AIM: start

THU, 14 JUN 2001 01:22:21 GMT

Slovenia and Weapons

The Death Trade Is Back

The military industry in Slovenia was stigmatized during the past 10 years as part of the hated Yugoslav People's Army (JNA), causing the "death trade" (for which one-time federal defense minister Branko Mamula was fiercely criticized) -- thanks to an initiative by peace activists -- to almost disappear from the country's economy. Meanwhile, the peace movement faded away and the military industry, dressed in new robes and supported by the government, is slowly recovering

AIM Ljubljana, June 4, 2001

A two-day international conference on "barter" trade and competition, held under the auspices of the ministries of the economy and defense, just ended in Portoroz. About one hundred participants from nine countries warned of various problems arising from this type of trade, while the hosts mostly praised it and stressed its usefulness in improving the rating of Slovenian companies on foreign markets.

The Portoroz gathering was a signal that attempts are underway to restore Slovenia's military industry. During the times of the former Yugoslavia this segment of the Slovenian economy was not negligible at all. The annual value of weapons produced in Slovenia in 1988 reached US$220 million. A huge drop followed. Slovenian experts in the field say that of all the sectors in the economy "the military industry was probably the biggest casualty of the bloody dissolution of the common state and army." Many managers of large companies operating in the sector today admit with a note of nostalgia that the former Yugoslav People's Army (JNA) paid regularly and was an excellent customer, ordering arms in enormous quantities and exporting a good portion of what was manufactured.

The former army, for example, purchased various types of explosives from the Kamnik chemical plant, it bought trucks and utility vehicles from Maribor Tam, electronic and optical products from Iskra and Foton, and parts for tanks in Slovenia's one-time giants -- STO Ravne and the Jesenice steel mill... Paradoxically, even during the war in Croatia (much like Croatia itself), it honored existing contracts with the JNA and was properly reimbursed. Thus it supplied the JNA with rubber tank tires (produced by the Kranj-based Sava, today owned by Goodyear), tank treads produced at the Jesenice steel mill, as well as with some other parts indispensable in the production of the Yugoslav T-84 tank that was sold to a customer in the Middle East.

The final dissolution of the former Yugoslavia killed that kind of business. Deals and contracts fell through, marking the beginning of troubles in that segment of Slovenia's industry. Companies which even earlier were blasted for being accomplices in supporting repressive regimes (for example, in Ethiopia) by manufacturing weapons did not get any assistance from the new, independent Slovenia. For years good (foreign) buyers and investors were sought, as if the sale or liquidation of such companies was the only way to remove the stigma of disgrace stemming from their cooperation with the JNA. Needless to say, for them there were no "conversion" programs, nor transitional projects meant to help them switch from the military to the civilian sector, as was the common practice in the former U.S.S.R., the Czech Republic, and other countries of the former Warsaw Pact. During the former Yugoslav era, most critics of the military-industrial complex and Belgrade's "death trade" came from opposition circles, and, particularly, from Slovenia.

The military leadership constantly fended off attacks coming from the Ljubljana newspaper Mladina, particularly those criticizing Yugoslav arms exports. Janez Jansa, who was to become the first defense minister of independent Slovenia, was one of those who frequently dealt with this issue. "Yugoslavia also pays great attention to the export of arms and military equipment, which accounts for 17 percent of its export revenues. This is a high percentage, which doubtlessly significantly influences the foreign trade liquidity of the country, although it does not yield too much, compared with world trends, because we export mostly to nonaligned countries. Still, to export weapons is to participate in the international death trade," wrote Jansa in the Ljubljana-based Tribuna newspaper in 1984. When seven years later he himself entered Mamula's shoes by becoming defense minister, he immediately forgot all his noble principles. During his term of office, his signature enable Slovenia to sell to Croatia and Bosnia tons of weaponry for cash that not only failed to end up in the budget, but which has not been accounted for to this day.

There were attempts to organize domestic production, but they were failure. The main reason was the production costs of limited series. There was a project, for instance, to produce hand grenades in the Kamnik factory. Financial plans showed that the cost was to be DM30 per unit. The same product in the Czech Republic cost DM5. The Rifle Project, which for a while occupied its creators at the closed Kocevska River military facility, shared the same fate. It all started shortly after Slovenia gained independence, when the introduction of NATO standards in the Slovenian army was considered. Officials planned to replace all infantry weapons with various types and clones of the U.S. M-16 rifle. The Slovenian administration of the time was on the verge of buying a license for producing it. The plan collapsed because of high costs -- Slovenia acquired from the JNA, among other things, some 40,000 AK-47s, and the transfer from 7.62mm caliber to 5.56 mm caliber would have devastated the state budget. Replacing the weapons was so costly that even the current defense minister, Anton Grizold, has postponed it for another three years.

The so-called "unprofitability of investment in domestic arms production" was for a long the key excuse for purchasing weapons abroad. A partner was found in Israel, one of the rare countries willing to violate a U.N. Resolution banning the sale of arms to the former Yugoslav republics and supply Slovenia with mortars, electronic equipment and parts for T-55 tanks. The former defense minister, Tit Turnsek, currently manager of the Iskra-Elektroveze company, went a step further and said Slovenia's weapons industry was at an all-time low while Jansa was defense minister, because it had been "shunned as part of the hated JNA." In addition, the government circles of the time believed that the domestic arms industry should not be developed because everything that was needed could be "purchased in the West."

Turnsek adds that only in recent years did the attitude of the (Drnovsek) administration substantially change in regard to arms production. The Slovenian industry has began manufacturing the Valuk 6x6 (a version of Austrian Pandur), an infantry combat vehicle licensed from Austria's Steyr. Before production started the vehicle was widely criticized as being capable of firing only on paper (it is interesting to note that the Austrian army does not have a single one as part of its regular arsenal), that its armor can be pierced by ordinary bullets, and that it is not an amphibious vehicle, which is quite a setback for a country like Slovenia which has rivers at every corner. Despite all this, however, production began. Slovenian engineers claim it is very mobile, that its six wheels can climb up very steep (70% incline) slopes, and that over the next several years they could manufacture up to 1,000 of them.

The army currently has 10 such vehicles, and another 20 or 30 more are planned. Over the past decade Iskra's Foton facility has also been quite active -- it has manufactured quality laser ranger finders and other important military equipment. Iskra is still hoping it will make it onto a large market and that some 2,000 Russian tanks across Europe, thanks to its products, will greatly improve their combat capabilities. The public was informed of the company's production program in July, 1994, when Austrian customs officials opened at Vienna's Svehat airport five crates containing optical range finders, worth US$598,630, the Iranian government planned to use to improve the firepower of its U.S.-made M-60 A3 tanks. (The deal between Iran and Slovenia was made a year earlier, when the then foreign minister, Lojze Peterle, visited Iran and met with Iranian President Rafsanjani. Their cooperation, obviously, was to the dislike of U.S. intelligence services, which closely monitor all similar endeavors of European arms producers whom they do their best to prevent from violating a U.S. ban on business with Iran.)

Finally after a decade of vegetating on the sidelines, the managers of Slovenia's military facilities have begun considering the idea of going back into business. They formed a defense industry section as part of the Slovenian Chamber of Commerce and Industry. They are also planning to form a special consortium and offer their products for sale over the Internet on the defense ministry's Web page (http://www/m/ Slovenia exports most of its weapons and equipment, worth US$4.4 to US$5.5 million, to Israel, but is simultaneously seeking to establish contacts with partners in the former Yugoslav federation. These contacts were once quite developed -- there were 14,000 separate contractors in the production of the T-84 tank alone. An internal regulation meant to protect the domestic industry (provoked by an unquenchable appetite for purchasing weapons abroad), however, could be a serious obstacle to this. The regulation requires that those who sell weapons to Slovenia must use a part of their profits to purchase Slovenian products. This provision, obviously, has failed in having the desired effect.

The debate in the media prompted by the plans to revive the military industry lacks the emotional and critical charge of 10 years ago, when the Slovenian "peace movement" opposed not only the development of a Yugoslav supersonic plane, but any export of Yugoslav weapons to nonaligned countries. Today, the headlines read "Arms Manufacturers Are Back," "Government Loves Domestic Arms," "New Business Opportunities." The change of heart is explained as due to the fact that Slovenia today exports arms mostly to the West, meaning that it is not supplying "undemocratic regimes" somewhere in the "third world." What is forgotten, however, is that "Western weapons" are equally capable of killing people, and are doing so every day, from Turkey to Israel... Be it as it may, the death trade that was so fiercely attacked in the former Yugoslavia is now viewed as a normal economic activity. This speaks volumes about the sincerity and motives of the former "peace activists."

"It is true that in the contemporary death trade government support plays an important role, but this still cannot prevail over the two universal factors essential for a potential buyer's decision price and competitiveness," the Ljubljana paper Delo coldly concludes. This appears to have ended all internal dilemmas: it requires no special wisdom -- weapons will always be made and sold. What counts is the color of money.

Igor Mekina