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Article: Military barter. (countertrade proposals on big arms sales)
- Article from:
- The Economist (US)
- Article date:
- July 16, 1988
CopyrightCOPYRIGHT 1988 Economist Newspaper Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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ALMOST every big arms sale these IN days has a countertrade clause. This obliges the foreign contractor to provide the purchasing country with economic benefits, such as investment, to offset part of the cost of the deal. Saudi Arabia has tried it twice in deals with Boeing and with British Aerospace-but has yet to reap benefits from either. That should now change. The new deal with BAe is expected to clear the way for up to a dozen British-Saudi joint ventures to start within a year.
The first two schemes were quite different from each other. In 1984 the Saudis insisted that bids for a defence-communications system should include a countertrade proposal. The $1.3 ...