Though short of both cash and enemies, South Africa has embarked on a $5 billion spending spree on foreign-made, high-tech weapons.
The country is not cutting corners in replenishing its armed forces, buying three submarines and four warships from Germany, 40 top-of-the-line helicopters from Italy and as many as 28 fighter jets from Britain.
While it seems incongruous, South Africa is gambling on its largest arms purchase ever to kick-start its sputtering economy and create badly needed jobs. The government's unorthodox "guns and butter" program uses the promise of fat defense contracts as a lever to extract agreements from foreign arms makers to return the favor, by investing in South Africa's defense industry or civilian projects.
The result, officials proudly announced this month, is deals negotiated with German, Italian, British and Swedish defense suppliers for nearly $17 billion in development projects on South African soil. These include a steel mill, crankshaft factory and tannery. That represents a return of more than 3 to 1 on South Africa's military-equipment investment.
"South Africa is in a transitional period," said Defense Minister Mosiuoa Lekota. "We had more than just military purposes in mind."
"What we sought to do," said Trade and Industry Minister Alec Erwin, "was to strengthen South Africa's manufacturing base. We went looking for investments."
It is not uncommon for developing countries to negotiate counter-trade agreements with foreign arms suppliers. Such deals typically require defense contractors to buy a portion of their parts or commodities, such as oil, from local industries.
But no country has ever done it on South Africa's scale, using defense purchases abroad to procure direct investment at home. As a prerequisite for negotiations, South Africa has essentially required its defense suppliers not only to buy parts from its limited domestic defense industry but to do business in South Africa on their own. If a firm did not have the expertise or experience to operate, say, a steel factory, it was expected to recruit a partner that did. To win the South African contract for the military vessels, the German contractor found partners to construct a cutlery plant in South Africa.
"It's a novel approach, but very pragmatic" said Lyndon Birns, a spokesman for British Aerospace-Saab consortium. It won the contract for fighter jets while agreeing to broker or pursue nearly two dozen other investment deals here. "We've entered into counter-trade agreements before but never one as aggressive or as far-reaching as this. In the end, we were quite happy with the results. They're really killing two birds with one stone, I guess."
Not everybody agrees. Critics say the $5 billion spent for foreign weapons could have been put to better use directly at home. And the arms buildup has fueled speculation, rumors and accusations--none proven--that high-ranking government officials are getting kickbacks from contractors.
"This would have been a good opportunity to do things differently," said Anglican Archbishop Njongkulu Ndungane, "and concentrate on the internal threats to democracy: threats from poverty, from joblessness, from lack of education, from crime, from AIDS. The list goes on and on."
There is no military threat to justify the expense. When the defense department was asked in an audit three years ago to identify possible threats to national security, it could not name a single foreign aggressor.
But the economic argument is compelling. Since South Africa's first democratic elections five years ago freed its black majority from oppressive white minority rule, known as apartheid, the economy has struggled to adjust to its conversion to free-market policies and increased competition from abroad.
The foreign investment that was expected to flow into the country after the sanctions and boycotts from the apartheid era were lifted has so far failed to materialize. Unemployment among blacks has soared to nearly 40 percent, and the lack of resources has hurt the government's efforts to improve education, housing and social services.
At the same time, South Africa's once-vaunted military has labored with weapons that are all but obsolete. With foreign governments unwilling to sell it arms during apartheid because of international sanctions, South Africa's navy is stuck with submarines and warships that are nearly 30 years old. Air force helicopters haven't been replaced in almost 40 years.
Despite the need for new equipment, South Africa's new, less hawkish approach and the end of the Cold War meant proposals to buy new conventional weapons became a source of debate inside and outside the South African defense force, said Garth Shelton, a national security expert who worked in the defense department until 1997.
With no identifiable enemies, the military likely would be deployed as peacekeepers to mediate the myriad disputes in neighboring African countries, such as Congo and Angola. That requires much less expensive equipment--surveillance and riot gear, cargo planes--than conventional warfare.
"There was a very real question about whether we needed these weapons at all, given our economic situation and the fact that we could not identify any external threats," Shelton said. "There was a very real debate within the department about whether we needed a military at all."
But scaling back its military operations inevitably would have caused more job losses in the short term, as soldiers and employees of the already small local defense industry were made expendable. The government flinched at that scenario and decided instead to pour resources into its military.
To win public support, cabinet ministers pitched the arms buildup to the public as an economic plan. Government negotiators insisted that potential sellers provide investment proposals even to be considered for contracts, said Chippy Shaikh, chief of acquisitions for the defense department. Proposals were not forced on bidders, but various viable projects were suggested, he said.
The German consortium that won the contract to build South Africa's warships and submarines recruited partners to build a steel mill and crankshaft factory in South Africa's Eastern Cape region after government officials pitched their low-cost electricity, a prime factor in overhead costs for most manufacturers.
"These are good projects," Shaikh said. "It's just that these companies didn't have the incentive to look into them before. The defense contracts gave them that incentive."