Foreign Conversion. An Annex to Adjusting to the Drawdown
Abstract
This paper was prepared as input to the Defense Conversion Commission in preparation of its December 1992 Report, Adjusting to the Drawdown. This paper does not necessarily reflect the findings, conclusions, or recommendations of the Defense Conversion Commission, the Department of Defense, or any Federal department or agency, nor does the Commission necessarily endorse the views expressed herein. The United States is neither the first nor the only country to experience reductions in its defense spending. Several western European countries have also reduced their defense spending, as have countries with planned economies such as the (former) Soviet Union and the Peoples Republic of China (PRC). As many as 100,000 of the 1.5 million defense industrial jobs were lost in western Europe from 1987-1990, and another 350,000-500,000 could be lost by 1995.' Starting in the late 1970s, China undertook to shift the emphasis of its defense industry from military to civilian production. Ten years later, the Soviet Union also attempted an ambitious conversion program that was to be centrally planned, but responsibilities for conversion fell mainly on the plant managers and local governments as the country collapsed. Japan's defense production is relatively small, and benefits from being embedded in the civilian sector. While the economic structures and degree of government intervention in the economy may vary, the experiences of these countries in minimizing the negative impacts of "downsizing" the armed forces and/or reducing procurement are useful in identifying common and particular problems as well as approaches that have succeeded and failed. It is the purpose of the paper to summarize these foreign experiences and distill lessons for the U.S. from them. It focusses on four main responses to contracting defense spending: physical conversion (that is, changing the actual output product of a plant or factory), diversification, concentration or rationalization, and exports.
Document Details
- Document Type
- Technical Report
- Publication Date
- Feb 01, 1993
- Accession Number
- ADA640729
Entities
People
- Peter Almquist