Current Affairs Czech arms exporters doing good business
After several lean years Czech arms exporters are once again doing good business. According to the Defense and Security Industry Association 2014 brought a 47 percent increase in arms exports. Czech firms found buyers around the world, selling arms to the tune of 11.5 billion crowns. Exports to countries in North Africa and the Middle East saw a 100 percent increase that year. I asked Dušan Švarc of the Defense and Security Industry Association to comment on the significance of this increase for the arms industry.
“Well, the significant rise in “arms” exports is a relative term because we exported mostly non-combat equipment which is registered as “military goods” for the licensing needed from the Ministry of Trade and Industry and other institutions. In reality, the bulk of these exports was not deadly weapons but trucks and spare parts for aircraft.”
So what countries are we exporting to most?
“Number one was Saudi Arabia, second Germany, the United States, Algeria, Slovenia and some other European countries. If I were to divide it by regions –then 30 percent was to the EU, 27 percent to the Middle East, Asia 14 percent, Africa 10, and the US around 8 percent.”
To what do you ascribe the increase in arms exports?
“The increase was fueled by the (political) crises in certain regions as well as the global economic crisis in 2008-2009. Military depos were empty because governments usually first cut defense budgets and now there is a period of recovery and time to buy ammunition and spare parts etc. And the Czech specificity is spare parts for aircraft because we were a strong producer of aircraft. And sometimes you have good deals and then you have to wait for a couple of years for another good sales opportunity. Last year was specific in that it was a good year for trucks. Trucks made up 73 percent of the overall volume of exports to Saudi Arabia in 2014.”
The Czech Republic has strong economic rivals in the region –Britain, the US and so on – to what do you attribute this success on the part of Czech firms?
“I would say quality, tradition and, of course, the situation in the given country, because some countries want to diversify their portfolio and they look for another supplier – so that is also a possible reason.”
There are predictions of a further increase in exports in 2015 to around 14 billion crowns. Do you see that as realistic?
“It will depend, because in the defense industry you can never be sure what will happen. Our customers are mostly governments and political situations change, governments change ….it is a very volatile market, not like in the civilian industry, so we will have to wait and see.”
Do you feel that this trend is bringing the Czech Republic back to being a significant arms exporter?
“I am not so sure, because when you look at the amount of arms exports –really arms in the proper sense of the word– then the increase was not great. We produce mostly electronic stuff –trucks, engines for aircraft, trainers – there we are strong - and then, of course, small arms. I have to say that 2014 was a very good year for ammunition factories.”
And where is that being exported to?
“Small ammunition is selling all over the world because there was a strong demand after the economic crisis in 2008 and the years following, so they are exporting all over the world - where there is demand and where the ministry of Foreign Affairs and the state authorities allow us to sell of course.”