LETTER: The arms deal — time for financial restitution

Helmoed Römer Heitman yet again bemoans the chaotic state of SA’s military capabilities, and that the BAE/Saab Gripen fighter aircraft are grounded (“SA’s military is on a downward spiral towards becoming a mere militia”, February 14).

Ironically, Heitman himself bears major responsibility for the fiasco. In June 1998 Trevor Manuel and Maria Ramos jointly signed a Treasury memo entitled “Availability of Funding for Procurement of Defence Equipment” that declared funding for defence procurement should not exceed R1.4bn by 2001/2002.

Just five months later, Manuel was party to the cabinet’s arms deal announcement that R29.8bn spent on armaments would magically generate R110bn in offsets and create over 65,000 jobs. Given SA’s straightened financial circumstances, the arms deal lobby, led by Joe Modise, Alec Erwin, Armscor and including Heitman, had embarked on the deception and absurdity that the more SA spent on arms, the more we would receive back in offset benefits.

In a Swedish TV interview aired in September 1998, Heitman was asked: “Is Sweden taking advantage of having supported the struggle against apartheid”? Heitman replied: “Yes, the Swedish industry and government, especially the government. The government sent a senior diplomat [Roger Hallhag] who was involved in the sanctions campaign. That went down well with politicians and the media. A pleasant little touch... Yes, offsets are more important than the equipment itself”.

The August 1999 arms deal affordability study warned the cabinet that the arms deal was a reckless proposition that could lead the government into mounting fiscal, financial and economic difficulties — in short, exactly the shambles SA has since faced because of the arms deal and the culture of corruption it unleashed. Offsets are a scam perpetrated by the war business with the collusion of corrupt politicians to fleece the taxpayers in recipient countries.

The cabinet, led by Thabo Mbeki, specifically overruled a recommendation that the BAE/Saab Gripens proposal should be cancelled. Manuel, whose responsibilities were the affordability and financing of the arms deal, signed the 20-year Barclays Bank loan agreements for the BAE/Saab contracts in January 2000.  Those loan agreements are in my possession and have been verified in court as authentic, and described as “potentially catastrophic for SA”.  Manuel was obviously more concerned about personal power and status than the welfare of South Africans, and buckled to Mbeki and Modise’s pressures.

Meanwhile, in November 1999 the then Swedish prime minister, Goran Persson, led a 700-strong trade delegation to promote the Gripen deal. It included a symposium in Cape Town entitled “Military Expenditure and Poverty Alleviation”, which was led by Hallhag as Persson’s international adviser. Hallhag opened the meeting by describing the offset programme as brilliant. He agreed, when challenged, that offsets are internationally notorious for corruption, and then compounded his gaffe by declaring that “lower standards apply in third world countries”.  When confronted with why the Swedish government was deliberately encouraging corruption in so-called third world countries, Hallhag suddenly had another engagement and left the meeting.

Some 160 pages of affidavits by Britain’s Serious Fraud Office and the Scorpions detail how and why BAE and Saab paid bribes of £115m (R2.3bn) to secure those BAE/Saab contracts. When shown some of the documentation, an angry Archbishop Desmond Tutu declared: “This negates all the good that Sweden did in supporting the struggle against apartheid.  I am totally distressed given what the money spent on those planes could have done in SA, and that the British and Swedish governments were so involved in the cover-up”.

Against expenditure of $2.5bn, BAE/Saab were contractually obligated to deliver $8.7bn (R132bn) in offset “benefits” and to create 30,667 jobs. As predicted, the offsets never materialised.  Thanks to Heitman and crew, the SA National Defence Force “blew its budget” on the arms deal fiasco. Not only are the Gripens grounded, but having departed the SA Air Force for commercial opportunities, there are also no qualified pilots to fly them, let alone money to fuel them.  There is likewise no money to play war games in the Democratic Republic of Congo, Mali, Mozambique or the Central African Republic.

Thanks to the corruption the arms deal unleashed, unemployment and desperate poverty are now far worse than even during the apartheid era.  Alleviation of these acute crises among South Africans is a far greater priority than war games and/or Heitman’s militarist ego. It is also long past time for the war business and European governments to acknowledge the socioeconomic devastation they inflicted on SA, and to make financial restitution.

Terry Crawford-Browne
World Beyond War SA

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