The defense industry in the Czech Republic
The Czech armaments industry has gone through many changes since the fall of communism. Through reorganization, privatization, and the loss of the massive Soviet market the Czech Republic's arms industry is just a fraction of what it once was. Martin Hrobsky explores how one of the world largest arms producers took it upon itself to create a more peaceful world only to find out that it was not in the countries economic interests to do so.
After the onset of communism in Czechoslovakia, the regime continually developed the arms industry. The spread of communism throughout the world during the cold war ensured a large market for Czech arms. For example, it was the sale of Czechoslovak arms to Egypt in 1956 that sparked the Suez Crisis which saw France and England pitted against the Soviet Union.
The arms industry was also used by the communists regime as a tool to equal some of the economic disparities that existed between the Czech lands and Slovakia. The production of heavy armaments provided for industrial development which also produced a large amount of jobs. However, Slovakia's dependence on labor intensive production would prove to cause problems after the fall of the communist regime in 1989.
The election of Vaclav Havel as Czechoslovak president, and the introduction of democracy and the free market brought about a major change in the arms production policy of the new government. The arms industry would be reorganized in what became known as the conversion program. The idea was that Czechoslovakia could make the world a better place by ceasing to export arms.
The conversion program was designed to drastically reduce the size of Czechoslovakia's arms industry in a few short years. I spoke with Vratislav Vajnar who is the Managing Director of the Association of the Defense Industry of the Czech Republic, an organization which brings together more than 100 companies from the Czech defence industry sector.
"Speaking about the conversion program I have to say that it was nonsense. Because the idea was when the Czech Republic or Czechoslovakia at those times will terminate their defense industry products there will be peace in the world and the world turn to the safe place and there will be no wars. But from the year 1989 we can see that something is going wrong in the world. Because Czechoslovakia almost stopped its defense production but we can not see any progress in the peace movement around the world. So the conversion program was not the correct one for the Czech defense industry because after these 13 years we can now see that there is a necessity to be prepared for various kinds of terrorist attacks all over the world."
The main elements of the conversion program were included two steps. Some companies were privatized and others reoriented. This policy had mixed results where some companies managed to survive on non-military production where others simply ceased to exist. The massive decline in arms production can be seen in the fact that in 1988 arms production equaled 12.3 billion crowns, in 1992 it amounted to only 2.4 billion crowns. The conversion program caused many problems in Slovakia because the majority of arms production was centered in labor intensive enterprises, meaning that conversion meant massive job losses. Eventually, hardships felt by Slovakia due to the demise of the arms industry would be an influential factor in the break-up of Czechoslovakia in 1993. Mr Vajnar explains how the dissolution of Czechoslovakia affected the Czech arms industry:
"Thanks to the dissolution of Czechoslovakia to two separate states, Czech and Slovak Republics. We as the Czech Republic lost all the possibilities to produce heavy and armored weapons systems. This means tanks and personal armored carriers, so this is history. I can say that in the Czech Republic we will not in the near future be prepared for such kind of production because all the equipment and plants were left in the Slovak Republic."
After realizing the export potential that was lost as a result of the reorientation the government began to again support the industry during the mid 1990's. A newer element of the Czech defense industry is the upgrading of older military equipment, especially the T-72 armored tank. So along with the expansion of NATO the Czech Republic can expect growth in this division. Today the Czech defense industry has largely reorganized itself, Mr. Vajnar explains:
"The Czech Republic is now oriented to more sophisticated kinds production, as it is passive surveillance and location systems and also the means used in the detection of biological and chemical warfare."
Are there any products which are high in demand around the world?
"I think especially the area of small arms and light weapons. Meaning short arms, pistols, revolvers, light machine guns, etc. Also we are able to offer to world demand ammunition for these armaments. And also there is a special kind of production, it means we have a very sophisticated sub-sonic airplane the L-159 which is a leader in this area in the world, in training equipment for future pilots. And also what we can offer is transport means, heavy trucks and especially production of the Tatra company. In the area which I mentioned, it is self-protection equipment for soldiers, gas masks, and also the chemical and biological testing equipment for searching for these agents."
The conversion program drastically altered the once huge defense industry in the Czech Republic. Through privatization, many larger companies were divided into much smaller independent firms. This has had a negative effect - whereby the small firms became unable to compete with the larger international manufacturers. I spoke with Jiri Kominek who is a Prague corespondent for Janes Defence Weekly, a magazine covering global defence and I asked him if he expects the Czech defence industry to grow:
"I doubt it will grow, if anything it will shrink because there are far too many companies and they can't compete with Western firms. What they may do is carve-out little niche for themselves for example Ceska Zbrojovka. Companies like these or some of the electronic firms but generally they would have tough time competing against US and Western European companies."
Why do you think that's so?
"Because there is a big gap in research and development that has happened since 1989 and the fall of communism, its behind the loop. Once you lose a technological edge, the game is over really. Most of the companies are either near bankruptcy or basically insolvent. Few companies are doing reasonably well, Aero Vodochody with an order for 72 L-159s from the Czech airforce. They are also trying to secure foreign sales of the aircraft, apart from that nothing special."
The proliferation of arms has become an increasingly important aspect of the defence industry. Amnesty international has continually warned that the current mechanisms which prevent the proliferation of arms, especially small arms, are not enough and highlights the fact that these weapons often end-up in the wrong hands. I asked Mr. Kominek how these mechanisms function in the Czech Republic:
"Well you have what is known as an end-user certificate. And that is issued by the licensing bureau at the ministry of industry of trade, every country has to follow this procedure if your selling defense material, ammunition, weapons, whatever. You have to have the country exporting the goods has to issue the end-user certificate to the company that is going to be exporting the material."
Do you feel that this system is successful in preventing the proliferation of arms?
"Well, generally the system is only as successful as the people who comprise the system. So if someone is willing to make a moral commitment and except money in exchange for issuing a bogus end-user certificate say for example, company A wants to export something to a nation that's under the UN embargo and they want to do it usually through a third country so they will get an end-user certificate issued for say, I don't know, Georgia and the material ends up winding up in Angola, its hypothetical."
Would you say that in the Czech Republic its compatible with Western European countries or in North America?
"Its probably a bit more lax here, not as stringent as it is the US. Mind you, other European countries tend to be fairly flexible as well, France has been known to violate various embargoes."
