bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

COME the day of reckoning, Saddam Hussein will be held accountable for many things - revolt, mass murder, bloody repression, cruel dictatorship, and for being an all-round bad guy.

  He is also responsible for the world's first video-age war and sparking a multi-billion dollar quest in Asia, and other parts of the globe, for state-of-the-art weapons.

  Straight-to-television images of smart bombs, stealth fighters and patriot and cruise missiles crushing Iraq, in what was meant to be the Mother of All Battles, performed as excellent promos for the sales of modern Western manufactured arms.

  'As technology advances, the type of weapons people buy get more advanced,' Asia-Pacific editor for Jane's Defence Weekly, Robert Karniol, said.

  Last year, Southeast Asia took over from the Middle East as the world's largest arms market, in spite of an overall drop in trade. Deals were worth US$22 billion and accounted for 22 per cent of the global total.

  The problem for many Asian countries is they cannot afford all of the American, British, Russian or German hardware they want.

  This has led to development of indigenous arms-making programmes in most regional nations, albeit most in Asean still are on a small scale compared with the West or even Northeast Asia. One relatively new manufacturer is South Korea's Hyundai Precision and Industry Co, which produces tanks, armoured cars and vehicle launch platforms. It exhibited these at this year's Defence Services of Asia show in Kuala Lumpur.

  'We have been informed that the Malaysian Army is planning to form a tank force, and this will be the best opportunity to introduce our hi-tech products to the Malaysian government,' a senior director of Hyundai's defence systems division said.

  In fact, according to the Stockholm International Peace Research Institute (Sipri), which monitors the global movement of weapons, Malaysia is a good bet. It spent $1.12 billion on weapons last year, compared with only $359 million in 1994.

  This was exceeded only by China ($1.69 billion), South Korea ($1.67 billion), Egypt ($1.55 billion) and Turkey ($1.12 billion). China recently completed deals with Moscow for 72 high-performance SU-27 fighter jets, two submarines and tanks.

  On Friday, South Korea took delivery of the first batch of tanks, armoured cars and ammunition, worth $210 million, which Russia is sending as payment for loans.

  Other big regional spenders include Thailand ($888 million) and Taiwan ($980 million), both of which have either bought or are in the process of buying hi-tech systems from the US, including missiles and aircraft. China and Taiwan are caught up in a 'tit-for-tat' arms race which is a major factor behind their continually high budgets.

  'The market is increasingly competitive,' Mr Karniol said. 'In quantitative terms, defence spending has grown rapidly, but compared to GNP it is declining.'   Most Western experts paint a bleak picture for the future of the home-grown arms trade in the region, especially when it comes to high technology.

  Bates Gill, head of Sipri's Security and Arms Control in East Asia section, predicts hard times ahead for the established indigenous weapons industries in Northeast Asia - China, Japan, the Koreas and Taiwan - and an even harder time financially for the fledging concerns in Asean.

  'The industries tend to lose money,' he said. 'Unit per unit, it is more expensive and of not as good quality as if they had bought it from overseas. They don't have a significant amount of demand at home to sustain more technologically advanced weapons, and with export markets shutting, it will be difficult for them to thrive.'   Mr Gill believes the industries will restructure and consolidate and will have to specialise in 'nice' markets such as electronics if they are to become profitable.

  He said China faced the biggest challenges, because up to 75 per cent of its defence enterprises either barely broke even or were in the red.

  Many of the weapons produced on the mainland were 'old before they leave the shop floor' and he said that China had never been good at making technological leaps in conventional weapons.

   Senior lecturer at the University of Hong Kong School of Business, John Frankenstein, who specialises in the Chinese military-industrial complex, also believes the sector faces an uncertain future.

  He said that obtaining factual information about mainland arms production, sales and procurement was difficult, but exports had dropped and Beijing's attempts to make state-of-the-art technology had been a dismal failure.

  China also is one of the world's largest producers and suppliers of land mines, which kill 24,000 people worldwide every year. On Wednesday, Peng Qingyuan, a standing committee member of the National People's Congress, defended the manufacture and use of these weapons as a justifiable military need.

  'The latest available numbers on China from the US Arms Control and Disarmament Agency indicate that between 1983 and 1993, Chinese arms exports as a percentage of total exports, ranged from 8 per cent in 1984 to 1 per cent in 1992 and 1993, Mr Frankenstein said.

  'In constant 1993 dollars, PRC arms exports ranged from $3.6 billion in 1988 [when arms exports were 6.3 per cent of exports] to $897 million and $950 million respectively in 1992 and 1993. Indeed, in the overall Chinese economic picture, defence does not contribute greatly to the aggregates - but then, the importance of defence transcends economics and figures mightily in the domestic and international political balance.'   Mr Frankenstein said exports still only made up 1 per cent of the country's total and that the arms industry in China was in a 'bad way'. This had been compounded by cheap, and more reliable, Russian weapons available in large numbers since the end of the Cold War.

  The export records of North Korea and the mainland have been criticised by US Secretary of Defence, William Perry, in a US government report. 'China remains a source of concern, primarily because of the role of Chinese companies in supplying a wide range of materials, equipment and technologies that could contribute to NBC [nuclear, biological and chemical] weapons and missile programme in countries of proliferation concern,' the report said.

  'North Korea has provided hundreds of Scud missiles to countries in the Middle East, such as Iran and Syria, and is developing and marketing the new 1,000-km range Nodong missile.

  'These sales provide Pyongyang with critically needed foreign exchange. North Korea has received millions of dollars worth of bartered goods and services and hard currency for its deliveries, and it will continue to market missiles and missile-related technology to support its weak economy.'   Recent seizures of weapons in Hong Kong which are alleged to have come from North Korea and China, appear to bear out US fears that there is still a market for illegal sales of weaponry.



Arms dealers take aim at Asia as sales slump