Home Global News What's Behind Australia's Bid To Become A Top Arms Exporter?

What's Behind Australia's Bid To Become A Top Arms Exporter?

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As last month came to a close, Australian Prime Minister Malcolm Turnbull announced ambitions to become one of the world’s top 10 military equipment exporters.

Presently ranking 20th in terms of arms dealing capability, the government’s plan — which comes with an AU$3.8 billion ($3 billion) dollar price tag — is projected to raise Australia’s current AU$1.5 billion defence industry export, (a paltry 3.3% of the global total), to AU$2.5 billion ($1.97 billion).

Put simply, Australia aims to nearly double its profits in a competitive market ruled by a league of successful large arms exporters — such as the U.S, Russia, China, and France — whose capabilities markedly supersede Australia’s.

The plan may appear idealistic and overly ambitious. However, when one takes into account the state’s alliances, geographical positioning, and desire to become an innovations state, one must ask, does Australia really have a choice?

The answer, a rude awakening to those who once idealized Australia as a pristine example of gun control, is a resounding “no.”

Here are two poignant factors which have led Australia to join the great arms race and reposition itself, from ally and confidante, to a major large arms dealer.

Australia as an Innovator

As claimed by Prime Minister Turnbull, increasing Australia’s military export capabilities would manifest into “more 21st-century, more advanced, technological jobs here in Australia.”

This statement, hyperbolic as it may be in nature, comes at a much-needed time when Australia’s economy is experiencing what can only be described as an identity crisis.

Australia was once long acquainted with booms associated with manufacturing and production. As a result, the country has enjoyed a honeymoon period of prosperity which lasted throughout the close of the 20th century, the turn of the millennium, and onwards. In particular, the production of coal and iron ore, which, due to global commodity price hikes, added an estimated 13% to the country’s national income in 2013. As the fourth-highest coal producer in the world, Australia was even saved from the scourge of the Global Financial Crisis.

 

Mining saved Australia from the GFC. Photo by: William West/AFP/Getty Images).

However, the global demand for iron ore and coal waned, and by 2016, the honeymoon phase was well and truly over. This is especially apparent in real estate prices. Residential homes in Australia’s once-booming mining towns which had previously commanded million dollar price tags now struggle to sell at bargain basement prices.

The mining bust was juxtaposed against a depleted manufacturing sector which, left nearly to its own devices, remained malnourished. Complimented by globalization’s impact on offshore manufacturing and high domestic wages, Australia’s manufacturing sector paled against the gleam of the mining boom. Output, along with employment in this sector, has fallen steadily for the past three decades.

Now, the Australian government has to make a choice — curl up or deviate from tradition.

“There has been a major shift in the global business model that underlies manufacturing,” writes Tim Mazzarol, President of the Small Enterprise Association of Australia and New Zealand (SEAANZ). “This is a shift from control over stocks of knowledge and assets, to the ability to tap into global flows of knowledge and intellectual capital.”

That is, ideas and technology are the new currencies. Yet, despite concerted efforts to increase innovation in Australia — including an AU$1.1 billion ($870 million) innovation fund, and an effort to boost Australia’s science innovation by 2030 – the results haven’t been encouraging, with reports indicating that the effort, while timely, lacked substance. Now, it appears the government has shifted focus, turning its eye to the export of arms.

Australia as an ally

Aside from the fact that there are clearly vast profit margins to be found in military exports, there is another key motivator for the decision to ramp up Australia’s military export capabilities. According to Defense Industry Minister Christopher Pyne, weapons sales could further “cement relationships” with Australia’s existing allies — the U.S., UK, Canada and New Zealand.

These post-World War II relationships were forged through a collective need and treaties such as ANZUS – a collective security agreement which binds signatory states, such as New Zealand and the U.S., to cooperate with Australia during military efforts in the Pacific Rim.

Australia has also engaged in several military efforts with the Allies throughout the Cold War, The Vietnam War, and the more recent War on Terror, which has seen Australian troops arrive in Afghanistan and Iraq.

However, as the globe faces heightened levels of insecurity, Australia’s aspirations — shaped under similar circumstances to those that guided the articles of ANZUS in 1951—  is to become an indispensable ally. To do so, the government must value add.

Clearly, in today’s volatile security state, providing state-of-the-art military technology is a means to an end. And so, through an analysis of country’s war effort, it almost becomes logical that Australia would invest in ramping up its military equipment exports.

Australia under question

The announcement that Australia desires to become one of the world’s top 10 military equipment exporters has meaning that stretches beyond profit. Rather, the government aims to win back its ability to replenish its economy, and to secure its ties with allies during a period of insecurity.

Whether or not Australia will succeed in securing its position as a top arms dealer, in a competitive market, remains a question.

This article was written by Milly Stilinovic from Forbes and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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