Yesterday was the 300th anniversary of the Battle of Poltava, the famous battle between Swedish and Russian armies led by Charles XII and Peter the Great, respectively. It was a crushing defeat for Charles: unable to return to Sweden, the king would wind up spending the next five years in exile in Turkish Moldavia; captured by the Russians, his second-in-command spent the next nine years as a POW. More generally, the battle is generally considered the end of Sweden's bid for world power status, and the rise of Russia’s.
Sweden as a world power may seem a bit far-fetched, but Sweden has significant influence worldwide, striving to “punch above its weight” for a country of just nine million people. Even during the Cold War, when Sweden worked to build defenses to ward off the Warsaw Pact without joining NATO, successive governments in Stockholm kept troops abroad on peacekeeping duties as part of their commitment to collective security. During the Congolese Civil War (1961–64), the Army and Air Force even engaged in relatively heavy combat. The relatively centrist government in Stockholm today may not be looking for fights overseas, but it is keen to build more capability for this sort of work.
After all, despite the recent unpleasantness in the Caucasus, the Russian threat is generally considered to have subsided, so the emphasis in Baltic security has necessarily shifted towards increased overseas commitments. The peace dividend is being applied not just to relatively lower military spending, but to opportunities to enforce and keep the peace further abroad. In Sweden, in the UK, in the US, and throughout the world, this is necessarily leading to different priorities in spending and patterns of industrial structure. This week saw two notable developments in Sweden along these lines:
- Patria’s armored vehicle sale to the Army. The FMV selected Patria’s AMV as the 8x8 meant to equip battalions of the Swedish Army meant for overseas service. BAE Systems Hägglunds is laying off 300 staff as a result. Dagens Industri reported yesterday that the head of the business unit at BAE that control Hägglunds sent a rather nasty letter to Prime Minister Reinfeldt, going as far as to question whether the company "would continue to invest in or have a presence in Sweden in the wake of the lost order." (That's the translation from the English-language paper in Stockholm).
- Saab’s offer of a 50-50 partnership in Brazil. Saab has had meaningful export success with its Gripen in South Africa, Hungary, the Czech Republic, Thailand, and the UK (at the Empire Test Pilot School). It is still chasing opportunities in Switzerland, the Netherlands, and elsewhere. India and Brazil, however, are the big prizes. In pursuing Brazil, Saab recently offered to shift up to half of Gripen production there—today’s Brazilian aircraft industry, after all, is impressive, if only for Embraer.
The lesson from Sweden this week is indeed broadly applicable beyond the Baltic. In the UK, the Ministry of Defense has announced that it is unconcerned about where its armored vehicles are built, so long as they can be maintained and upgraded in Britain, and it controls the intellectual property behind them. The United States will remain an exception for some time—as The Hill reports this week, the US-UK Defense Trade Cooperation Treaty is still unratified two years after George W. Bush and Tony Blair signed it. Efforts to burden it with additional “oversight” provisions, however, have the feel of a rearguard action that is merely slowing the retreat. Russia will be Russia, and we are not predicting any sudden changes in German and Italian affection for local vehicle- and ship-building. But overall, the concept of dominating local markets by a Wal*Mart strategy—controlling a local asset too big to economically displace—is falling in utility.
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