SHAUN LIEBENBERG has landed a tough job. After heading Grintek,
a South African defence and electronics company, he has taken
over the reins at Denel, South Africa's state-owned arms
manufacturer. The country's arms industry flourished under
apartheid when, because of sanctions, it had to supply the
government with all its military needs. But in a changed world
does it still make sense to encourage a local champion?  Denel
is on the brink of bankruptcy. Last year it increased revenues
slightly to 4.4 billion rand ($660m), but its losses ballooned
to almost 380m rand. Alec Erwin, the minister for public
enterprises, argues that Denel helps the economy at a time when
the country faces increasing peacekeeping demands on the
continent.  The government wants Denel to stand on its own feet
but remain in the public sector. This is part of a larger plan
to turn other state-owned enterprises not slated for
privatisation into “drivers of growth and development”. The
company, involved in all kinds of things—from soybean