By Peter Boyle
The Avalon Airshow (primarily a bazaar for military-related aeronautical equipment and systems) does not begin in that sleepy Victorian town until October 21. But already big deals are being made for warplanes. Defence minister Senator Robert Ray announced on October 15 that the Australian government was negotiating to buy 18 "surplus" F-111 long-range bombers from the United Sates Air Force.
The F-111s are the deadliest offensive warplanes possessed by any Asia-Pacific country. Even Japan and China have nothing to match it. Australia's current fleet of 22 F-111s — soon to be nearly doubled — gives it a decisive technological edge in military prowess in this region.
While the price for these planes is not known, simply upgrading them to match the rest of the fleet will cost $10-15 million per plane. Add this expenditure to the $3 billion the government still plans to spend at the Avalon bazaar, the $4.6 billion on new, sophisticated and offensive Collins class submarines, and you'd be forgiven for thinking that this country had aggressive designs on its neighbours.
Yet in theory, Australia's armed forces are configured for defence, along the lines of the 1987 Dibb Report. The F-111 program was initiated in the — supposedly ended — era of "forward defence".
Is there a secret defence strategy? Are there plans for Australian involvement in a repeat of the Gulf War in this region, perhaps in North Korea?
Or is the purchase, as suggested by many commentators, simply an expensive ploy to pre-empt the soon to be released Liberal defence policy?
But there may be another reason for the purchase — business. Australia has a modest but rapidly growing military-related export industry. Back in 1986, it was estimated by a defence ministry report to be worth about $250 million a year and doubling every three to five years. There are no official year by year statistics for this trade, but Senator Ray said in parliament last year that total military exports in 1989-90 were worth only $115 million. This may not accurately reflect other years, but it was also revealed that 80% of these exports were components fed into production lines in the US armaments industry.
The US armaments industry was expected to show the pain of the modest cuts in US government military expenditure which followed the end of the Cold War. But according to the August 8 Economist, the armaments industry made a bigger profit in 1992 than in previous years. "Northrop, Martin Marietta, Loral, Lockheed, Logicon, General Motors' Hughes and General Dynamics are all making better operating profits during 1992 than they have for several years. Northrop has paid off [US]$400m (58%) of its long-term debt since 1990. Hughes is buying General Dynamics' missile business for $450m and Loral has bought a string of companies. Firms have also been returning cash to their shareholders. Lockheed, which helps build Trident missiles, plans to repurchase 4m shares (currently worth around $200m) and General Dynamics has just bought back some 13.2m shares at $72.25 each."
The Economist adds that all this has been done without significant conversion to non-military production. If anything, the main strategy for the industry has been to shed its non-core (i.e. non-military) business and concentrate on producing more sophisticated military equipment and systems. General Dynamics, for instance, has shed its Cessna light aircraft maker and used the cash to strengthen its core business: tactical aircraft, nuclear submarines, tanks and space equipment. Before restructuring, General Dynamics was already 85-90% reliant on military contracts.
Earlier this year, Lockheed (which gets 70% of its business from military contracts) was reported to be planning to diversify into collecting parking tickets and mail-sorting. It was deterred by major shareholder revolts.
The US armaments industry's successful evasion of the much heralded "peace dividend" was facilitated by the Bush administration. Defence cuts are structured so as to avoid immediate effects on the industry's production programs. The Gulf War created some new orders, as did subsequent arms deals with US allies in that bloodbath. Job shedding, wage cuts, contract labour and company restructuring were all that was needed to give the armaments industry better than average profits.
The influence of the military-industrial complex is immense. According to the US Manufactures Alliance for Productivity and Innovation, "defence work" accounts for 36% of radio, TV and communications equipment, 46% of aircraft and parts, 19% of the transportation sector's output, 11% of fabricated metal products and 20% of electrical machinery producers in the US.
The end of the Cold War does pose some changes for the military strategies of the US and its wealthy and powerful allies. One direction would be to dramatically scale down military production (currently costing US$2.63 million per minute globally). But that would be bad for the business of the armaments monopolies.
A better alternative, for them, was outlined in some detail in a special Defence Survey in the September 5 Economist. It argued that the key was preserving a decisive technological gap between the US and its key Western allies, on one hand, and all other countries, on the other.
This "solution" is good for business, because it perpetuates the arms race on a new dynamic. The self-appointed military guardians of t continue to spend big money on ever more sophisticated military might, while the outdated material and systems can be flogged off to the rest of the world. The Keating government's purchase of 18 F-111s would fit neatly into this scenario.
While there is nothing new about the hierarchy of weapons technology in the world (thus Australia sold its old Mirage fighters to Pakistan even while India was another customer for military exports), but the new strategy outlined in the Economist survey also argues that the New World Order requires its guardians to refashion their armed forces to make possible decisive offensive actions anywhere in the world. Because "best is dear", some of the most lucrative business for General Dynamics et al will come from this process.