Pitz Defense Analysis Note: This article isn't aiming to side anyone or anybody on the position. It only provides about the eventualities between the seller and buyer should things went favorable or unfavorable. This comes from a perspective where things in the corporate world provide and operate. Enjoy reading!
TOPIC OVERVIEW
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| A Canadian Bell 412 Combat Utility Helicopter. The Philippine Air Force has a number of those, with supposedly additional units being canceled under the grounds of so-called human rights violations even though this is intended for disaster response and counterterrorism operations. Image obtained from Philippine Air Space Blogspot |
Putting it on the corporate terms, the deals and projects taking place by the number of nations across the world especially the ones that focus on strengthening its forces against a formidable threat like a foreign incursion or terrorism is definitely the bread and butter for these companies to take wherein bagging it may mean additional credibility which in turn equates to more sales pitches in the future. Imagine a company like the Korean Aerospace Industries that produced a squadron of FA-50PH for the Philippine Air Force.
Bagging several military projects across the world is something that a defense company aspires to where the more project opportunities ended up on their favor, the better it is for the business and its operations. However, this is not always the case.
In the case of the Philippines, the recent instances of spewing rhetoric in terms of alleged human rights allegations and other concerning things within the present administration put several future transactions for military equipment into risk such as the Bell 412 deal between the Philippines and Canada where the latter's key government officials like the International Trade Minister Francois-Philippe Champagne together with Foreign Minister Chrystia Freeland opts to review the said deal and blocked it if given grounds are suitable enough to implement it. Add to this is the Canadian Prime Minister Justin Trudeau mentioned that they are looking into the way Canadian-made equipment is being used by its end users.
This kind of scenario, especially the arms restrictions part, is something that is considered a balancing act between nationalistic/moralistic principles against economic benefits, profitability, and sales where defense companies somewhat stand in between these extremes. It is somewhat upholding their home nation's prevailing laws against their very business perspectives in which the lives of the industry's employees lie at stake.
THE MIDDLE EAST EXAMPLE
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| The Royal Saudi Navy Al Riyadh-class Frigate. From Pakistani Defence Forum |
Oil-rich nations such as Saudi Arabia, Oman, United Arab Emirates, Qatar, Bahrain, and several others are purchasing arms for its respective armed forces. A number of these oil-exporting countries are also considered as Human Rights violators where several weapons exporters like the United States are restricting the transactions or otherwise have such obstacles loosen up. In the details, the recent conflict in Yemen where both the United States and the United Kingdom still provide weapons to Saudi Arabia where it impacts the lives of civilians in the battle zone, mounting casualties among them.
With the Middle Eastern example come at play, the fight between arms restrictions and arms sales is obvious enough to consider in a sense that in an observation, foreign policy at times come at play with military sales of weaponry. This provides the knowledge that may come helpful when it comes to the Philippine Context.
THE PHILIPPINE CONTEXT
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| The Swedish Government is keen for arms restrictions in which it may affect deals such as the Multirole fighter project for the Philippine Air Force. |
Since the Duterte Administration started last 2016, several weapons-exporting nations are either expressing concerns on the so-called "human rights violations" deserving for an arms restriction. This comes in line that conditions are applied with regards to weapons purchase which depends on the variations of laws such a nation processes.
The case of Sweden is still minimal and may still get change considering that the law on arms restrictions or rules per se against non-democratic and human rights violators are still on the process of approval.
Belgium
Belgium is a country in Europe where the capital city is situated in Brussels. This city is also where the main headquarters of the European Union (EU) is situated. Even though the present administration and the EU are not in good terms one after the other, the percussions aren't keen too much between Brussels and Manila in EU terms even in the Belgian National Level.
As a matter of fact, the main obstacle to the whole arms restrictions debacle lies in the hands-on the French-speaking Walloon Regional Government. To provide some idea folks, Belgium has three regions composing its National Territory. To the north, there is the Dutch-speaking Flemish Region, on the center, there is the Brussels-Capital Region and to the South, there is the French-speaking Walloon National Government which as presumed several military and defense industrial complexes are situated including the company named CMI Defense which is the provider of gun turrets intended for light or medium tanks such as Turkey's Otokar Tulpar and Indonesia's Kaplan tank.
It might as well be good with regards to this issue if terms and conditions are to be discussed by both sides so as it will provide the win-win solution where parties involved will benefit.
Canada
Lying in the northern borders of the United States, this is a country which is considered as the second-largest nation in terms of territorial size on the whole world, after the Russian Federation. It is also home to a proportionate number of Filipino-born citizens who decided to either work in this country with several others eventually settle down.
Aside from these aforementioned facts that describe Canada, this country went abuzz across Philippine Defense Platforms as well as in both mainstream and social media outlets when its government in Ottawa decided to "review" the transactions involving Bell 412 Combat Utility Helicopters intended for the Philippine Air Force under the grounds of so-called "human rights atrocities".
In the case of corporate culture, this comes with questionable reliability of the supplier in terms of having a deal where both sides are on the losing end with the so-called "upholding principles" of arms regulations with political and human rights as a measurement for eligible transaction-doing. This is an opportunity for sales pitch lost in the process as the Philippine Government canceled the deal and it prompts the Canadian Government in Ottawa to have its defense-oriented company Crown Corporation to be less reliant on arms sales.
Potential Others
Aside from Belgium (thru Wallonia Regional Government) and Canada, nations such as Sweden as well as France are on the pressure in their respective governments to set up guidelines with regards to arms sales wherein it is detrimental for arms restrictions.
This comes as key coalition groups and some key people in their respective governments are worried that it may be used on violence in the same way as Canada and Belgium did on the Philippines on the premise of so-called "human rights violations".
So far as these things are concerned, the arms restrictions aren't inflicting that much damage on both sides that much yet where negotiations may still take place for the better considering that the Armed Forces and its personnel have its hands off the issue and will uphold human rights as intended.
KNOWING THE CORPORATE CONTEXT
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| The production line for F-16 Fighter jets. Courtesy of the Drive. |
As long as deals are still rolling such as this one between Bahrain and Lockheed Martin, jobs are still provided to the people especially the ones that cater military assets to the ones that need it in exchange for cash stipulated in the contract. In case we wonder, the United States dropped the conditions needed for arms sales about this Middle Eastern Nation in which allows the transactions that keep the F-16 line open.
Arms restrictions, in this case, hamper the opportunity these companies may have in terms of arms sales. However, given the laws a nation has for arms sales and the conditions needed to meet up, there is something that defense companies shall comply as a safeguard that weapons shall not fall into the wrong hands.
CONCLUSION
The two extremes - the sale of military equipment that rockets sales and the income along with it versus arms restrictions where conditions shall be met for a legitimate transaction are the forces, opposite on each other where it pulls the decision-makers and stakeholders of a defense industry to make a decision as well as providing ideas where a resolution of both sides needs to be met to the profitability of a company as well as compliance with the laws enacted in a country in the same way as any businesses will do.
As for the supplier (the defense industry), the scenario will be this - either pursuing the government to resume transactions through lobbying or looking for alternatives such as other markets that may need such equipment with the eligibility to make out a deal.
Hence, with these circumstances playing on weapons sales and the risk of not falling into the wrong hands, the clash of arguments between the pragmatic essence of obtaining opportunities against the principles of several supplier nations applied on their respective laws with conditions that are needed to have a legitimate deal will continue through a time where both points are needed to consider in terms to have a nice reputation especially on defense companies that aspires in the same way as any business organization will do.
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