By Giovanni de Briganti
PARIS --- Britain and France both are reorganizing the way they export weapons, and both have decided to take primary responsibility away from their respective defense ministries. Are they right to do so?
The British government will disband, on April 1, the Defence Export Services Organisation (DESO), a small agency within the Ministry of Defence which has primary responsibility for marketing British weapons abroad. This responsibility, under a plan announced Dec. 11, 2007, will now move, along with much of DESO, to UK Trade and Investment, the British government’s civilian export development organization.
France is shifting responsibility for arms exports away from the international development directorate (DDI) of the defense procurement agency, DGA, where it has resided for decades. A first step was taken in early 2007 when, for the first time in living memory, a civilian was appointed to head DDI, a position traditionally held by a general officer of DGA’s own procurement corps, the Corps des Ingénieurs de l’Armement.
A more significant step followed on Oct. 1, 2007, when a new, Inter-ministerial Committee for Defense and Security Exports was set up to coordinate arms export promotion between government departments, and to implement the government’s new strategic plan for defense exports.
Tellingly, it is chaired by the chief of staff of Prime Minister François Fillon, a civilian. This marks a bureaucratic defeat for the defense ministry because, as this new committee will also set marketing priorities and issue marketing licenses to industry, it will take effective control of arms exports.
Further changes are to be unveiled during the spring, but it is already clear that, even if Defense Minister Hervé Morin expects to continue as the country’s “top travelling salesman,” the Ministry of Defence and DGA will play a smaller role than in the past.
It is too early to judge whether these changes will be effective in reversing the decline in French arms exports, which, according to the defense ministry's own statistics, have stagnated since 2000 at around 4.4 billion euros per year, although they jumped to 5.7 billion euros in 2006. Deliveries have averaged 4.5 billion per year since 2000, save for a spike at 7.4 billion in 2004.
French industry has not, to date, taken a public position on this shift but, as it has long been dissatisfied with DGA’s efforts, it is willing to embrace any change that promises to deliver better results.
British industry has been more forthcoming in its criticism. In Nov. 21 hearings before Parliament’s Defence Committee, Ian Godden, Secretary of the Defence Industries Council and Chief Executive Officer of the Society of British Aerospace Companies (SBAC), said he was “disappointed” by the decision to disband DESO. Industry needs “strong leadership of a separate unit within UKTI, and a continued commitment by the Ministry of Defence, tough as that may be within the budget cuts, to the support of defence exports, he said. “Those are the two key points.”
Strong political leadership and a strong commitment by the military services are, in fact, the very pillars on which the United States has built and retained its position as the world’s most successful arms exporter. In the US system, civilian agencies play no significant role, except for some support that the Commerce Dept. provides to SMEs.
The US military, as users of the equipment, by definition enjoy high credibility with foreign military buyers, and moreover speak the same language. Top US political leaders can exert political pressure and propose alliances, creating a favorable context for arms sales. Civilian departments have little to bring to the table, just as they play almost no role on the buyer’s side.
US arms exports rely to a great degree on the Foreign Military Sales (FMS) program, through which most equipment already in US service is exported. Marketing is shared between industry and the Pentagon; equipment is bought by the relevant US service, and produced by industry for re-sale, free transfer or financing by the Pentagon’s Defense Cooperation and Security Agency. In the case of direct commercial sales, industry signs contracts and supplies the equipment with marketing and political support from the Pentagon, which for example exhibits weapons at foreign trade shows at its own cost.
This coordinated action by DSCA, the armed forces and industry, under the political umbrella provided by the political leadership, is generally enough to overwhelm competitors. Its effectiveness was recently demonstrated in India, where US suppliers were able to quickly establish a foothold - and are now competing for several large orders - even though they were shut out of the market for decades.
And it was again demonstrated last year, when the United States were able to persuade Morocco to reverse its decision to buy French Rafale fighters and instead buy US-made F-16s, even though these are less capable but almost as expensive once their weapons are priced in.
By opting to give foreign trade mavens a leading role in arms exports, while downgrading the role played by the Ministry of Defence, Britain is acting as if weapons were capital goods like any other, to be sold in the same way. This is plainly not the case.
Sidelining MoD may be partly justified by Britain’s need to clean up its act after well-publicized arms scandals involving BAE Systems, in Saudi Arabia and elsewhere. This much can be inferred from the government’s Dec. 11 statement, which notes that “the transfer of functions to UKTI….emphasises our continuing commitment to the highest business standards, and to the appropriate clarity and transparency. The new organisation will seek to assist the defence industry to become more accountable, demonstrably supporting good governance through an industry code, setting out common standards of good business practice.”
In France’s case the goal is to reverse the recent decline in arms exports, and to regain the country’s long-standing position as the world’s third or fourth arms exporter.
Whatever their reasons, Britain and France are gambling that civil servants can be more effective arms salesmen than their military. Experience clearly suggests otherwise but, after all, the proof of the pudding is in the eating.