing are absolutely critical to national security, i.e., their \u2018deemed strategic value,\u2019 can be so subjective as to be absurd. Nevertheless, there are cases where limited autarky may make sense in contributing significantly to national security, while also being cost-effective. Those may include the manufacture of small arms and light weapons (where production technology is relatively mature and local demand or the possibility of exports are high); maintenance, repair and overhaul capabilities; and systems engineering and integration skills. It might also make sense to engage in armaments production where technology demands are attainable, competition may be weak, and the export potential is high, such as lightweight aircraft, armoured vehicles, and even some missile systems.<\/p>\n

On the other hand, it\u2019s probably ill-advised to enter into armaments productions where the entry costs for new producers are high (in terms of technology requirements and the expense of manufacturing) and where foreign systems are widely available and competitively priced. Those problems are compounded in instances where only a few number of systems are to be acquired, leading to high unit costs relative to foreign-sourced systems. In general, it is difficult to justify indigenous armaments production in such sectors as high-end fighter aircraft, tanks, large warships, and submarines.<\/p>\n

For Australia, this conundrum has been nowhere more apparent than in the case of the Collins<\/em> class submarine replacement program. The next-generation submarine will be the most expensive military procurement effort in Australian history, costing anywhere from $18\u00a0billion to $40\u00a0billion for 12\u00a0boats. While the strategic value of producing the submarines indigenously may be high, most of the other benefits of domestic manufacture\u2014such as performance, keeping production costs down, and export potential\u2014are likely to be quite low. Moreover, any submarine meeting Australia\u2019s range and endurance requirements is likely to be quite different from any \u2018readily available\u2019 system, adding additional costs. Consequently, such a high-end, ambitious program could easily be relatively expensive, while providing few benefits in terms of national security, technology acquisition, or jobs.<\/p>\n

In sum, decisions to produce arms\u2014even to engage in niche production\u2014need to be continually evaluated and re-evaluated for their costs and benefits. Even if a nation only wants to pursue limited autarky, that can still be a high-risk, low-reward undertaking.<\/p>\n","protected":false},"excerpt":{"rendered":"

As Australia approaches a decision concerning its acquisition of a next-generation submarine, it faces several crucial questions, not least of which is whether to build this submarine in Australia or buy it off-the-shelf from a …<\/p>\n","protected":false},"author":434,"featured_media":23230,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"footnotes":""},"categories":[1],"tags":[44,1531,1530,579],"class_list":["post-23229","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-australian-defence-force","tag-arms","tag-autarky","tag-shipbuilding"],"acf":[],"yoast_head":"\nNew ways of thinking about the global arms industry: dealing with \u2018limited autarky\u2019 | The Strategist<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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