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Farewell to foreign arms?
Josy Joseph, TNN, Aug 1, 2010, 12.22am ISTThe modern nation state has certain core components, including killing machines such as fighter jets, battle tanks and nuclear-powered submarines. Countries maintain armies because it's the state's duty to protect its citizens. In the 20th century, countries started to pursue organized defence research to ensure their military is well equipped. This led to some of the greatest inventions of modern times, notably the Internet and rockets. The process also resulted in the establishment of massive industries making deadly war machines, employing millions and generating billions in sales. Today, the Military-Industrial Complexes (MIC) that emerged is at the heart of the industrialization of most developed and some emerging economies.
There is an exception: India.
India has the dubious distinction of heading the list of the world's biggest arms importers. The list includes undemocratic oil-rich countries in West Asia. Other traditionally big arms importers such as China have moved away from buying and towards creating their own military-industrial complex. China's conventional weapons imports show a steady decline. In 2009, except for a few helicopters from Russia and France, Beijing did not buy any major systems. But, India's defence budget rises year on year. Given the two-pronged threat from Pakistan and China and concerns about the Indian Ocean, India is expected to remain a voracious consumer of military equipment for the foreseeable future. More than 70% of India's defence purchases are from firms in Russia, Israel, Europe and the US.
India's big-spend on weapons has not gone unnoticed by the wider world, mainly sellers. Now, it is virtually mandatory for visiting world leaders to bargain in Delhi for big-ticket defence purchases. When British Prime Minister David Cameron landed in Bangalore on Tuesday and realized the 735million-pound deal for 57 new Hawk trainer aircraft wouldn't be signed as expected, there was much last-minute diplomatic manoeuvering by the British. A single-page agreement was finally signed, enough to satisfy the visiting delegation.
In the next few months, at least three other high-profile visitors — President Sarkozy of France, President Medvedev of Russia and President Obama of US — will arrive in Delhi, hawking military wares. Big-spend defence orders from India are important to each of them. They will bring in money and help create and sustain thousands of domestic jobs.
Why can't India do the same for its domestic economy? Why shouldn't it create its own MIC — a giant web of major factories that work as system integrators; numerous small and medium industries that supply specialized parts; a cutting-edge military research agency; the armed forces to say what they will need in the future; several layers of supervision and coordination and the government funding it all.
The MIC has had a bad press. Fifty years ago, US President Dwight Eisenhower's farewell speech to the nation warned against "the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex". In the 1960s, Bob Dylan sang about the "Masters of War", who "build the death planes (and) hide behind desks". In the West, MIC has been replaced by other terms, such as "permanent war economy" and "war corporatism".
But it may still have relevance in India. Our defence public sector units (PSUs) and ordnance factories employ more people than almost any other country in the world, but have failed to produce any cutting edge military equipment. India has spent — and will continue to — billions of dollars buying defence equipment from abroad.
Why not spend at home and create more jobs domestically? The heart of the matter is India's apparent inability to develop military systems that could be run off assembly lines that employee thousands. Researching and developing new military systems is the job of the Defence Research and Development Organization (DRDO). The DRDO consumes 20% of the Indian government's total R&D funding. Its inherent problems and contradictions mean it is unable to lead the creation of India's very own MIC.
What is wrong with the DRDO? In February 2007, the government tried to find out, setting up an external review committee under the chairmanship of P Rama Rao, a former secretary in the department of science and technology. The committee submitted its report to the government in 2008. In April this year, another committee headed by defence secretary Pradeep Kumar accepted some of its recommendations and rejected others. The Rama Rao Committee report remains a classified, two-volume report, which exposes all that has gone wrong with DRDO. TOI has seen a copy of the damning report.
It paints an extraordinary picture of planning and execution failure and abysmal human resource management and says the DRDO brand is "wilting". The report says: "Sixty years ago the fervour generated by extraordinary leadership won India its political independence. At the present time, technological independence requires a similarly passionate and inspiring leadership."
The report says poor HR management is the DRDO's biggest problem and only 3% of its scientists have PhDs in engineering-related subjects, 60% being plain-vanilla graduates or post-graduates in science, humanities or medicine. The DRDO's staffing clearly is ill-equipped and ill-prepared to conduct cutting-edge research, which could find its way to the assembly line and eventually into the armed forces' armoury.
The DRDO has more than 6,750 scientists in its Defence Research and Development Service (DRDS) cadre, which is spread over 51 laboratories. Fewer than 2% of the scientists in 43% of the DRDO's labs have PhD degrees in their respective core disciplines. The report warns that the DRDO's "biggest challenge" is to attract, nurture and retain talent. "The situation cries out for reforms in HR policies and imaginative new steps to improve and enhance professional opportunities for a technically highly qualified workforce," it says.
The DRDO's cut-off age for entry-level scientists "should ideally be less than 24 years (but) is 28 years and above in more than 40% of the labs," the report says. It adds that in half its labs, "the average age of scientists in all grades is above 37 years. The average age at various levels is significantly higher than what is desirable. This has to be corrected since it is important for younger people to occupy higher positions."
DRDO's recruitment process, too, has come under fire. Entry-level scientists are hired through the Scientists Entry Test (SET) and there is some campus recruitment from IITs, IISc and NITs. But SET suffered a 71% drop in applicants between 2003 and 2006, says the report and there is unnecessary delay in hiring, which "is a major deterrent for the highly talented to consider DRDO as a 'go-to' organization," says the report.
An internal survey, quoted in the report, says 57% of scientists leave DRDO on account of professional dissatisfaction. A whopping 87% of the entry-level cadre joins the DRDO in the belief that it offers great career opportunities, but is "disenchanted soon after", laments the report.
The committee also points serious lacunae in project execution. The report says the DRDO has taken up several large projects, which it would find impossible to execute because of human, financial and infrastructure resource constraints. The committee said interaction with the UK and Israel's defence R&D establishments revealed the "involvement of users at virtually all levels of design, development and production." But back home, there is nothing like that, save for the Navy. "While the Navy has taken the initiative in managing and involving itself successfully in several major projects, the Army and Air Force have not had a similar experience. DRDO, too, has not been forthcoming in accepting service officers, especially at senior levels, to assist in project management," the report says.
The report recommends setting up a 'Services Interaction Group (SIG)' and creating a new chief controller's post within the DRDO. But the panel headed by the defence secretary has shot down these proposals. Instead, it has suggested nominating an officer from each service, who would always be available to the DRDO for consultations. There is the suggestion that senior DRDO scientists undergo abridged capsule training at the War College and other military colleges and that junior scientists be sent on field assignments in a bid to overcome the mistrust between the country's premier defence research organization and its armed forces. "This will enable them to meet and see men in action, and get a better appreciation of the 'how' and 'why' of general staff requirements," the report suggests.
More important, the DRDO should have a bigger role in the purchase of weapons from abroad, the report says, but the defence secretary's committee has shot down this proposal too. The point of all of this is that the DRDO, in the words of the report, is playing a "peripheral role" and India's "most important need is of a policy for self-reliance, promoted by specific quantitative targets for indigenous sourcing of products of R&D."
The report argues that "such growth and development are most urgently required in taking India beyond vulnerability in research, development and effective production". It warns the "imported equipment will increasingly (be) embedded denial-of-use technology as a strategy to protect the national security interests of supplier nations." It says India urgently needs to "reiterate...the goal of self-reliance as a basic policy goal".
All of this is damning stuff but India's inability to create an MIC goes beyond the inherent weaknesses of the DRDO. Senior private sector executives blame the ministry of defence's "institutional bias" against private sector participation. "The attempt is to keep out the private sector, and favour the defence PSUs even if it is at the expense of quality and cost," says a senior executive, who insisted on anonymity. He points out that the central recommendations of the Vijay Kelkar Committee, set up by the government in 2004 to enhance the "country's self-reliance in the defence industry" haven't been implemented six years later. The Kelkar committee had suggested nominating more than a dozen Indian private sector companies Raksha Udyog Ratnas, with a status equivalent to that of the defence PSUs when it comes to bidding for major defence contracts. It had also suggested setting up a Technology Development Fund to support R&D.
An indigenous MIC would also go against the interests of that other invisible power broker — the arms dealers lobby, which greases palms at every level of decision making. It's thought that on average, 5% commission is paid on every defence deal. That would mean a few hundred crores for a deal worth, say, $2 billion. "If the Indian private sector were to become system integrators and major players in the defence sector these middlemen would have no role," points out a senior executive with a major private sector firm.
The problem is clearly part DRDO incompetence, part conspiracy and part systemic weakness. All of this means India is losing out on what could be a key driver for the economy. According to some estimates, a Rs 5,000 crore defence contract can sustain or create about 20,000 high-end jobs. For each high-end job, there are about four support jobs. So, India's projected $80 billion arms imports over the next decade could create six million to seven million jobs within the country. The other positive fallout would be greater financial commitment to industrial R&D and improvement in engineering capabilities.
There has never been a better chance for India to create an MIC as a force for good. It has huge military requirements, a growing defence budget and a thriving private sector. Never in its history has India needed a MIC more than today. South Asia's growing chaos, the rise of a "superpower" in the neighbourhood and its adversaries' threatened manipulation of imported systems.
Are we ready to take the plunge?
http://timesofindia.indiatimes.com/home/sunday-toi/special-report/Farewell-to-foreign-arms/articleshow/6242138.cms
