Management of Covid-19 Crisis at the Level of Defence Industry

Abstract

According to estimates and analyses by the international community of economic analysts, the medical crisis generated by the Covid-19 pandemic will induce a major economic and financial crisis worldwide which, in conjunction with the current geopolitical situation, characterized by a high degree of uncertainty (e.g. strategic economic confrontation between the US and China, the position of force adopted by the Russian Federation), will affect production and supply chains, amplify the phenomenon of the adoption of trade policies of a protectionist nature, and, indirectly, will significantly affect national defense budgets.

In this fluid geopolitical context, characterized by insecurity and systemic instability, a strategic rethink and recalibration of defence policies can be predicted in a new context, defined by the multipolar competition and the asymmetry of geopolitical geometry, the conflict between civilizational models (competition between democracy vs. autocratic/totalitarian political regimes), to the detriment of regional and international collective security arrangements.

Changing government priorities generated by the pandemic crisis generated by Covid-19 may lead to a reduction in budgets for military endowment programs. Most governments allocate about 2% of GDP annually to the defence sector. Given the pandemic generated by Covid-19, there is a risk that some states will significantly reduce the budget allocated to the defence industry in order to increase the budgets for health systems, given the need to expand hospitals, as well as the purchase of medical equipment and services.

In Romania, the topic of tools and opportunities that may be able to ensure the improvement of the effects and overcoming the economic crisis is currently being discussed through active economic measures, including in the field of the defence industry. In Romania, however, the path from debate to public policy and strategy assumed and applied is traditionally long and hard, requiring more pragmatism in addressing strategic economic issues.