The Arms Deal Controversy

Defence Package (SDP), has been mired in controversy virtually since its inception. More than three years after signature of the contracts in December 1999, there are still aftershocks caused by various parties hoping to either stop the process or at least inflict serious political damage. This seems to stem from being aggrieved at being excluded from the deals, because they have never subscribed to the need for such expensive equipment for the SANDF or are concerned that a fair process was not followed. The bundle of projects that was handled as a single package to obtain maximum commercial and political leverage constitutes the largest armaments deal ever concluded in South Africa. It consists of 28 Gripen Advanced Light Fighter Aircraft and 24 Hawk Lead In Fighter Trainers from BAE/SAAB, 4 corvettes from a German Frigate Consortium, 3 submarines from a German Submarine Consortium, and 30 Agusta 109 helicopters from Italy. The total contract value at date of signature was approximately R24.9 billion (US$3.98 billion) at the rate of exchange prevailing at that time (R6.25 to the US dollar and R6.4 to the euro). The bulk of the equipment is to be imported and the value of the contracts fluctuates as the rand fluctuates against the other currencies. Reaction against the deal stems from five separate concerns that tend to get intertwined: • Does South Africa need such a large and well-equipped defence force? • Can the country afford the costs of the project? • Do South Africans know what the true cost of the project is (as the number seems to vary every time the government puts a value to it)? • Given that there are accusations of improper behaviour by various officials, such as Tony Yengeni, was the deal compromised, or was there a fair process in place during the negotiations and signing of contracts? • Was there corruption and is it being dealt with, or is there a cover up? Let us consider these issues in some detail. After 1994, the newly elected democratic government set about revisiting all aspects of national life with a view to transformation appropriate to the new open democratic order that they wished to build. Like other branches of government, the Ministry of Defence initiated an open consultative process to establish a consensus about the future nature of the South African National Defence Force (SANDF). This Defence Review process is unprecedented internationally for its openness and willingness to engage with the widest possible range of opinion. All and any interested parties were invited to participate. It culminated in a Defence White Paper in 1996, the Defence Review Report in 1998, and a White THE ARMS DEAL CONTROVERSY

Economics · International trade · Law and economics · Political economy · Political science · Defense, Military, and Policy Studies

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