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South Africa
Keywords: military expenditure, South Africa, corruption, budgetary decision making
*Geoff Harris is Professor of Economics and Director of the Conflict Resolution & Peace Studies Programme at the University of KwaZulu-Natal, Durban. This article is one output from a project on military expenditure in southern Africa funded by the South African National Research Foundation. It was presented at the International Peace Research Association's 2008 Global Conference, held at the University of Leuven in Belgium.
What drives military expenditure? A South African study
Two facts point to the need to better understand military expenditure allocations in developing countries. The first is that the number and intensity of armed conflicts worldwide have fallen consistently and significantly since 1990 and in sub-Saharan Africa since 1999. World military expenditure fell in real terms during the 1990s but has increased since 1999 and South Africa's milex has mirrored these movements. The second is that studies which have attempted to explain milex using standard economic techniques typically explain only about half of the differences between countries. However, some potentially influential variables are not amenable, to regression analysis and this artjcle employs additional data drawn from interviews with key informants and secondary sources. It finds that the procedures used to decide on the level and composition of South Africa's milex are clearly formulated, transparent and are adhered to with respect to recurrent expenditures. However, recent military procurement history reveals increasing Cabinet authoritarianism, a lack of transparency, significant opportunities for corruption and, arguably, inappropriate decisions.
Introduction
It is not yet widely recognized that the nature and intensity of armed conflicts worldwide has decreased significantly since 1990. Using the datasets of the Uppsala Conflict Data Program (UCDP), the Human Security Centre (2005, p. 22) reported that there were 40 per cent fewer armed conflicts in 2003 than in 1992. At the beginning of 2002, there were a total of 68 armed conflicts worldwide but this had fallen to 56 by the end of 2006 (Human Security Report Project 2007, p. 7), very largely as a consequence of a fall in the number of armed conflicts in sub-Saharan Africa (SSA) - from 39 during 2002 to 19 in 2006.
Compendia of armed conflicts, including the Stockholm International Peace Research Institute (SIPRI), have until very recently focused on state-based armed conflicts i.e. those involving a state and one or more non-state armed group; worldwide, these remained constant between 2002 and 2006 but fell in SSA from 13 to seven (see Table 1). Even more dramatic was the decline in the number of battle deaths in the' region, from 99,000 in 1999 to 4, 741 in 2002 to 1,851 in 2005, the lowest number in 45 years (Human Security Report Project 2007, p. 23) although UCDP methodology means that these are probably under estimates.
At the behest of the Human Security Centre, the UCDP now measures two other types of armed conflict - non-state armed conflict and one-sided violence. The former are wars fought between militias, clans, warlords or communal groups
without any government involvement. While these rival state-based armed conflicts in number (see Table 1), they tend to be short in duration and result in far fewer battle deaths. In 2002, almost three quarters of non-state armed conflicts occurred in SSA but these fell from 26 to 12 by 2006 and the proportion to half the world total. Battle deaths from non-state armed conflicts in SSA fell from 4,400 in 2002 to just over 1,300 in 2006 (Human Security Report Project 2007, p. 24). One-sided violence involves intentional attacks against civilians and typically occur in association with state-based armed conflicts. The numbers killed are relatively small but the numbers of such campaigns has increased steadily since 1989. SSA had 143 campaigns between 1989 and 2006 (Human Security Centre 2006, pp. 12-13), and even without the huge death toll in Rwanda in 1994 had far more deaths than any other region; since 1994, however, there has been a significant reduction in these types of violence. Taken as a whole, these data show that SSA is 'dramatically more secure than it was less than 10 years ago' (Human Security Report Project 2007, p. 22).
The 2005 Report (part V) made a preliminary attempt to explain these reductions and emphasized the greater willingness of the international community to intervene in the 1990s using sanctions, economic conditionality instruments and military interventions. The 2007 Brief specifically examined the experience of SSA and concluded that the remarkable increase in 'international activism' in a range of peacemaking and post-conflict peacebuilding initiatives was the basic explanation for the reduced levels of violence. In a similar vein, Bailes (2006,
p.14) identifies the willingness of states to be active rather than restrained in security matters elsewhere as a major change in security practice during the 1990s. The most obvious indication of this, she notes, is the increasing number of outside interventions in conflicts, especially in the latter half of the decade. These interventions were concentrated in Africa. Wiharta's review of peace missions in Africa between 1991 and 2005 reports that, by the end of 2005, 75 per cent of the UN peace mission budget was committed to the continent (2006, p.145).
What happened to milex in SSA in the face of this vastly improved security situation? Table 2 reports the most recent 10 year series from SIPRI (2007) which shows that SSA milex has edged up in real terms between 1999 and 2006. This has been almost entirely due to the 59 per cent increase in milex over this period by South Africa, which contributed 40 per cent of the region's milex in 2006 (Angola was the next highest, with 19 per cent). Without South Africa, SSA's milex was stable over the decade.
Two other preliminary points need to be made. First, expenditure on weaponry is only a small part of milex. Omitoogun's (2003) study of six African countries, for example, shows that recurrent expenditures (largely personnel costs) average close to 90 per cent of total milex. Weapons purchases fall under capital or development expenditure, a category which also includes military construction and sometimes operation and maintenance expenditures. The small amounts left
for weapons purchases explain why a number of countries finance these by off budget and extra budgetary sources.
Second, milex is an input to military capability and is not synonomous with it. As Hagelin and Skons (2003, p. 283) point out, military strength depends on at least four other factors:
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The balance between the different expenditure categories within the defence budget, especially personnel and weaponry
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Cost factors or value for money, which depends on recruitment practices (volunteers or conscripts) and method of arms acquisition (local production or imports)
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Level of training and technology
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The relevance of defence policies, doctrines and strategies and the extent these are put into practice.
If, as conventional wisdom ha's it, the presence or expectation of war provides the main impetus for milex, and the nature and intensity of wars are decreasing, why is milex not decreasing? I had originally intended to attempt to answer this question for the SSA as a whole but the dominance of South Africa in the region's milex, the rapid growth of its milex since 1999 and the relative stability of milex elsewhere in SSA made it appropriate to give South Africa most attention.
Previous research
Economists first began to examine military expenditure in developing countries following Emile Benoit's (1973; 1978) investigation of the relationship between military expenditure and economic growth. In addition to increasingly sophisticated econometric studies of this relationship during the 1980s (for reviews of this research, see Deger, 1992 and Dunne, 1996), there were studies of the determinants of military expenditure (reviewed by West, 1992). The main determinants identified by these studies were as follows:
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The past. In short, the best predictor of a country's milex in any year is its level in the previous year, as demonstrated by longitudinal studies.
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Geo-strategic considerations. A country's involvement in armed conflict or the perceived likelihood of such involvement is a major determinant of its milex.
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Financial and economic factors. These determine a country's ability to allocate resources to the military.
Cross sectional studies for developing countries, dating from Maizels and Nissanke (1986), Hewitt (1991) and Dunne and Mohammed (1995), found R squared values of around 0.50, while time series models (e.g. Dunne and Pe rlo Freeman 2003a; 2003b) found values between 0.80 and 0.90. Recent studies of the determinants of milex in sub-Saharan Africa include cross sectional (Steenkamp 2009) and longitudinal (Batchelor et al 2002; Tambudzai 2006) studies and produced similar R-squared figures. The main determinants tested
by these studies were strategic and economic factors - which provide motive and opportunity - and, in the case of longitudinal studies, milex in previous years. The two longitudinal studies - for South Africa and Zimbabwe respectively found geo-strategic variables to be more important determinants of milex than economic factors.
However, the multiple regression approach does not include some potentially important underlying determinants of milex, which cannot be readily expressed in numerical terms and which therefore are normally excluded from studies based on regression analysis. These include:
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The quest for national prestige and status and a belief that a strong military is a necessary aspect of this quest
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A desire to fulfill international responsibilities e.g. by providing peacekeeping forces
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A belief that a strong rnjlitary is necessary for security
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The military pressure group, which includes the military, related politicians and public servants and arms suppliers, both domestic and foreign
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The budget process and the extent to which the military is more able to secure budget allocations than other ministries.
The remainder of this article reports an attempt to assess the importance of such factors.
Research methods
In an attempt to establish the importance of factors such as those mentioned above, eight research questions were devised:
1. What are the most important factors used to justify South Africa's level of military expenditure? In your opinion, how valid are they?
2. What do you think are the underlying factors which determine the level and trend of South Africa's military expenditure?
3. To what extent do you think the military is or should be a special case which should get most of what it wants in terms of budgetary resources? 4. Are you familiar with the budgetary decision-making process? To what extent are 'the rules' being followed with respect to military expenditure?
5. Is there any sense within Cabinet of trade-ofts between milex and other government expenditure categories or is each a separate decision?
6. To what extent do 'pressure groups influence South Africa's milex decisions? Do you have any illustrations of their actions?
7. To what extent do beliefs or attitudes held by South Africans influence the country's level of military expenditure?
8. To what extent do you think that pressures from outside South Africa influence its level of military expenditure?
A total of 22 key informants were identified as possessing specialist knowledge of the milex. These were drawn from academia (5), organizations specialising in security sector research and policy (5), members of parliament (3), public servants (3), journalists (2) and other NGOs (4). Early in May 2008, the eight questions were sent to each potential informant, together with a short background to the project, with the invitation to answer any or all of the questions in as much detail as they wished. Replies were received from ten informants, of whom four came from academia, three from organizations specializing in security sector research and three from other NGOs. The responses suggest that the informants cover the full spectrum of attitudes towards the military.
Data from key informants
Three major themes emerged from the responses. Strikingly divergent responses were received on each theme although individual respondents did not always follow a predictable line. Comments in brackets in this section are attempts to clarify or provide a context for respondents' comments.
1. Justification of milex (questions 1 and 2)
I had expected that a distinction might be made between the arguments used to justify high or increasing milex levels (question 1) and underlying reasons which might not be so openly stated or even understood. This happened only to a limited extent. Almost all of the respondents mentioned the need for South Africa, as the regional power, to contribute significantly to peacekeeping operations
elsewhere in the continent. One respondent mentioned the goal of a permanent seat in a reformed UN Security Council as a significant motive for this involvement. (In May, 2008, the SANDF had around 2 600 personnel on Africa Union (AU)/UN peacekeeping operations - 900 in Burundi, 1350 in the DRC, 38 in Cote d'lvoire and 318 in Sudan. The country also has a commitment to the southern brigade of the Africa Standby Force currently being formed to carry out AU peacekeeping functions).
One respondent mentioned the logical foundation provided by the Defence White Paper of 1996 and the Defence Review of 1998 for subsequent milex decisions, while two emphasised that the essential argument of the White Paper was that the real security issues facing the country (poverty, inequality and the like) in fact needed non-military solutions. The trade-offs between traditional security and human security needs, they argued, needed constant monitoring. One stated that in the face of threats to human security, particularly HIV and AIDS, the country's milex was 'grossly excessive'."Another documented the experience that South Africa's armed forces historically have been run down after wars to such an extent that when they have next been called on they have been ill-equipped and ill-trained.
One respondent mentioned widely-accepted underlying beliefs, namely 'the myth of the effectiveness of military defence and the glory of war which run deep in South African culture' and 'the association of militarism with notions of
patriotism'. This respondent also commented that 'the constitution was informed by militaristic perspectives of history and the state. A demilitarized perspective ... [would largely replace the military with] civilian-based defence'.
2. The budget decision-making process (questions 4 and 5)
Two responses, both strongly held, emerged under this theme. The majority of respondents believed that the country has comprehensive rules and procedures regarding budget allocations and that these are generally closely followed. One commented that 'On average, the SA defence debate is probably one of the most transparent and participative in the world and certainly shames countries such as the US'. (The milex decision making processes, which are guided by the Public Finance Management Act of 1999, are carefully explained by Le Roux, 2006; the provisions for parliamentary oversight are explained in Ngculu, 2003).
Without arguing against the above, four respondents pointed to recent weapons procurement decisions made' by Cabinet with little or no co'nsultation or transparency. (These comprise the Strategic Defence Procurement Package of fighter aircraft, helicopters, submarines and patrol corvettes [the 'arms deal'] in 1998, financed by loans from European commercial banks [on which see Taljaard, 2006], the commitment to purchase eight Airbus A400M military transport aircraft in 2005 and the ordering of 264 infantry combat vehicles in 2006). In the words of one, 'I think that what we are witnessing in recent years, and not just in military expenditure decisions but in government as a whole, is a
growing secretiveness linked to a growing authoritarianism and lack of proper consultation ... [With respect to the arms deal] it is clear to me that "the rules" have been flouted in many respects'. A related comment was 'that the very size of recent arms procurements has meant that they are being made by Cabinet and without open discussion, even by the Portfolio Committee on Defence. They are an open doorway to corruption'. (The chair of parliament's Joint Standing Committee on Defence during the arms deal negotiations, Tony Yengeni, and financial advisor to the former Deputy President, Schabir Shaik, were jailed for offences related to bribery over the arms deal; the former Deputy President, Jacob Zuma, has been exonerated under controversial circumstances from similar charges).
3. The influence of pressure groups (questions 6, 7 and 8)
Three pressure groups were identified. The military itself was viewed as well organized and efficient in producing its budget submissions and in actually spending the finances it has 'been allocated, by comparison wit~ some other government departments. To one respondent, 'The military themselves are probably the only major pressure group [and are] very good at portraying themselves as a special case' [in terms of funding].
Arms producing companies, particularly the government-owned Denel, were seen as exerting an indirect influence through the belief that the technological expertise they embody must be retained in the country. (This view is strongly
promoted by the Minister of Trade and Industry, who recently argued that ' ... Denel is a strategic asset through its role as custodian of the country's technological capabilities, and as a driver for skills development in the engineering and high-technology disciplines (Erwin, 2008, p. 32)). One informant noted that 'the interests of the military-industrial complex and its traditional access to the corridors of power' meant that the arms procurement by the military was likely to have an easier path than the purchase of capital items for other departments. Several respondents reported that weaponry of an unnecessarily high complexity and high cost was ordered out of a concern to support the heavily-subsidised arms manufacturer Denel rather than the needs of the SANDF. The Airbus A400M and infantry combat vehicle orders, for which Denel will manufacture components, were decided by cabinet without a tendering process or reference to parliament's Joint Standing Committee of Defence. One respondent referred to anti-military NGOs from within and outside the country as exerting influence although one respondent from this sector stated that 'I don't believe we have had any material influence'.
Four conclusions can be drawn from these responses. First, it is noteworthy that no respondent mentioned any security threat to South Africa or the fact of dramatic falls in the number and intensity of armed conflicts in SSA since 1999. If they had, however, they may well have attributed the latter, at least in part, to the effectiveness of South Africa's and other countries' peacekeeping involvements.
Second, most respondents mentioned the expectation that South Africa, as the
regional power, should play a significant proactive peacemaking, peacekeeping
and peacebuilding role in the continent. In her review of recent security thinking,
Bailes (2006, p.15) comments that 'the virtuous state today is both expected to
rearm itself for the active collaborative export of security and offered chances to
improve its arsenal precisely as a reward for its virtue'. She attributes this
concept to an 'essentially Western-inspired process'. Third, most respondents
believed that recent weapons procurement decisions had been made by Cabinet
with very little transparency and that this opened the way for corruption. Fourth,
almost all of the respondents assumed without question that a strong military is
both necessary and is effective in building security.
Data from secondary sources
The above evidence can be supplemented by four recent books, two on milex in
Africa and two on South Africa, both with particular reference to the arms deal.
Omitoogun (2003) reviewed the availability and reliability of milex data for six
African countries (Cameroon, Ethiopia, Ghana, Kenya, Nigeria and Uganda).
He found that reliability varied across countries for two reasons - a lack of
capacity to compile the data and an insistence by some foreign aid donors on
limits to milex which has provided a motivation to obscure its true levels,
including the use of off-budget and extra-budgetary expenditures. From the
evidence above, this has not happened in South Africa. The volume edited by
Omitoogun and Hutchful (2006) examines military budgeting practices in eight African countries, including the chapter on South Africa by Le Roux. South Africa was the only country of the eight to be given a very high rating in terms of adherence to the principles of public sector management as identified by Ball and Le Roux (2006). However, Le Roux identifies a major weakness in the use of the Special Defence Account to purchase weapons. In his words (2006, p. 222):
... allegations of irregularities and corruption have dogged the Strategic Defence Procurement Package [the arms deal]. First, in 2000 the Auditor-General revealed that, because of hidden costs, the programme was going to cost much more than the amount approved by Parliament, which shows that the legislators did not consider the overall cost (Including the likely effect of inflation) of the programme to the country, Second, corruption charges have been levelled against high-ranking officials of the state involved in the negotiation of'the arms deals.
As Omitoogun (2006, p. 249) records in his overview, the result of poor arms procurement procedures is the overpricing of military hardware because of kickbacks and the purchase of inappropriate weapons. As examples, he cites the purchase of helicopters for the Ugandan military (1998), the planned purchase of radar systems from BAE Systems for the Tanzanian air force (2002) and the plans to purchase aircraft from the Czech Republic for the Kenyan Air Force
(2003). Some would add the South African arms deal of 1998 to that list.
Two books written for wider reading tackle the arms deal from very critical perspectives. Crawford-Browne pays particular attention to its financing by loans from European commercial banks (2007, pp. 165-183). In his view, while the Minister of Finance is empowered to borrow foreign currency where this can be repaid by the income generated as a result of the loans, the loans to purchase arms are 'long-term national liabilities for transactions that produce no income' (2007, p. 184). He refers to the government's own affordability studies which highlighted the risks involved in such large borrowings (2007, pp. 171-173). He is particularly critical of the faith put in offset arrangements of various kinds under which the arms supplying companies are supposed to invest in productive activity in South Africa. Feinstein (2007), a former African National Congress (ANC) parliamentarian, documents the progressive move by the cabinet to by-pass or dominate parliament in respect of public expenditure decisions. In his view, the cabinet has undermined the parliamentary system and the legislation which was designed to hold the cabinet accountable to the legislature. Cabinet's attempts to influence or suppress investigations into the arms deal by its own agencies is part of this process (2007, pp. 154-207). He also details (2007, pp. 208-236) evidence pointing to the extensive bribery of officials involved in the arms deal by foreign arms companies, as well as to financial support to the ANC by these companies which funded its 1999 election campaign (2007, p. 177).
Conclusion
Most studies of the determinants of milex have relied on econometric analysis which has been able to provide only a partial explanation. The alternative research method used in this study has added more insights for the case of South Africa. Overall, the decisions concerning the size and composition of current milex are transparent and consistent with well-formulated public expenditure procedures. On the other hand, weapons purchases are being made by cabinet with little or no regard for these procedures. This, it appears, is part of a general move towards the centralisation of decision-making and to less accountability to parliament. It is linked to a high degree of faith in offset arrangements and a determination to maintain the government-owned arms producer. In addition, there is evidence of extensive bribery and corruption.
It is obviously important that policymakers become aware of the changed security environment. While the emphasis on the country's peacekeeping responsibilities suggests that the lack of threats facing South Africa is understood, the decline in the extent and intensity of wars in SSA is not. To emphasise the point, during the 1990s, for the first time since 1945, more wars ended by a negotiated settlement (42) than by military victory (23). It is true that the former were more likely to re-occur than the latter (2006, pp. 5, 21), but 24 out of 42 negotiated settlements succeeded in that five years had passed without a recommencement of fighting. Negotiation, possibly supported by peacekeeping forces, is effective.
The military, it should be noted, does not have a particularly impressive record in
building peace. Pei and Kasper (2003) studied the 16 'forced regime changes' in
which significant numbers of US ground troops were involved in the 20th century.
These were designed either to prevent a regime collapse or to bring about a
regime change. Of the 16, four were judged to be a success in terms of the
establishment of a democracy ten years or more after the US withdrawal, namely
Germany, Japan, Grenada and Panama. In a related study, Dobbins (2003)
examined six major nation-building operations since 1990 in which US military
forces helped effect a transition to democracy. Of the six, two (Somalia and Haiti)
were clear failures, while the outcome in Bosnia, Kosovo, Afghanistan and Iraq is
still pending, but hardly look promising. Any rational approach to building peace
will include a careful consideration of non-military means of securing sustainable
peace following armed conflict.
Finally, it is important to emphasise that prevention of armed is far, far less costly
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than cure (see Fischer, 2004):" Given their cost effectiveness, the various non-
military methods of peacebuilding deserve far more emphasis and resourcing
than they receive at present (on which, see Harris, 2004; 2008).
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