SOUTH AFRICA'S DEFENSE INDUSTRY: ONE STEP BEHIND

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 06132181
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 27
• Document Creation Date: December 28, 2022
• Document Release Date: November 21, 2017
• Case Number: F-2016-01251
• Publication Date: March 1, 1989

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Directorate of
Intelligence
South Africa's Defense Industry:
One Step Behind
A Research Paper
ALA 89-10008
March 1989
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Directorate of
Intelligence
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South Africa's Defense Industry:
One Step Behind
A Research Paper
This paper was prepared by
Office of African and Latin American Analysis. It
was coordinated with the Directorate of
Operations
Comments and queries are welcome and may be
directed to the Chief, Africa Division
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ALA 89-1 COO8
March 1989
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Summary
Information available
as of 10 February 1989
was used in this report.
South Africa's Defense Industry:
One Step Behind
South Africa's defense industry has not made the country self-sufficient in
military weaponry despite its highly publicized claims to the contrary, and
Pretoria is likely to remain a step behind in state-of-the-art technology.
South Africa currently manufactures the weapons, ammunition, and
supplies needed to maintain internal security, to support or defend against
a guerrilla war, and to maintain relative superiority over most of its
neighbors for some years to come. The defense industry, however, has been
unable to produce, without substantial foreign help, the larger, more
sophisticated weapons systems in South Africa's arsenal. Virtually all of
the combat and intelligence-gathering aircraft, helicopters, missiles, tanks,
and submarines currently fielded by South African forces are foreign
weapons either purchased or assembled in South Africa before the
imposition of the mandatory UN arms embargo in 1977, or subsequently
modified and upgraded with foreign technical and material assistance.
Cuba's deployment last year of well-equipped armor and air forces to the
Namibian border in southwestern Angola highlighted South Africa's
deficiencies in high-technology military equipment. In our judgment, this
has magnified Pretoria's concerns about its ability to defend against a
numerically superior force equipped with modern weapons. Even if the US-
brokered regional peace agreement succeeds in removing the Cuban threat
from Angola, we believe South Africa will seek to develop and maintain an
edge in military hardware to ensure its place as the region's preeminent
military power over the long term
Pretoria will focus on upgrading existing hardware and obtaining major
new weapons systems, including combat aircraft, missiles, and electronic
warfare equipment. Some work undoubtedly will be done by the domestic
defense industry, led by the government-owned Armaments Corporation of
South Africa (Armscor). Work has already begun on upgrading the Air
Force's fleet of Mirage III and Mirage F.1 fighter-bombers, the ground
force's fleet of Oliphant tanks, and the Navy's three Daphne-class
submarines. Both the upgrading of existing armaments and the develop-
ment of new weapons systems, however, will require sophisticated technol-
ogy beyond Armscor's likely capabilities, forcing Pretoria to redouble its
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search for foreign assistance
Pretoria,
however, probably will have difficulty acquiring high-profile items because
of some suppliers' concerns about the stigma associated with providing
arms to South Africa.
Pretoria probably believes that it has little choice but to try to build,
largely by itself, combat aircraft and modern antiaircraft missiles. Al-
though the modernization program will improve the capabilities of present
weapons systems, it will not increase the number of available weapons or
counter a threat posed by such modern weapons as Soviet MiG-29 aircraft,
which Zimbabwe reportedly has considered purchasing.
Several major barriers stand in the way of a domestically built combat
aircraft, and we do not know how Pretoria plans to overcome these
obstacles. Almost certainly, Armscor will try to short-circuit the costly
development process by acquiring the plans for an existing combat aircraft,
probably the Israeli Lavi. Even with plans, however, Armscor may have
great difficulty building or acquiring a suitable engine. Only five nations�
the United States, the United Kingdom, the USSR, France, and China�
have successfully produced high-performance jet engines; none have close
relations with Pretoria or want to be seen violating the UN arms embargo.
Even assuming that Pretoria can clandestinely secure supplies of critical
foreign parts and technology�presumably at a high markup�develop-
ment of the arms industry will exact a heavy economic price. South
Africa's inadequate and inequitable education system will ensure a contin-
ued shortage of skilled labor. As a result, Armscor's success or failure may
depend heavily on its ability to recruit foreign engineers and technicians, a
difficult task in view of possibly renewed domestic unrest. In addition, the
country's small industrial base will probably make it extremely expensive
to produce sophisticated weapons. Finally, declining export revenues, due
in part to sanctions, may eventually force Pretoria to cut back on some
weapon programs.
Unless South Africa can secure reliable foreign commitments to supply
certain critical components, such as key jet engine parts, we judge it highly
unlikely that the domestic defense industry can succeed in producing the
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aircraft, missiles, armor, and electronics systems needed to defeat a
numerically superior force equipped with modern weapons. This failure
would be unlikely to have an immediate military impact because of the
relatively weak position of South Africa's neighbors. Pretoria, however,
will remain vulnerable to major conventional threats such as the one that
was posed last year by Cuban forces in southwestern Angola, and could
eventually see its military options limited by a neighbor's acquisition of
significant advanced weaponry.
The United States, in our judgment, will have little direct influence over
South Africa's weapons development priorities. The South Africans are
unlikely to ask for direct US military assistance, except in the most dire
circumstances, because of Pretoria's expectation that the United States
would demand far-reaching racial reforms in return. In our view, any
significant leverage that the United States may have over South Africa's
weapons projects would stem from US influence over those allies and other
arms exporters who might be willing, in spite of the UN arms embargo, to
supply South Africa with technology, equipment, tools, and parts.
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Contents
Page
Summary
iii
Scope Note
ix
Introduction
1
Development of the South African Weapons Industry 1
Origins
1
Production by Weapons Type 2
Arms Exports 10
Facing New Challenges 11
Upgrading the Inventory 11
New Programs 12
Paying the Piper 13
Outlook and Implications 15
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Scope Note
This Research Paper examines Pretoria's prospects for achieving its stated
goal of self-sufficiency in armaments production, particularly in advanced
weaponry. The subject was last addressed in DI Research Paper ALA 83-
10160C (Top Secret November 1983, South
Africa: Armaments Industry.
Since 1983, South Africa's armaments industry has developed the capabili-
ty to produce more modern weapon systems, particularly to meet many of
its ground force needs, but has not been able to keep pace with state-of-the-
art technology. Pretoria's military deficiencies and the mounting financial
and human costs of its combat operations in Angola and Namibia were pri-
mary factors in South Africa's political decision in 1988 to accept the US-
brokered regional peace settlement. Even so, we believe South Africa will
continue to try to develop sophisticated weapons systems.
This paper is deliberately narrow in scope, and it focuses on the technical,
economic, and foreign assistance aspects of South Africa's ambitions to
develop further its defense industry. Political and strategic military factors
outside the scope of the paper could also have an impact and will be
addressed in future studies.
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Figure 1
Principal Armscor Subsidiary Companies
rCOMPANY
O Kentron
Pretoria Metal Pressing
Infoplan
O Lyttelton Engineering
0 Atlas Aircraft
Telcast
Eloptro
� Naschem
O Musgrave
O Somchem
Houteque
0 Swartklip
Aircraft manufacture and maintenanc
Optical equipment
Commercial rifles and pistols
High-tech metal alloys
Large-caliber ammunition
Missile components
Small-caliber ammunition
Propellant and explosives
ACTI VITY
Guided weapons systems
Small-caliber ammunition
Computer services
Small arms and artillery
South
Africa
Cape Flats
Somerset West
Potchefstroom
Bloemfontein�
Pretoria�
Lenz08Verwoerdburg
Kempton Park
200 Kilometers
200 Mites
715791 (A02333) 3.89
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South Africa's Defense Industr :
One Step Behind
Introduction
Pretoria has developed a substantial defense industry
in the last 15 to 20 years capable of producing a broad
range of military equipment. The South Africans are
not completely self-sufficient, however, and recent
events in the region�notably the deployment in 1988
of superior Cuban armor and air forces close to the
Namibian border and Zimbabwean attempts to ac-
quire advanced combat aircraft�have highlighted
South Africa's deficiencies in high-technology items.
This paper examines the recent development of South
Africa's weapons industry�including current arma-
ments production and arms exports�and describes
Pretoria's efforts to upgrade and develop new arma-
ments. The paper then assesses various economic,
technical, and foreign assistance constraints that
South Africa faces in achieving self-sufficiency in
modern weaponry and examines the implications of
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Development of the South African Weapons Industry
Origins
The origins of South Africa's defense industry go
back nearly 50 years. During World War II, South
Africa manufactured ammunition, armored vehicles,
and small arms in substantial numbers as an integral
part of the war effort of the British Empire. Arma-
ments production declined, however, in later decades.
As late as 1960, South Africa produced few weapons
on its own. During the 1960s, foreign governments
began to deny South Africa access to the international
arms market because of its policy of apartheid, and
Pretoria�anticipating a complete embargo�started
to increase its own production capabilities, mostly by
copying foreign weapons. In 1961, private South
African companies obtained no less than 127 licenses
1
UN Arms Embargo Resolutions Against South Africa
1963 Security Council recognized South
Africa as a "threat to the maintenance
of international peace and security"
and urged all nations to stop the sale of
arms, ammunition, military vehicles,
and equipment to manufacture arma-
ments to South Africa.
1970 General Assembly and Security Coun-
cil passed resolutions strengthening the
voluntary arms embargo by expanding
the definition of prohibited items to
include spare parts, licensing agree-
ments, and training of SADF personnel.
1977 Security Council adopted Resolution
418, making the heretofore voluntary
arms embargo against South Africa
mandatory.
from Western firms for the local manufacture of
military equipment. By 1967, private defense contrac-
tors were producing various types of ammunition,
explosives, electronic e uipment, and French-designed
Panhard armored cars.
Shortly after the United Kingdom acceded to the
voluntary UN arms embargo in 1964, the South
African Government became directly involved in ar-
mament production through the creation of an Arma-
ments Production Board. In 1967, Pretoria estab-
lished a second organization, the Armaments
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Structure of Armscor
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Armscor has grown rapidly over the past 20 years. At
its inception in 1967, Armscor consisted of just two
manufacturing plants: Lyttelton Engineering Works
and Pretoria Metal Pressing. Armscor subsequently
gained ownership or control of Atlas Aircraft,
Swartklip Products, Musgrave Manufacturers, and
two chemical factories. In 1977, the Armaments
Development and Production Corporation, Limited,
was merged with the Armaments Board to form the
current Armaments Corporation of South Africa,
Limited, known�like its predecessor�as Armscor.
The mission of the new company was to involve the
private sector effectively and economically in devel-
oping local arms production capacity, eventually
making the country self-sufficient in armaments.
Armscor 's policies are set and executed by a Board of
Directors whose members are drawn from the mili-
tary (the Chief of the South African Defense Forces),
the government (the Director General of Finance),
private industry, academia, and Armscor 's senior
management.
Armscor has expanded its production base by con-
tracting work to established companies rather than
by trying to create new companies that would com-
pete with existing firms for material and manpower.
A symbiotic relationship has developed between
Armscor and hundreds of companies involved in some
facet of armament production. At present, 75 percent
of South Africa's armaments are produced by the
private sector, although Armscor reportedly manu-
factures the technologic "sharp end"
of all weapons systems.
Armscor is now an important part of South Africa's
economy as one of the largest employers and industri-
al concerns, with assets of over $700 million. The
company employs nearly 20,000 workers at its corpo-
rate headquarters and various subsidiaries; its net-
work of more than 450 contractors and subcontrac-
tors is estimated to employ an additional 100,000
South Africans. Virtually all of South Africa's lead-
ing corporations, and many subsidiaries of well-
known international firms, are associated in one way
or another with Armscor.
Armscor is funded directly through the South Afri-
can Government's defense budget. Allocations for the
production and procurement of armaments are car-
ried under line items for Armscor and a "Special
Defense Account." Together, Armscor and SDA allo-
cations have made up 60 to 70 percent of the defense
budget on average since 1975.
Development and Manufacturing Corporation
(Armscor), a state-owned enterprise that was tasked
with coordinating the development and manufacture
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By 1977, when the mandatory UN arms embargo was
imposed, South Africa had much of the industrial
infrastructure needed for domestic armaments pro-
duction and had obtained additional technology from
foreign partners. South Africa had an advanced steel
industry, an explosives industry that had been produc-
ing high-quality explosives for mining for several
decades, and car assembly plants since the 1930s.
This defense industrial base was enhanced through
the extensive use of licensed production and codeve-
lopment programs with other countries. These pro-
jects�carried out primarily with Italy and France�
provided not only a formidable arsenal of modern
weapons, but also technology and industrial know-
how.
Production by Weapons Type
Many of the weapons produced by Armscor are
modest�small arms and ammunition�but the South
Africans also manufacture other sophisticated
2
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Figure 2. Infantryman with R-4 assault rifle
armaments. South Africa's dependence on foreign
technology generally increases proportionally with the
complexity of the weapons system. Although most
foreign technology was acquired in the 1970s, we
believe some foreign countries secretly continue to
assist Pretoria in arms manufacture.
South Africa is virtually self-sufficient in the manu-
facture of small arms and ammunition for its ground
forces. Armscor produces several models of handguns,
rifles, and machineguns. Nearly all weapons are
copies of foreign systems, modified to fit South Afri-
ca's needs. Armscor produces a 5.56-mm assault rifle
and light machinegun, the R-4 and R-5, which are
slightly modified copies of the Israeli Galil assault
rifle, and a modified version of the Israeli Uzi sub-
machinegun. Press reporting indicates that Armscor
has recently produced an indigenous 7.62-mm
general purpose machinegun, the SS-77. The gun
reportedly combines the best features of the Soviet
PKM, the Belgian FN MAG 58, and the British
Bren.
3
Figure 3. General purpose machinegun
South Africa claims self-sufficiency in communica-
tions equipment, but it probably suffers from some
technological deficiencies. Armscor produces frequen-
cy-hopping radios and a mobile VHF radio-telephone
tactical command system.
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Although its production of artillery systems is limit-
ed, Armscor manufactures two of the best howitzers
in the world, the towed G-5 and the self-propelled
G-6, both battle tested in Angola. Although these
long-range 155-mm howitzers are often highlighted in
Armscor's publicity campaign extolling South Afri-
ca's purported military self-sufficiency, both systems
have benefited from foreign assistance. The resem-
blance of the G-5 to the Belgian GC-45�developed in
1975�and to the Austrian GHN-45, produced in
1979, is far from coincidental.' Moreover, South
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'The Belgian GC-45 was developed beginning in 1975 and pro-
duced in 1977 as a private venture by SRC International of lIJA�))
Belgium, a company established by the now defunct Space Re-
search Corporation of Canada, and PRB of Belaium
The Austrian GNH-45, also introduced in 1979, is 'an improved
version of the GC-45 produced by Voest-Alpine of Austria
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Figure 4. South African G-6 155-mm and 45-
(b)(6 ) caliber gun-howitzer system
.4..
(b)(3) Figure 5. South African G-6 155-mm gun-howitzer battery
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Africa has had difficulty fabricating the sophisticated
G-6 weapons systems.
We believe
that the South Africans may now have decided to
accelerate the production of the G-6, given its exten-
sive and successful use during South Africa's 1987-88
interventions in Angola.
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Figure 7. South African Rate! armored personnel carrier
Armscor produces a full range of light armored
vehicles, although most are copies of foreign designs.
In 1976, for example, the Ratel infantry fighting
vehicle�one of the most frequently used vehicles in
the SADF�was introduced by Armscor after about
four years of development. The Ratel bears a striking
resemblance to the Belgian SIBMAS armored person-
nel carrier produced in 1975 by a private Belgian
firm. The South Africans have also modified a West
German design for an all-terrain military truck to
produce armored, mine-resistant vehicles and person-
nel carriers,
In October 1988, Armscor unveiled a new eight-
wheeled armored fighting vehicle, the AFV-76 Rooi-
kat armored car. Armament on the Rooikat includes a
5
76-mm gun copied from an Italian design, a 7.62-mm
coaxial machinegun, and a second antiaircraft ma-
chinegun. Armscor claims that the armor piercing
rounds of the 76-mm gun can penetrate Soviet
T54/55 and even T/62 tanks from all angles.
Armscor's tank production has consisted of modifying
and upgrading its fleet of 250 British Centurions,
many of which were acquired clandestinely during the
1970s. This modification program was assisted by the
Israelis, according to press reports, and included the
installation of new engines, transmissions, fire-control
systems, and a stabilized 105-mm gun.
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Armscor Subsidiaries and Related Companies
Subsidiaries
Atlas Aircraft
Telecast
Ken tron
Eloptro
Lyttelton Engineering
Naschem
Pretoria Metal Pressings
Somchem
Swartklip
Musgrave
Infoplan
Houteque
Private Sector
Benoni Tank Facility
Sandock Austral
Magnis Truck Corp.
TFM
Allied Technologies
Grinaker Electronics
Reunert Technology
Marconi South Africa
Siemens (South African subsidiary)
Plessey South Africa
Liebenberg and Stander
Ho-Kwa, Limited
ESD, Limited
Erikson-Ford
Fuchs
Barlow Rand
Ermetek
OMC
Aircraft manufacture and maintenance
High-tech metal alloys
Guided weapons systems
Optical equipment
Small arms and artillery
Large-caliber ammunition
Small-caliber ammunition
Propellant, explosives
Small-caliber ammunition
Commercial rifle, pistol
Computer services
Missile components
Tank modification
Armored vehicles and naval vessels
Military vehicles
Police vehicles
Electronic components
Communications systems
Electronic components
Electronics
Electronics
Electronics
Shipbuilding
Missile guidance systems
Communications systems
Mine-proof vehicles
Communications systems
Armored vehicles
Tanks
Tanks
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Figure 9. Modified British Centurion tank
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4.1 Pantserkorps 'n
gedugte teenvoeter
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Figure 10. South African�built SAS Drakensberg ship
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the upgraded Centurions�
dubbed the Oliphant�were effective in combat in
Angola, although they were a logistic headache be-
cause of their high fuel consumption and the need to
replace the tracks every 500 kilometers.
South Africa's private shipbuilding industry, which
until the early 1960s had concentrated on repair, has
for the most part replaced Pretoria's previous depen-
dence on foreign military ship suppliers, the United
Kingdom, and France. Armscor subsidiaries are
building the Minister or Mod-class guided-missile
patrol boat under Israeli license. Domestic production
started in 1977, and by 1986 the Navy had launched
the sixth boat built in South Africa. The high water
mark for South Africa's shipbuilding industry oc-
curred in 1986 with the launching of the 12,500-
metric-ton replenishment ship, SAS Drakensberg, the
largest ship ever constructed in South Africa.
can Navy hopes that the experience gained in con-
struction of the Drakensberg will lead eventually to
the building of corvettes and frigates.
The production of modern aircraft is one of Armscor's
top priorities. During the 1960s and 1970s, the
South Africans manufactured several aircraft�in-
cluding the Italian-designed Impala and the French
Mirage multipurpose fighter and attack aircraft. At
present, however, the only aircraft completely pro-
duced in South Africa is the C4M-Kudu, a trans ort
aircraft based on an Italian Aermacchi model.
Armscor has concentrated on modernizing existing
aircraft, most notably the Mirage III. This fighter is
being transformed into the Cheetah by refitting it
with new wings and canards, flight stabilization
equipment, advanced avionics, refueling equipment,
and a computerized weapons delivery system. To date,
about 20 Cheetahs have been placed in the South
African inventory, and_Pretoriaisin_the_marketiar_
Cheetah squadron that will eventually consist of 24
aircraft; at least 10 other Cheetahs will be used as
trainers
The Cheetah has been one of the most highly publi-
cized Armscor programs, intended to underscore
South Africa's technological prowess
foreign
assistance has been an important element of the
program.
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Figure 11. South African�modified "Cheetah" Mirage III aircraft
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The similarities between the Cheetah and the Israeli Kfir, also a
modified Mirage III, have been widely noted in the press. The
differences are significant enough, however, that casual observa-
tion�even at a distance�can distinguish the two aircraft, which
would make it difficult for the South Africans to disguise Kfirs as
Cheetahs. Israel, however, is also producing a second Mirage III
modification called the Nammer. According to "Jane's All the
World's Aircraft," the Nammer is virtually indistinguishable from
the Cheetah.
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Figure 12. Conversion of Mirage 111 aircraft to
Cheetah
South African missile production has been limited to
the copying and modification of foreign systems.
South Africa's main surface-to-air missile, the Cac-
tus, is a copy of a French design. The principal air-to-
air missile in the SADF inventory is the Kukri V-3,
which is made in South Africa and shares design
features with the US Sidewinder and French Matra.
In 1980 the South African Navy introduced a new
naval missile, the Skorpion, which it claimed was
indigenously designed and produced. Both the con-
tainer-launcher and the missile are identical, however,
to the Israeli Gabriel system.
Armscor's subsidiary
Kentron has produced a new antitank missile based on
the US TOW missile. Unlike the TOW, the South
African ZT-3 Masala uses a modulated laser guid-
ance system rather than the original wire guidance
system that did not work well in the bush conditions
of southern Africa. The new missile reportedly was
deployed in Angola, launched from both helicopter
and armored personnel carriers. The ZT-3 bears a
close resemblance to the Israeli MAPATS antitank
missile, which is also a modified TOW with a laser
guidance system.
�61\�et--
Fieure 1 Ku ri heat-seeking air-to-air missile
Arms Exports
The need to maintain efficient levels of production
and to help offset the growing cost of research and
development has put Armscor in the export business.
It began exporting its products in 1982, following a
brief but highly publicized appearance at an arma-
ments exhibition in Athens. In 1987, Armscor had
export revenues of nearly $1 billion on sales
Armscor
today is South Africa's leading exporter of manufac-
tured goods
Most of Armscor's exports involve ammunition, spare
parts, training, and maintenance contracts rather
than new equipment. Competition from other export-
ers and buyers' political sensitivities concerning asso-
ciation with South Africa have limited sales of equip-
ment, although Armscor has made large equipment
sales to Iran, Iraq, and Morocco
In addition,
South Africa's reliance on certain foreign govern-
ments for its own arms technology has led Armscor to
be less aggressive in competing against some arms
exporters, particularly Israel.
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Facing New Challenges
Despite its many accomplishments, Armscor faces
new challenges in the 1990s that will test its capabili-
ties. Armscor's rapid development and expansion over
the past two decades gave South Africa self-sufficien-
cy in the weapons, ammunition, and supplies needed
to maintain internal security and a military edge over
most of its weaker neighbors. Over the past several
years, however, South African military planners have
been reassessing their needs�a process almost cer-
tainly accelerated by recent regional military develop-
ments. Soviet deliveries of modern military equipment
to Angola, Cuba's deployment last year of well-
equipped forces near the Namibian border, and the
Zimbabwean Government's interest in obtaining
high-technology Soviet aircraft, have highlighted
South Africa's serious deficiencies in combat aircraft,
jet engines, radars, and electronic warfare equipment.
For South Africa to possess a credible deterrent and
to guarantee military superiority over its neighbors, it
must now have aircraft and antiaircraft missiles capa-
ble of dealing with Soviet Mi-24 helicopters and MiG-
23 or possibly MiG-29 aircraft; armor and antitank
weapons capable of defeating Soviet T-64 tanks; and
electronic warfare equipment capable of dealing with
a variety of Soviet SAM systems.
Armscor has adopted a twofold approach to these new
challenges. It is upgrading further South Africa's
existing major air, ground, and naval systems, while
also trying to develop and produce new weapons
systems�particularly aircraft and missiles�that in
the past required foreign technical and material assis-
tance. Much of Armscor's modernization is designed
to achieve the "quick fix" and thus depends upon the
acquisition of modern technology�such as jet
engines�from foreign suppliers willing to circumvent
the UN arms embargo. Although these upgrades
would not dramatically improve the capability of
existing weapons, they would provide Armscor with
additional time for research and development of new
(b)(3) weapons systems.
Upgrading the Inventory
The most urgent modification programs involve fixed-
wing aircraft. The second phase of the Cheetah
program, scheduled to be completed within five
11
years, is now under way and involves the refitting of
the aircraft with new engines. With its current
French-built ATAR 9C or ATAR 9K-50 engine, the
Cheetah is underpowered compared to the Angolan
and Cuban-piloted MiG-23s, a fact that led the South
African Air Force (SAAF) to withhold Cheetahs from
action in Angola.' Armscor, however, does not yet
have the expertise or capability to build jet engines
and instead is seeking to obtain them overseas
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South Africa is also modifying its fleet of approxi-
mately 45 Mirage F.1 s. The F.1 is the most advanced
aircraft in the South African inventory and at present
surpasses the Cheetah in performance. Although less
ambitious than the planned Cheetah modification, the
F.1 program, which reportedly involves new tracking
radar and electronic countermeasures equipment, is
probably also benefiting from outside assistance.
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Despite the recent introduction of a wheeled armored
vehicle claimed to be capable of destroying late model
Soviet-built tanks, Armscor is reportedly also upgrad-
ing further the SADF's fleet of some 250 Oliphant
tanks. Oliphants are
to be rebuilt to a new "super" specification. The
changes include addition of an image intensification
and laser range-finding sight for the main 105-mm
gun, new spaced armor on the turret front and sides,
composite armor on the glacis plate, and a new
transmission to improve turning capacity.
' The MiG-23 weighs approximately 35,000 pounds and is powered
by a Tumansky R29-B turbojet, which generates 27,500 pounds of
thrust. The Mirage III/Cheetah weighs approximately 30,000
pounds and is powered by an ATAR 9C turbojet, which generates
13,670 pounds of thrust or an ATAR 9K-50 engine, which
generates 15,900 pounds of thrust. Although speed is not always
critical in aerial combat.
several hard turns, the Sout African aircraft cannot maneuver into
launch position for their air-to-air missiles. Moreover, Angolan and
Cuban MiGs now carry modern Soviet missiles with all-aspect
capability. One South African Mirage F.I was badly damaged by
one of these missiles during an encounter in early 1988.
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With priority given to the air and armor forces, naval
modernization has slipped to the bottom of the list of
priorities. South African Navy commanders, however,
are likely to argue that Namibian independence will
increase the relative importance of naval forces to
patrol coastal waters off the South African exclave of
Walvis Bay and to replace partially land-based stag-
ing facilities in Namibia, especially in the Caprivi
Zipfel. The Navy already is refurbishing its three
1970s-vintage French-built, Daphne-class subma-
rines. press
reporting, the upgrading includes improved fire-con-
trol, navigation, electrical, and mechanical systems.
The first of the three submarines to be modified is
now undergoing sea trials. According to press reports,
work will begin soon on modernizing the two remain-
ing submarines, which are expected to remain in
service beyond the turn of the century.
New Programs
Much of Armscor's research and development work is
devoted to the development of new aircraft and
missile systems, with a secondary emphasis on armor.
The development of a new South African fighter
aircraft, however, would be a long, arduous, and
probably uncertain process. Atlas Aircraft has as-
signed a full-time design bureau to the effort and has
allocated the necessary resources for the manufacture
of a small twin-engine fighter,
Armscor offi-
cials are concerned about the costs of producing a
twin-engine aircraft, noting that it may eventually
evolve into a single-engine plane. Like many of South
Africa's other major weapons systems, the new air-
craft will probably be a copy of an existing aircraft
design. Pretoria has been particularly interested in the
defunct Israeli Lavi program
The biggest obstacle to Armscor's plans will be an
engine for its new fighter; even the Lavi was to be
powered by a US-designed engine. Pretoria claims it
will produce its own engine, but to date only five
nations�the United States, the USSR, the United
Kingdom, France, and China�have successfully
manufactured high-performance jet engines, and their
governments would not want to be accused of violat-
ing the UN arms embargo. Other countries that have
produced combat aircraft�such as Sweden, Italy,
and Brazil�have used foreign engines because of the
high cost and technological demands of establishing
an independent production capability. Recognizing
that indigenous development and production may
prove to be prohibitively expensive, we suspect that
Armscor is attempting to obtain new engines or
engine technology clandestinely. Armscor may at-
tempt to develop a limited production capability for
such foreign-designed engines if only to ensure a
reliable supply of spare parts.
Armscor is also intent on producing its own helicop-
ters; those now in the South African inventory are of
foreign manufacture.
More research and devel-
opment attention has been given to the design and
manufacture of an indigenous attack helicopter than
improved to the point where it may soon be able to
manufacture attack helicopters, although production
will probably still depend on the need to import a wide
variety of parts. Armscor last year unveiled two new
prototype attack helicopters: the XTP-1, a modified
Puma 330, and the Alpha-XH I, a modified Alouette
III.lArmscor officials (u)( I )
claimed that both helicopters were intended for dem-
onstration and testing only.
Armscor expects missiles to be a major component of
its force modernization program. South Africa's most
pressing need is for advanced mobile surface-to-air
systems and effective air-to-air missiles
fully inadequate." The SAAF's need for modern
systems was demonstrated in July 1988 when Ango-
lan MiG-21s flew undetected to the Calueque Dam
area in southern Angola, bombed the dam, and killed
South African soldiers. New air-to-air missiles would
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et
Figure 14. South African�modified "Alpha-
(b)(3) XH1" Alouette III helicopter
be necessary to complement any new fighter aircraft,
which otherwise would still be at a disadvantage in air
(b)(3) battles.
In reaction to the augmentation of Cuban forces in 1988
and the resulting shift in the military balance against
South Africa in Angola, Armscor has attached a higher
priority to enhancing its intermediate range surface-to-
(b)(1) surface missile capability
SAAF officials want to have a missile with at least a
500-kilometer range. Given the breadth of military
cooperation between South Africa and Israel in the
early 1980s, we consider it highly likely that at least
some less advanced technology derived from Israel's
Jericho ballistic missile was provided to Pretoria.
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Despite South Africa's need for a number of new
missile systems, Armscor's prospects for successfully
producing them are not promising. South Africa has a
relatively sophisticated chemical industry, but it has
not been able to manufacture the solid-fuel propellants
that long-range missiles require.' Furthermore, South
� The US Embassy reports there have been rumors that the South
African Airways 747 that crashed off Mauritius in November 1987
went down because of a fire in the cargo hold caused by improperly
stored chemicals. According to Embassy sources, the chemical
involved was ammonium perchlorate, the main ingredient for solid-
fuel propellants.
13
Africa does not have an indigenous electronics indus-
try that can engineer the increasingly sophisticated
microelectronic components required by missile guid-
ance systems. The types of missiles that South Africa
needs most�antiradiation air-to-surface missiles to
use against Angolan SAM sites and surface-to-sur-
face missiles to use against airfields�require the
most sophisticated guidance systems. Foreign assis-
tance may not be available for these key components
because many of the West's most sophisticated missile
systems contain US technology produced under li-
cense. Few countries, including Israel, are likely to
risk losing access to US technology by selling the most
advanced systems to Pretoria
Despite the apparent satisfactory performance of
South African tanks deployed in Angola, Pretoria
reportedly is engaged in at least one tank development
project; Armscor has nearly completed the prototype
of a new main battle tank. The prototype is large, in
the 60-ton class, has a glacis plate made of composite
armor, and also has unusually high ground clearance.
Armscor's tank nroiect may be receiving foreign
assistance.
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Paying the Piper
South African weapons development has suffered
consistently from a shortage of skilled personnel at all
levels. Armscor officials identified a shortage of
trained engineers as one of their biggest problems,
the system of unequal
education for blacks has produced a labor force of
mostly unskilled or semiskilled workers. Government
figures indicate that only 9 percent of South Africa's
work force is skilled compared to an average of 33
percent in other industrialized countries. South Africa
historically has addressed the shortfall in skilled labor
through immigration, but in times of heightened
racial conflict it has experienced a net emigration of
engineers, professionals, and technical workers. The
skilled labor shortage, in our view, will force the
defense industry to pay a hefty premium for skilled
expatriate engineers and other professionals
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South African Defense Spending
South Africa's official budget allocation to defense in
fiscal year 1987188 was $3.3 billion, up $780 million
or 10 percent in real terms from the previous year.a
The defense allocation was nearly 6 percent of GDP
and over 14 percent of total South African Govern-
ment spending for the year. Official defense spending
as a portion of GDP is roughly equivalent to that of
the United States, 5 to 6 percent. The official budget
allocation, however, represents only a portion of
(b)(3) actual defense spending in South Africa.
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In our judgment, the total cost of all defense-related
spending in South Africa is probably 50 percent
higher than the public defense budget. As in other
highly militarized states, many defense-related activ-
ities occur outside the formal defense sector, while
others are simply disguised.
The budgets of government departments other than
defense are also used to disguise funds earmarked for
defense-related purposes. For example, funds for
military intelligence are channeled through the Se-
cret Services Account, which was reported in press
accounts to be about $100 million in 1987188; the
Department of Public Works pays for the construc-
tion of military bases, which press reports suggest
cost $160 million in 1987/88. Other departments that
provide military-related services include the Depart-
ment of Community Development, which is responsi-
ble for housing military personnel; the Health De-
partment, which underwrites some military medical
expenditures; and the Council for Scientific and
a The fiscal year in South Africa begins on 1 April
Industrial Research and various university institutes
and departments that conduct military research. We
believe that appropriations for these items that fall
outside the official South African Defense Force
(SADF) budget probably added an additional $1.4
billion to defense spending in 1987188.
The blurry distinction between the public and private
sectors in South Africa and the proliferation of
government organizations as a result of the homeland
policy also provides the government ample opportuni-
ty to hide defense-related expenditures. Many of the
companies producing military equipment are state-
owned or -controlled companies and receive annual
subsidies from the government that are not included
as part of the official defense budget. In addition,
revenues from military exports are used to supple-
ment the budgets of the various defense contractors.
In fiscal year 1986187, South African military ex-
ports were estimated to amount to
nearly $1 billion
Other defense expenditures are hidden in the budgets
of the so-called independent homelands of Ciskei,
Transkei, Bophuthatswana, and Venda, which have
their own armies that perform some functions that
would otherwise fall to the SADF. As nominally
separate political entities, the homelands have their
own budgets and technically raise their own revenues.
However, the impoverished homelands actually rely
on subsidies subsumed under the Foreign Affairs
component of the South African budget. According to
Foreign Minister Pik Botha, Pretoria provided nearly
$1.5 billion in subsidy payments to the independent
homelands in 1987/88. We estimate that nearly $280
million was used for military purposes. Similarly, the
South African Police, which are independent from the
SADF but have extensive paramilitary capability,
received a separate allocation of $750 million in the
1987188 budget
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The pressing need for new aircraft, missiles, and
armor will require an arms production effort that will
result in an unprecedented use of South Africa's
industrial capacity. Sophisticated weapons systems
are usually manufactured from hundreds of different
kinds of industrial metals and materials. Although
South Africa appears to have the appropriate diversity
within its manufacturing sector to support arms pro-
duction, most of the manufacturing capabilities are
geared to producing mining equipment and consumer
goods. The reliance of Armscor on private suppliers
that are not wholly dedicated to producing arma-
ments, in our view, will markedly boost the production
costs of South Africa's defense industries.
The relatively small size of the manufacturing sector
is probably the critical factor that will push up
production costs significantly and press Armscor to
continue its search for outside suppliers of advanced
parts and equipment.' Although South Africa's manu-
facturers may have the know-how to produce the
components, the scale of the domestic market makes
the costs of producing a small number of sophisticated
weapons extremely high. Armscor officials publicly
admit as much when they say that imported parts are
(b)(3) still used because of their lower cost.
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South Africa's defense industry will increasingly have
to compete with other government budget items for
scarce resources. Because of its high-priority, spend-
ing on defense to date has not suffered any significant
cuts. However, South Africa's ability to develop and
complete expensive projects such as a new fighter
aircraft, which are always subject to cost overruns,
may be limited for financial reasons during the next
few years. This would be particularly likely if the
economy continues to grow only modestly as a result
of stagnant export revenues, due in part to sanctions.
South Africa's manufacturing sector is much smaller than those of
other weapons-producing nations. Manufacturing output is $200
billion in West Germany, $120 billion in France, $100 billion in the
United Kingdom, $90 billion in Italy, $30 billion in South Korea,
but only $13 billion in South Africa. (All figures are in 1986 US
dollars.)
15
Outlook and Implications
Armscor's development over the past 20 years has
given Pretoria arms self-sufficiency only in a limited
sense. South Africa has the capability to produce the
weapons, ammunition, and equipment needed to
maintain internal security and to fight a guerrilla war
directed against South Africa or to support one
against most of its neighbors. The South African
military, however, clearly does not have the weaponry
to match a sophisticated and well-armed opponent.
Pretoria often boasts that its well-trained personnel
can compensate for deficiency in military equipment.
Recent events in Angola, however, suggest that, un-
less South Africa is threatened directly, Pretoria
probably would not be willing to suffer the political
costs associated with heavy white casualties. As a
result, we believe that Armscor will continue to try to
develop advanced weapons systems that would allow
Pretoria to maintain a military edge while minimizing
combat casualties.
We believe that South Africa's defense industry will
be hard pressed to produce advanced aircraft, mis-
siles, armor, and electronics systems. Few countries
other than the United States and the USSR have been
able to build successfully the range of weapons sys-
tems South Africa needs. Armscor may be able to
jumpstart the process by buying, borrowing, or steal-
ing the plans for an advanced combat aircraft or
missile system, but it still will have to manufacture
components�such as jet engines or electronic guid-
ance systems�that it has never successfully produced
and may not be able to finance.
We therefore expect Pretoria�despite its desire for
self-reliance�to redouble efforts to circumvent the
UN arms embargo and obtain foreign assistance for
its defense industry. South Africa will almost certain-
ly succeed in acquiring some material and technology
from abroad.
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Armscor
and Israel's defense industries continue to maintain a
well-established relationship. We believe Armscor will
also probably find some other willing partners, as the
potential loss of lucrative markets in the Persian Gulf
encourages arms manufacturers in other countries to
look for new customers. South Africa's need for
modern, sophisticated weapons and equipment, will-
ingness to pay premium prices, and ability to operate
discreetly could make it an attractive market for some
arms dealers.
Nevertheless, we doubt that foreign assistance will be
sufficient for South Africa to acquire, develop, or
produce state-of-the-art military equipment. Even un-
der the best of circumstances, Pretoria will almost
certainly remain a step behind in military technology,
in large part because those few countries capable of
providing highly advanced equipment will be deterred
by the UN arms embargo and the political risks of
dealing with a pariah state. Wholly indigenous pro-
duction of a new generation of fighter aircraft, for
example, will almost certainly exceed Armscor's capa-
(b)(3) bilities
to come. South African military planners could even-
tually find their options limited, however, by a neigh-
bor's acquisition of significant advanced weaponry,
particularly from the Soviets. Moreover, the effort to
maintain military superiority will carry economic
opportunity costs, particularly if�as seems likely�
Pretoria continues to fund the defense budget at the
expense of socioeconomic programs that are intended
to defuse the country's racial crisis.
The United States, in our judgment, will have little
direct influence over South Africa's weapons develop-
ment efforts. Given Washington's compliance with
the UN arms embargo, the South Africans are unlike-
ly to ask for direct US military assistance, except in
the most dire circumstances, because of Pretoria's
expectation that the United States would demand far-
reaching racial reforms in return. In our view, any
significant leverage that the United States may have
over South Africa's weapons projects would stem
from US influence over those allies and other arms
exporters who might supply South Africa with tech-
nology, equipment, tools, and parts.
We believe that Pretoria's weapons development pro-
gram will enable South Africa to maintain relative
superiority over most of its neighbors for some years
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