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.
By the fact that such combat aircraft were used to flush out terrorists last year in Marawi City is something that makes them proud where their product was used where it satisfies its customer. Alongside the price and quality that FA-50s (or any of KAI's T-50 variants) will offer, such achievements may convince other nations to purchase such products where it was tried and tested.
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.
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.
Governments of countries that is home of several defense industries with products subject for foreign use at times come up with series of rules or laws which will restrict the transactions involving military equipment in which it goes with the assurance that these assets may not fall into the hands either to the enemy posing as a threat against the country that homes several defense companies or to an unstable government operated by a tyrant that inflicts bloodshed on its citizens especially the ones that go against it (or we can say this as a human rights kind of thing). One notable example is in the case of Iran where the United Nations impose such restrictions on this country.
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.
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.
From a corporate standpoint, this definitely hurts the main stakeholders where all of those opportunities especially selling weapons on nations that are interested including those who have a problematic form of government will be gone, dwindling sales in the process. Moreover, the end-user may also get affected by these matters with reasons given as this article goes on.
THE MIDDLE EAST EXAMPLE
The notable example with regards to the balancing act between the sales of sophisticated military equipment and national armed restrictions definitely aims in this region which lies the vast resources of oil that drives the portion of the world's economy --The Middle Eastern Region.
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.
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.
Despite these "violable activities", the oil-rich nations still obtain some sophisticated weaponry ranging from tanks to fighter jets considering that selling weapons on these countries with resources like oil as a form of a business is something that will boost up sales in the defense industry, bagging financial gains from several contracts which provides profit for the defense industry.
That is definitely a thing that keeps businesses up and running folks regardless of which industry one is under, gaining a profit is something that worths the corporate operations especially the hardships of the employees working for it. To understand the nature of arms sales in the region, please provide the time allocated in reading this document provided by the Federation of American Scientists or FAS (The file format is in PDF form).
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
Throughout the years since the Revised AFP Modernization program started off, the Philippine Armed Forces is on the process purchasing military equipment, recruiting much aspiring military personnel, and improving its organizational composition which goes in line to its primary goal in 2028 as an enhanced Armed Forces with improvement in its capabilities sufficient enough for minimum credible deterrence.
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.
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.
One country on the process for such a condition is Sweden where its military arms exports increased by two percent as of last year's stats. Just to take note of the details of the article, the Philippines is considered as its latest export client where it may pertain to the SAAB Sea Giraffe sensors intended to the Philippine Navy's Del Pilar-class Frigates.
However, the Swedish government may opt for Arms Restrictions in which it may affect sales such as for the SAAB's JAS-39 Gripen multirole fighter jet (MRF) which they market across the nations that have MRF programs, including the Philippines.
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.
These things aren't gone far worse than what these two nations did especially in terms of the stiffness of arms restrictions against the Philippine Republic. These said two nations' actions and policies against arms sales are affecting the progress of the projects as well as losing the opportunity of the arms industries to bag the project and provide the tools for the armed forces to need.
The said two nations as described here refers to the countries Belgium and Canada.
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.
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.
These things provide the obstacles especially in Horizon 2 that the Philippine Army opts for light tanks intended to enhance its firepower capabilities. From the corporate perspective, this restriction keeps Walloon-based defense industries to have more opportunities like the ones for the Armed Forces where it means more market to obtain and grow. Nevertheless, the existing markets that these industries, as well as the opportunities that it obtains, will render the opportunity with the Philippines at a minimal loss.
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".
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".
As clarified, the Armed Forces of the Philippines explicates that these helicopters aren't simply suited for attack operations where it is intended more for troop support against insurgency elements in terms of immediate deployment and pulling out wounded personnel in the field as well as Humanitarian Assistance/Disaster Response (HADR) operations where relief goods are delivered on inaccessible areas as well as transport trapped or wounded civilians out from danger.
In fact, the Philippines already have a deal before with the same company about the same aircraft. This prior deal dates back to years 2014-2015 where the Philippine Air Force receives eight Bell 412 helicopters as agreed on the contract signed therein. Given these things, it hampers logistical components of the air force as well as the potentials that it entails.
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".
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".
In the case of France, the pressure of arms sales comes more from the conflict on a Middle Eastern country of Yemen in which nations such as Saudi Arabia and the United Arab Emirates receives arms imports from the United States and several European nations that produce weaponry.
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.
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.
It might as well be better to restart transactions without any political fanfare where such assets as used shall get intended to flushing insurgent threats inside the country as well as the outside ones and the suppliers gaining sales in the process. This will be a win-win for defense industries and countries with a desire of protecting their own citizens against a threatening enemy.
KNOWING THE CORPORATE CONTEXT
In terms of any business, the primary concept of operations or management especially in the manufacturing industry is that sales are needed to be pitched in terms of selling quality-based products in quantities needed depending on various projects in the sense that it really matters especially on the continuity of the production line like the ones given in the photo above about fighter jets like the F-16.
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.
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.
By that sense, these situations given provide the picture about the essence of arms sales in which a defense-industrial complex still keeps the production line open. Add to that, the additional transactions taking place means additional opportunity for these industries to enhance more sales which generate income in the process where it covers the cost of making the aircraft, the components it obtains, fixed and variable overheads, operating expense, and of course, profit for the company's growth.
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.
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.
It is ideal from a moral standpoint but considers as a dilemma in line with business ethics with regards to the military and defense-related context.
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.
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.
In the case of the buyer like the Philippines given the Canadian and Belgian restriction issues, it might as well be essential if negotiations may initiate where terms and conditions will be ironed out where a transaction may still proceed or rather, just like the supplier, will be looking for the alternative military industry which is more than willing to provide the material needed to enhance the capabilities intended to defend the nation against existing threats varying from terrorism to foreign incursion.
However, looking for alternatives may hamper logistical issues for the end-user to have, incurring the cost for spare parts as well as the operations of assets that are not in line with the doctrines of the end-user. Those things definitely hamper the capabilities of an armed force where decision-makers badly needed to consider.
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.
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.
There will be times that the former will prevail over the latter and vice versa. To sum it up, these things are set up of what is to be the reality on weapons deal where safeguards are needed to protect the innocent from harmful abuse of these tools.
And to consider the lifeline of the defense industries relying on weapons sales, it might as well be good to have the best deal on a good condition where terms are agreed, the materiel supplanted for enhancing capabilities on dealing threats and sales pitching which is in the good benefit of all parties involved.
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