Offsets in Public-Sector Procurement: Tools for Economic Development or Avenues for Corruption?
Offsets represent a valuable tool for success in international markets: (i) buyers see them as opportunity to use the offsets to either “jump start” or develop specific industries (mainly those dependent on technology and innovation); (ii) buyers use the offsets as tool for the large investments required for infrastructure and defence upgrades. From a seller’s perspective, offsets help companies open the door to markets that would not otherwise be available. Because local partners are often part of the discussion in infrastructure and defence-procurement, it is common for suppliers to propose offset agreements aimed at developing industrial relationships through joint production or development.