Corporate performance and military production in South Africa

With the end of the Cold War and apartheid, a process of demilitarisation a nd dramatic cuts in military spending has marked the transition to democrac y in South Africa. Between 1989 and 1997 the South African defence budget w as cut by more than 50% in real terms, with most of the cuts coming from th e. procurement budget, which was cut by nearly 70% in real terms during the same period. These cuts have had a significant impact on the country's def ence industrial base. However, there has been surprisingly little research on the changes to defence companies that have taken place since the late 19 80s. This paper makes a start at rectifying that deficiency by providing an analysis of the restructuring of the major defence-dependent companies ove r the period 1988-97. It uses a number of financial ratios and other measur es of corporate performance to compare their experience with non-defence co mpanies in the rest of the South African economy during the same period.