Offset – the compulsory inward investment imposed on foreign defence suppliers by a purchasing government – is tolerated as a feature of the market rather than embraced. Tolerance of offset has become increasingly important over the last ten years. Since 1999, 22 countries have introduced formal offset legislation or policies. The scope of offset obligations is also increasing in terms of both the quota required by the buyer and the range of contractors obligated. This helps to explain why the European Commission (EC) and the US Department of Commerce (DoC) view offset as legally and commercially problematic.

By George Friedman

Financial panics are an integral part of capitalism. So are economic recessions. The system generates them and it becomes stronger because of them. Like forest fires, they are painful when they occur, yet without them, the forest could not survive. They impose discipline, punishing the reckless, rewarding the cautious. They do so imperfectly, of course, as at times the reckless are rewarded and the cautious penalized. Political crises — as opposed to normal financial panics — emerge when the reckless appear to be the beneficiaries of the crisis they have caused, while the rest of society bears the burdens of their recklessness. At that point, the crisis ceases to be financial or economic. It becomes political.