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Minister Gönül, stressing that petrol and the defence industry were the two most important matters in todays world, indicated that they attached importance and priority to the development of domestic industry in meeting the needs of the Turkish Armed Forces, had eliminated intermediaries in the purchase of arms and that he personally granted no interviews to any arms intermediaries.
With respect to the acquisition of the weapon systems required by the army and the renewal of weapons, a proficient domestic defence industry has come into being. Over and above this, sales have commenced of domestic industry defence systems that have been developed to the Middle East and to many countries such as Malaysia and Pakistan. The target of one billion dollars will be set for domestic defence industry exports in 2011.
We have done away with incentives
Gönül in his comments pointed to the considerable amount of bribery involved in major arms purchases and the way that this was done through the intermediary mechanism. Gönül alleged that the intermediary mechanism had previously worked as follows: The large arms dealers had sizeable consultancy and intermediary staff and bodies here consisting of retired colonels and generals. Arms companies allotted considerable shares of the profit to intermediaries and added the cost of these intermediary shares to the price of the weapons they sold. Of course, the intermediaries distributed a portion of the money they obtained to persons in influential positions with respect to the purchase of weapons systems by way of incentive! Gönül indicated that they had done away with this mechanism: The army has forbidden arms dealers and intermediaries from entering General Staff buildings.
Bayar gave the following information: Turkish Armed Forces needs are met centrally by the Undersecretariat. All requirements and tenders have been centralised. Research is conducted and projects are commissioned with respect to all manner of weapon and equipment requirements. Bayar says that: We act in accordance with the priority of the requirement. Apart from entirely domestic production, there is a whole host of options from joint manufacture, partial domestic manufacture and partial licence agreement manufacture to direct external purchase.
With external purchases and partnerships, Turkey imposes an offset agreement condition. This means that the vendor company purchases goods and services from Turkey in a certain proportion to the total price. The Ministry imposes the condition of purchase from defence and aviation industry in offset agreements. Large foreign arms companies have thus embarked on the manufacture of major components of the systems they produce in Turkey. Today dozens of domestic companies are manufacturing vital components for renowned American companies and are becoming proficient in this field.
Undersecretary Bayar explained that the total number of engineers working in domestic defence industry R&D exceeded the total number of R&D engineers working in other sectors in Turkey. Bayar explained that there was an increasing number of facilities capable of meeting defence needs entirely domestically and that these had attained a turnover of 6.2 billion dollars in the past five years. The following are included among such projects.
The National Tank Project is being run by Otokar; prototypes have been prepared, these will be entirely licensed domestically and mass production will commence in 2015. The Milgem-National Ship Project comprises warships developed under an entirely domestic design as well as national command control systems. Aselsans missile warning system is also used in the army. Medium and long range testing is being conducted into Roketsans anti-tank missiles.
Meanwhile, domestic industry will significantly enhance its proficiency as it begins to manufacture Atak helicopters. Apart from the Ataks engines, all components will be locally manufactured down to the service computers. Turkey is also a consortium member for the manufacture of the A400M transport aircraft. TUSAŞ is taking on a major role in the manufacture of this aircraft. Another consortium participation involves the manufacture of F-35 warplanes. Turkey will bring home 5-6 billion dollars worth of this production. In the matter of drone production, the stage has been reached in which the need for external purchase has been obliviated. Multipurpose aircraft manufactured by domestic industry have entered service with the army. Modernisation of tanks and F-16s is being conducted in our country, such that Turkey ranks among the few countries in the world where F-16 modernisation may be conducted.
The Undersecretariats goal for this year is to raise to 50% the domestic share in meeting defence requirements. Meanwhile, we have witnessed the defence industry sectors turnover rising to 2.3 billion dollars in 2009.