deep cuts

Special Report: Aviation: Drone Sales Flourish in a Time of Austerity

The use of unmanned drones for surveillance and targeted anti-guerrilla strikes has recently been a focus of ethical and political controversy.

Yet for all the criticism, and at a time when austerity budgets are causing deep cuts in orders for manned combat, transport and tanker aircraft, drone builders are thriving.

For defense planners and military strategists, the multiple mission capabilities of drones, their sophisticated technologies and their suitability for unconventional warfare gives them a clear edge over manned aircraft programs, which increasingly look like a holdover from Cold War planning.

Ranging in size from hand-launched reconnaissance units for urban combat to giant experimental solar-powered surveillance craft intended to remain aloft for as long as five years, drones, formally known as unmanned aerial vehicles, or U.A.V.’s, are not cheap, but they are increasingly ubiquitous.

David Kilcullen, a counterinsurgency adviser who worked with Gen. David Petraeus of the U.S. Army in Iraq and Afghanistan, said 70 nations were already involved with drones in some fashion.

Michael Richter, head of aerospace and defense investment banking for the investment bank Lazard, in Los Angeles, said the U.S. budget sequestration law would cut U.S. defense spending to $551 billion next year from $587 billion this year, with a further fall in prospect to $505 billion in 2015 and 2016.

Still, cybersecurity and drone programs are likely to be relatively resistant to cuts because of their perceived critical importance, he said.

U.S. drones already in operational use include the hand-launched AeroVironment RQ-11 Raven, effectively a flying camera that provides support for troops in close combat, and the Northrop Grumman RQ-4 Global Hawk, which can be programmed to operate almost autonomously, without a land-based controller. The Global Hawk can take off from California, fly across the United States to map the state of Maine, and then return to California.

More familiar to the public because of high-profile strikes against Al Qaeda and other targets are General Atomics’ MQ-1 Predator and MQ-9 Reaper.

Development programs include the Northrop Grumman X-47B, an experimental carrier-based combat drone. The program took a step forward recently with a catapult launching from the U.S. aircraft carrier George H.W. Bush, following successful on-shore tests of landings using arresting wires.

Micah Zenko, a fellow at the U.S. Council on Foreign Relations, said he expected that armed drones would be capable of carrying out carrier-based missions five years from now.

Another high-technology venture is Boeing’s Solar Eagle research program, slated to start testing next year and intended to develop an aircraft that could stay airborne for up to five years.

Philip Finnegan, director of corporate analysis at Teal Group, an aerospace consulting firm based in Fairfax, Virginia, said he expected the 2014 U.S. budget to propose reductions in existing drone programs in favor of “next generation systems, stealthier, with more power, and capable of operating autonomously if jammed by opponents.”

Among major competitors to the U.S. drone makers, Mr. Finnegan lists Israeli companies — in some cases working with Indian partners — and Brazilian programs aimed at that country’s need to patrol far-flung jungle borders and a long Atlantic coastline.

Also emerging as future competitors, in Mr. Finnegan’s view, are Turkish Aerospace Industries; Denel, the South African state-owned aerospace and defense technology group; and some Chinese companies.

In the more traditional field of piloted military aircraft, some new players are aiming at niche segments with substantial long-term potential. A case in point is Embraer, of Brazil, which is adding both conventional military and unmanned flight capabilities to its core commercial aviation business. On the conventional military front, its KC-390 twin-jet tactical airlift and tanker plane is scheduled to make its first flight by the end of 2014, with entry into service planned for 2016.

Article source: http://www.nytimes.com/2013/06/17/business/global/drone-sales-flourish-in-a-time-of-austerity.html?partner=rss&emc=rss

Egypt’s Economy Slows to a Crawl; Revolt Is Tested

The 18-day revolt stopped new foreign investment and decimated the pivotal tourist industry. The annual growth slowed to less than 2 percent from a projected 5 percent, and Egypt’s hard currency reserves plunged 25 percent.

In a region where economic woes enraged an entire generation, whether and how Egypt can fix its broken economy will be a crucial factor in determining the revolution’s success. It could also influence the outcome of the revolts across the Arab region, where economic troubles are stirring fears of continued instability, authoritarian crackdowns, or even a backlash against what had appeared to be a turn toward Western-style market reforms.

“People are angry,” said Hassan Mahmoud, a resident of a slum near Cairo. He expected a better life after the revolution, he said, but instead he was laid off from his $10-a-day job in a souvenir factory. “People in the neighborhood are talking about going back to the streets for another revolution — a hunger revolution,” he said.

With Egypt’s first open election this fall, the challenge of meeting public expectations while nursing the economy back to health has prompted a wide-ranging debate over radically divergent proposals. They include deep cuts to the bloated government work force and vast public subsidies, a leftist re-expansion of the state’s role in the economy, and the Muslim Brotherhood’s plan to impose a 7.5 percent income surtax on all Muslims to fulfill their religious mandate to give to charity. Non-Muslims would not be required to pay — a distinction that could reinforce sectarian resentments.

The Western powers are scrambling to address the growing sense of crisis by pledging a total package of $20 billion in assistance to the revolutions in Egypt and Tunisia, including debt forgiveness as well as loans from the World Bank and International Monetary Fund.

The challenge is steep. The revolution has inspired new demands for more jobs and higher wages that are fast colliding with the economy’s diminished capacity. In an indication of the desperation, the government said soon after the revolution that it would add 450,000 temporary jobs to the public payroll; an extra seven million people applied, said Ahmed Galal, a prominent Egyptian economist.

Samir Mohamed Radwan, the interim Egyptian finance minister, recently told the BBC that in his current job he felt “like a prisoner.” With European travelers still fearful of post-revolutionary disorder, only stray cats paw the trinkets in the stalls of Cairo’s ancient market. Tourism, which accounts for more than 10 percent of the economy, has plummeted by 40 percent, officials say.

Strikes by workers demanding their share of the revolution’s spoils continue to snarl industry, and business executives say the demands are becoming self-defeating. “We increased wages after the revolution, and a month later the workers went on strike again and asked for even higher wages,” said Moataz El Alfi, chief executive of Americana, which runs fast-food restaurants here.

“They beat up the human resource manager, and we had to close down the factory,” he said. “Everyone is jumping on the revolutionary wave and trying to reap extra benefits,” he added, “and it’s become chaos.”

Others say the drive to root out corruption has frozen business activity. “The main sources of capital in this country have either been arrested, escaped or are too afraid to engage in any business,” said Ahmed Habib, 29, a construction executive.

“Many of the contractors in Egypt obtained land by corrupt deals with contracts filled with question marks,” he said. “The government halted most projects to be restudied, and the banks stopped lending.”

Article source: http://feeds.nytimes.com/click.phdo?i=d5acd55014874877423cd042f6d1e636

Special Report: Aviation: Drone Sales Flourish in a Time of Austerity

Egypt’s Economy Slows to a Crawl; Revolt Is Tested

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