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Robin Has No Border

March 18, 2017

Bangladesh has entered a phase of massive defense procurement program. However, most of this procurement is being done by state. Private sector has no role to play here whatsoever. Moreover, we need to update our existing laws that will ensure participation of domestic and foreign private companies in our defense program.

Over the years, Bangladesh procured arms from China, Pakistan, Russia, Serbia and some western European countries. Now India wants to join the list of supplier. India continues to insist on defense cooperation agreement and offers a $500 million credit line for arms procurement despite the fact that the country is perceived as a threat to Bangladesh by its strategic community.

Defense deals signed earlier were mostly state-to-state deals. Since this kind of deals are shrouded in mystery and government discourages covering defense related news, they are not free from allegations of corruption and misappropriation of public funds.

In addition, as the state is involved in the production of defense article production, there is little room for innovation, transparency and talent management.

If private firms are allowed to produce defense article or to take part in procurement program degree of corruption could be much lower.

And part of the money being spent on defense may be channeled out to private sector, which is witnessing a stagnant period in investment.

Defense spending with private sector will not only spur investment, but at the same time will create transparency and efficiency.

For private firms, it is easy to collaborate with other multinational corporations. This collaboration paves the path for technology transfer and setting up joint ventures. And private companies with sound balance sheet will invest on other sectors.

So clearly defense money going to private firms has multiplier effect.

Current alternative to this—state is responsible for spending the defense money—offers overspending, money laundering, political controversy and empowering anti-democratic forces.

Government shells out fund without seeking any  explanation to meet the growing procurement demand of armed forces. This in the end swells the pocket of agencies that have zero accountability to any govt or parliamentary body.

Since the opposition parties are cornered, the agencies with growing influence may further embark on political (mis)adventurous projects.
On the other hand, if the private sector take hold of the defense spending , at least a part of it,  then they will stimulate economic activity as well as ensure a vibrant democratic culture, diluting the influence of agencies.

Private companies, being non-state actors, can operate in grey areas and work with ease whenever tensions or disputes deteriorate relationship between countries.

Let me elaborate this point with the aid of an example. Let us think of two countries, A and B, and a corporation , Robin Inc.

Few points need to be taken into account to better understand the discussion.

For A:

1.It is at odds with B.

2.It has disputes with B in several areas and in future disputes may turn into an ugly form.

3.Its defense policy is likely to change under a new regime.

4.It is net importer of arms and endowed with few state-run defense article production facilities.

5.It procures arms from countries that are B’s rivals.

6.Its defense policy makers and strategic community think B has nefarious plans to destabilize A’s economy.

7.Democracy is in fragile state in A. Disruption of democracy may harm B’s interests.

8.It cannot influence B’s economic, strategic and foreign policies.

For B:

1.It follows a stable foreign policy and it is unlikely to change under a new regime.

2.It can influence A’s economic , strategic, and foreign policies through its actions.

3.It is a big importer of arms, as well as exports its own license-built arms.

4.Regimented groups in B can shape bilateral agreements and foreign policy issues with A.

5.B thinks any regime change in A may benefit its rivals.

6.B’s interests and interests of corporations working in B are different.

7.Multinational corporations can work in B at ease.

8.Tensions between B and its rival countries can turn into a low-intensity conflict at any moment.

For Robin Inc:

1.It operates both in A and B.

2.Regional tension barely affects its operations.

3.It engages in various sectors: mining, steel production, power generation apart from manufacturing and export of arms.

4.It has production facilities where it operates.

5.It prefers to avoid political controversy.

6.It has a deep commitment to Corporate Social Responsibility (CSR) activities in the countries it operates. Instead of paying commission to corrupt bureaucrats  and politicians, it attributes part of the money to CSR activities.

7.Any change in govts in A and B has no effect in its policies.

Having noted the strategic interests of the three, it is quite evident that A and B have different set of strategic interests. Meanwhile, Robin Inc can work easily in these countries even when the countries are at odds.

It is simply because some of Robin Inc’s interests overlap with those of A and B.

This is the biggest advantage Robin Inc enjoys.  Another advantage that makes Robin Inc attractive to other countries is its widespread vendor network and its collaboration with other corporations.

For instance a country facing international embargo can transfer or sell the license of a particular defense article to Robin Inc so that it can produce it in any of its facility and then markets it globally.

As it is a non-state actor, regimented groups that try to shape bilateral and business policies have no effect on its decision making.

So, local tension hardly influences business activities of Robin Inc.

Being a private company, it fills govt coffers by paying taxes and duties and becomes one of the top five taxpayers in the countries it does business.

Meanwhile , state-run arms production facilities hardly pay any taxes and rest on govt for their   operation. Moreover, govt has to pay a good amount of subsidy to meet their production goal.

Quite evidently domestic and international factors strain relations and draw a thin red line , making it difficult to carry through usual business activities at state-to-state level.

Far away from this local and international tension, Robin Inc operates in a grey area and has easy access to the territories of conflicting parties.

As the robin flies beyond the border and can go wherever and whenever it wants, Robin Inc operates across all over the globe during peacetime and turbulent period. Thus , it makes a difference in people’s lives and connects nations that are constantly at odds with each other.

Robin Inc Final

A,B,Robin Inc


From → Analysis

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