| Offsets in small countries:between
Scylla and Charybdis? Abstract |
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Professor Wally Struys |
| Offsets are mainly used as a means to develop or to maintain defence industrial activities and to improve their technical quality. They often succeed in doing this and also present attractive economic advantages in strengthening national defence firms in the short-run. However, the other side of the coin shows a growing dependence on discontinuous defence orders and vulnerability to structural changes. Most of the time, offsets are also based as much - or even more - on political considerations as on economic reflections. As a result, offsets and the economic paradigm are more often than not contradictions. The present Belgian government decided in 1999 to abolish offsets for its future defence acquisitions. Heavy lobbying from the industry and some political fractions followed this decision. The outcome of the dispute still is not certain. In order to get rid of the present unclear situation, four possible solutions are examined, with their pros and cons. The latest decisions of the Belgian government are also discussed. |