Development in Adversity: South Africa’s Defence Industrial Participation in Perspective

Defence industrial participation (DIP) is a form of countertrade and falls in the sub-category of (defence) offsets. The South African DIP programme played a developmental role in the country’s defence industrial base (DIB), arresting its steady decline since the 1980s. This article discusses the perceived non-achievement of the 1997 DIP objectives and the reality of its manifestations over a 12-year period (2000–2012). It is argued that the DIP tripled the gross national product and improved the economy through the retention of some 58 000 jobs. However, the 2014 Defence Review paves the way for a new defence industrial dispensation. Notwithstanding, there is a need to explore the concomitant ambiguity that exists between perceptions of countertrade and offsets as trade-distorting practices and as value-adding prospects, and to ascertain how this reciprocal trade mechanism could be used better to promote the developmental aims and objectives of governments.