Acquisition of inappropriate equipment

Nature

When capital is scarce, the purchase of new, technologically up-to-date equipment seems prohibitive if, alternatively, satisfactory 'second-hand' or obsolete equipment is available in working order at substantially lower cost. Common problems are that spare parts for the latter become increasingly unavailable, maintenance becomes prohibitively costly, and long-term investment costs may be higher than new equipment when both production run units of output and decreased labour productivity are considered. Additional disadvantages are the sometimes difficult transport, installation or adaptation costs; and a lack of manufacturer support, particularly as regards training. Broader issues involved in acquiring used or unwanted equipment concern the economic life of the machinery as further innovations may make it obsolete even at low wage rates, and the demand for the products made may dry up for a variety of reasons.

Incidence

Used or obsolete military equipment, which in relation to better equipped antagonists may be termed junk, has been provided to a number of countries by the super powers, such as by the USA to El Salvador in the case of Huey 66 helicopters.

Claim

The use of second-hand manufacturing equipment is not a solution to the search for more appropriate technologies. The induced availability of such equipment as part of development aid programmes, to the extent that they may be forced on some countries, is a dis-service to the recipients, and, in effect, may be a covert restrictive trade practice which ensures poor economic performance in sectors of the recipient countries.