Are Private Arms Firms a Concern?

The revelation last week that Taiwan Goal, a private arms company, had been created with an initial investment of NT$200 million (US$6.3 million) -- NT$90 million of which came from the Ministry of National Defense -- raised alarm in some quarters. Why the hush-hush business, some asked, while others seemed shocked to learn that the private sector could get involved in national defense.

But more ink was spilled on the matter than was necessary. A quick look at the US defense establishment, to use one example, shows us that the private sector in democratic societies has always played a role in weapons manufacturing. The private sector's distance from government bureaucracy, for one, as well as the dynamics of the market, gives it more flexibility and effectiveness in the development of weapons.

From Crown Corporations in Canada to the RAND Corp think tank in the US (created by the US Air Force, then a division of Douglas Aircraft), governments have a long history of farming out their work to private companies. Even consumer appliance manufacturers like GE are major weapons manufacturers, a fact that most Americans are unaware of.

Given Taiwan's unusual political situation and how this affects its ability to acquire the weapons it needs to defend itself, the creation of a private firm makes a lot of sense. Such an arrangement will, for one, facilitate contacts at the corporate level and thereby counter the hesitation of states to discuss arms sales with Taiwan at the state level.

The laws of the free market, rather than pure politics, will decide if, when and from whom Taiwan acquires weapons.

This, however, does not mean that all of a sudden Taiwan will be able to acquire whatever weapons it desires, as sensitive technology, even that which is developed by foreign private companies, remains subject to arms control mechanisms that are the remit of governments. Nor does it mean that Beijing will not pressure governments into preventing their private sector from cooperating with Taiwan. Nevertheless, given the greater independence of the private sector and the pull of business interests, it should facilitate Taiwan's efforts to acquire weapons and give it more flexibility as to where it buys them. In other words, it would diminish Taiwan's reliance on US-made weapons.

Where Taiwan Goal promises to be of the greatest benefit to Taiwan, however, is in development, as this will help it circumvent arms control mechanisms altogether, because Taiwan itself would be involved in the development. Such was the case with the "Ching Kuo" Indigenous Defense Fighter -- whose development in Taiwan (a joint US-Taiwan venture) was a compromise, as Washington was loath to sell Taipei the advanced F-20 aircraft it wanted. It will also help it to customize weapons to meet its specific needs.

Still, this new endeavor is not without risks, and the appropriate oversights must be put in place to ensure that a nascent private defense industry in Taiwan does not see arms exports as its raison d'etre, as would a military-industrial complex. There is enough proliferation out there without Taiwan adding to it.

In other words, as long as Taiwan Goal retains the goal of helping Taiwan defend itself, it will be welcome. That the government has a hand in the company could ensure the company doesn't lose sight of that goal.

Taipei Times Editorial, February 19, 2008.