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New ways of thinking about the global arms industry: Dealing with ‘limited autarky’

By Richard A Bitzinger

This report attempts to explain why some countries produce arms on a limited scale, and what benefits they hope to accrue from that strategy.

Decisions to produce arms—even to engage in niche production—need to be continually evaluated and re-evaluated for their costs and benefits. Even if a nation only wants to pursue limited self-sufficiency, that can still be a high-risk, low-reward undertaking.

As Australia approaches a decision concerning its acquisition of a next-generation submarine, it faces several crucial questions, not least of which is whether to build this submarine in Australia or buy it off-the-shelf from a foreign supplier. The appeal of domestic production is very powerful; ‘security of supply’ is a compelling argument, as are the potentially huge economic benefits that could accrue from manufacturing such a large number of submarines at home. At issue, however, is whether such an approach makes sense from an objective cost-benefit analysis.