The australian naval institute


Figure 1. INDUSTRIALISATION VS IMPORTATION OF



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Figure 1.

INDUSTRIALISATION VS IMPORTATION OF

MILITARY EQUIPMENT

(GLOBAL)

(1977 ECONOMICS)


USA


JAPAN

W GERMANY




INDUSTRIALISATION FACTOR (l,F )

BRITAIN

CHINA

ITALY* . ""• , AUSTRALIA

INDIA* CANADA

I -I I J 1_

10 20 30 40 50 60

SO

70

INDONESIA

1

90

100


Page 12 - Journal o1ffie Australian N.ival Inslilule

% MILITARY EQUIPMENT IMPORTED

The Industrialisation Factor Scale on the ordinate is normalised with U.S.A. at 1.0. A line of best fit drawn through these points would most probably be asymptotic in nature and is of aca­demic interest only from about 0.2 I.F. upwards. Nations above this level have the industrial cap­ability to meet the large majority of their own re­quirements, raw materials supply assumed, but often choose to either work in joint ventures with near continental neighbours, or take economy ad­vantages of a friendly source's volume production for small quantities or one-off buys

Japan for example would be to the right of such a curve mainly by inclination because of the Japan - U.S. security treaty, the Japanese Self-Defence Forces Law and the presence of some 50,000 US troops in Japan Although Japan has designed and built its own naval vessels, it has normally been content to manufacture US de­signed military equipment under licence (such as the recent 45 P3C and 10OF15 aircraft) and direct its industrial research and development into the non-military area aimed primarily at export mar­kets. Japanese use of its undoubted industrial capacity for military production could well expand in the future due to the ever increasing Soviet Naval presence in the North West Pacific and continuing reduction of US Forces in Japan (40% over last 8 years). There should not be any doubt that Japan could, under the appropriate circum­stances of provocation, turn on a very powerful self sufficient industrial military capability In any case, as mentioned previously, the curve from about 2 upwards on the IF scale is largely aca-

demic and is presented mainly lor reasons of perspective.

The lower portion of the curve is much more interesting as it is here that the changes are oc­curring now and showing medium to high prob­ability of occurring in the future. In 1977. the po­sition of Australia would be as shown almost ex­actly on the curve indicative of the fact that Aus­tralia s military industrialisation situation is largely dictated by free-market forces The greater the degree of economic regulation, either by for ex­ample, protectionist measures or forced creation of a self-reliant or self-sufficient Defence Indus­trial Infrastructure, the further this point could be expected to move to the left, as can be seen in the case of India.

The source for determination of the Aus­tralian position is the 1977 Defence Report which tables five years 1972/73 to 1976/77. During this period Australia imported 71.5% of its capital equipment requirements for the Armed Forces and 24.4% of the Armed Forces Requirement for Replacement Equipment and stores, giving an overall average of 47% imported component Just for interest, in 1977/78 the per cent spent over­seas was 46.8%, and the estimate in 1978/79 was 44%. (see figure 2).

Now, if we were to magnify the lower portion of this curve the picture seen would be similar to that shown as figure 3. Japan of course is well out ol the bracket high and Canada is included only for reference purposes. Asean countries from an industrialisation viewpoint could be expected to be in the lower right as shown

FIGURE 2 AUSTRALIAN DEFENCE OVERSEAS EXPENDITURE

1972-3 1973-4 1974-5 1975-6 1976-7


SM




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