Rapid Fire March 9, 2012: Purchasing Power Opacity
- The Australian DoD announced the allocation of construction work for the third ship of the $8 billion Air Warfare Destroyer (AWD).
- Earlier this week India debarred 4 foreign companies – Israel Military Industries (IMI), Singapore Technologies Kinetics Ltd, Rheinmetall’s Air Defence Swiss subsidiary, and Russia’s Corporation Defence (aka Corporation Zashchita) – and 2 local ones – RK Machine Tools Ltd and TS Kisan and Co Private Ltd – from doing business with its Ministry of Defence for 10 years. Apparently this will affect the whole ministry in practice though not in the legal fineprint.
ST Kinetics first complained that allegations to that effect were made since 2009 despite a lack of any formal charges until now. The company then confirmed it received official notification from the Ordnance Factory Board (OFB) which only affects an NDA signed a few years ago, as the firm has not won any defense contract in India. Meanwhile Israel’s defense ministry expressed its surprise and is reviewing how to proceed with IMI.
- Press coverage of the International Institute For Strategic Studies (IISS)’ Military Balance 2012 has been struck by the arresting assessment that “Asia’s defence spending is set to exceed Europe’s this year, for the first time in modern history.” What is most interesting are the underlying fiscal and demographic drivers of such a dynamic, rather than taking a snapshot at a specific moment in time. And it is extremely hard to properly assess real military purchasing power and what capability is derived from it. The concept of Purchasing Power Parity (PPP) is especially relevant to military spending given its significant manpower component.
- One issue that makes such international studies difficult is opaque sales mixed with inaccurate reporting. Such problems affect everyone from the European Union to the US.
- Patrick Clawson from the Washington Institute for Near East Policy is trying to assess [PDF] what would be the impact if Bashar al-Asad lost his grip on Syria. US Secretary of Defense Leon Panetta would rather not “take unilateral action at this point.”
- All the US House and Senate FY13 hearing webcasts in one place.
- Interesting infrastructure planned in the Mediterranean: world’s longest submarine electricity cable to be built between Israel, Cyprus, and Greece.
- Will the presence of women in the French Air Force help seal the deal with Brazil? Femme fatale, femme Rafale [in Portuguese]. Surely you are reading this for the articles.