FPIF Column |
United States Rides Weapons Bonanza Wave
Frida Berrigan | November 16, 2006
Editor: Emily Schwartz Greco, IPS
|
|
|
|
 War, instability, and high oil prices have created a perfect storm of profit for the world's weapons manufacturers. This year, military analysts predict the biggest arms bonanza since 1993 … which is saying something because in the aftermath of the first Gulf War the global industry reaped the benefits of a $42 billion arms race.
As the world's largest producer and exporter, the United States is riding the wave. For fiscal year 2006, which ended on September 30, the U.S. Defense Security Cooperation Agency churned out notices for $21 billion in arms sales offers. In most cases, that agency is required to notify Congress of all potential major arms deals worth more than $14 million. In one typical day—September 28—the DSCA issued notification on $5.5 billion in agreements. South Korea would get $1.5 billion in Patriot missile equipment and other hardware, Turkey was offered a $2.9 billion package including 30 F-16 fighter planes, while Jordan and Chile were also offered weapons packages.
While not all deals are finalized with arms deliveries, these notifications are a way of taking the pulse of the weapons market … and it is racing. U.S. a rms sales offers for 2006 appear to be roughly twice the levels of any other year during the Bush administration. Noteworthy among these are the $5 billion deal for F-16s to Pakistan and a $5.8 billion agreement to completely re-equip Saudi Arabia's internal security force.
The Perfect Storm
In the case of Pakistan and other allies in the war on terrorism, sales are booming as sanctions and embargoes imposed because of human rights concerns or nuclear proliferation are being lifted. For Saudi Arabia and other oil-rich nations, the price at the pump (which topped $3 a gallon this summer) freed up cash for weapons. Finally, war in Iraq, Afghanistan, and in corners of the globe where the war on terrorism is being waged more quietly, allows foreign militaries to see some of the most advanced weapons systems in action. As one U.S. government source told The Times of London in August: “Conflicts act like a customer demonstration show and we tend to see an upsurge in sales because other countries [are] … impressed by what is available.”
This storm equals rainbows and pots of gold for the defense industry. For example, Lockheed Martin, the world's largest weapons manufacturer, stands to reap more than $11 billion in possible new offers. U.S. weapons companies may have patriotic slogans (Lockheed Martin's is “We Never Forget Who We're Working For”), but foreign sales mean the biggest bucks because they involve systems where research and development costs were covered by the Pentagon. Also, they are often accompanied by lucrative deals for accessories, spare parts, and eventual upgrades.
But, what means money in the bank for Lockheed Martin, Raytheon, and other defense corporations, often means misery where the weapons are shipped. Despite having some of the world's strongest laws regulating the arms trade, almost half of U.S. weapons end up in countries plagued with ongoing conflict and governed by undemocratic regimes with poor human rights records. According to analysis done by the World Policy Institute’s Arms Trade Resource Center, using Pentagon and State Department arms transfer figures, the United States provided countries in the developing world with more than $12.6 billion in arms in Fiscal year 2005. Of these 25 countries, all had human rights problems according to the State Department's Human Rights Report, and 10 (including three of the top five) were “undemocratic” in the sense that citizens of those nations “did not have a meaningful right to change their government” in a peaceful manner.
According to the Congressional Research Service’s “Conventional Weapons Transfers to Developing Nations” report, the United States led in global arms deliveries for the eighth year in a row. The United Kingdom trailed in second with $3.1 billion and Russia was a close third, at $2.8 billion in arms deliveries. Together, these three weapons exporters where responsible for almost 70% all arms delivered worldwide last year.
In late October, the United Nations began work on the Arms Trade Treaty, which is aimed at curbing arms transfers to major human rights abusers and areas of conflict. The treaty would also urge weapons suppliers to limit weapons sales likely to undermine development in poor nations. The United States was the only country to vote against the resolution, while 24 (including many other major weapons suppliers) abstained.
The General Assembly will take the next step, but without the active participation of the world's largest weapons producer and exporter, this important mandate will not be strong enough to counter the perfect storm of profiting from war.
FPIF columnist Frida Berrigan is a senior research associate at the New School.
|
|
|
|
Published by Foreign Policy In Focus (FPIF), a project of the Institute for Policy Studies (IPS, online at www.ips-dc.org). Copyright © 2008, Institute for Policy Studies.
Recommended citation:
Frida Berrigan, "United States Rides Weapons Bonanza Wave" (Silver City, NM and Washington, DC: Foreign Policy In Focus, November 16, 2006).
Web location:
http://fpif.org/fpiftxt/3715
Production Information:
Author(s): Frida Berrigan
Editor(s): Emily Schwartz Greco, IPS
Production: Chellee Chase-Saiz, IRC |
|
Latest Comments & Conversation Area
Editor's Note: FPIF.org editors read and approve each comment.
Comments are checked for content only; spelling and grammar errors are not
corrected and comments that include vulgar language or libelous content are
rejected. |
| |
| Name: |
Waverly de Bruijn |
Date: Nov 17, 2006 |
| Could the author elaborate on her quote stating that "Despite having some of the world's strongest laws regulating the arms trade, almost half of U.S. weapons end up in countries plagued with ongoing conflict and governed by undemocratic regimes with poor human rights records"? I'd be interested to hear what the "strongest laws regulating arms trade" are, and what they cover--domestic or international trade, production, marking and tracing, etc. Thanks |
|
| Name: |
Michael Hunter |
Date: Nov 20, 2006 |
Almost half of U.S weapons end up in different towns and cities of Iraq. This is contrary towards Condolleeza Rice's policy with North Korea.
Thanks,
Michael |
|
| Name: |
Bill Johnson |
Date: Nov 20, 2006 |
| Check out the critical comments section concerning the same great article at: http://www.informationclearinghouse.info/article15677.htm |
|
| Name: |
Bob |
Date: Nov 20, 2006 |
| Frida should get her facts straight. She states:
"As the world's largest producer and exporter, the United States is riding the wave ..."
The U.S is not the largest exporter of arms. That honor falls to Russia. In fact the U.S. comes in third. To quote from an AP article:
"According to a study by the U.S. Congress, the United States is no longer the world's largest supplier of arms to developing countries. Russia and France are now the world's leading arms exporters. The U.S. share of the weapons market dropped from 35 to 20 percent." U.S. profits from arms sales to developing countries has dropped by 3 billion dollars since 2004. One of the main causes of the drop was improved sales to China and India by both Russia and France. Weapons sales to Iran, whose economy was boosted by higher high oil prices, also helped propel Moscow into the position of the world's leading weapons exporter. "
|
|
| Name: |
Leon Rozmarin |
Date: Nov 20, 2006 |
| This information-numbers Frida Berrigan gives in the report are suprising. Russia has registered on the average well over $5 billion in arms sales per year over the last 3-4 years, including around $5.7-6.1 billion last year...and this year it is expected to sell over $ 6 billion. Where does Ms. Berrigan get the numbers hse is putting in the article?
Hopedale, Massachusetts
|
|
| Name: |
Frida Berrigan |
Date: Nov 21, 2006 |
| Thanks for your question, Waverly. I was refering to the 1976 Arms Export Act and the Foreign Assistance Act.
The 1976 Arms Export Control Act stipulates that arms transfers can only be used by the recipient nation for self-defense, internal security, and in United Nations sanctioned operations. The Foreign Assistance Act of 1961 bars military aid and arms sales to countries that demonstrate “gross and consistent” patterns of human rights abuses. And the Export Administration Act, passed in 1979, regulates the sale of “dual-use” items that could have civilian or military application.
These laws are strongly worded, but seldom strongly enforced. |
|
| Name: |
Frida Berrigan |
Date: Nov 21, 2006 |
I stand by my research, my views, and my statement that the United States is the largest producer and exporter of weapons. What's more, the data backs me up. I do make an attribution error, which I explain below.
The questioner cites an AP story quoting a “study by the U.S. Congress.” The study is the Congressional Research Service's November 2006 “Conventional Arms Transfers to Developing Nations 1998-2005,” which is the same report that I used as a source for my article.
CRS asserts: “In 2005, the United States led in arms transfer agreements worldwide, making agreements valued at nearly $12.8 billion (28.9% of all such agreements).” And: “In 2005, the United States ranked first in the value of all arms deliveries worldwide, making nearly $11.6 billion in such deliveries or 45.6%.”
CRS researcher Richard Grimmett provides data on both arms agreements and deliveries. As I discuss in my piece, not all agreements become deliveries, and so I focus on the smaller number that measures arms deliveries.
The confusing thing is that the data also backs up the Associated Press and the questioner's narrower take on the picture of global arms transfers. The Congressional Research Service also asserts that the United States is not first is in “arms transfer agreements with developing nations.”
But, that is not the measure I was using. Instead, I cited the transfers (as opposed to agreements) from the United States to the world, not just to “developing nations.”
Where I was in error is citing the CRS material for my assertion that: “The United States provided countries in the developing world with more than $11 billion in U.S. arms last year. Of these 25 countries, all had human rights problems according to the State Department's Human Rights Report, and 10 (including three of the top five) were “undemocratic” in the sense that citizens of those nations “did not have a meaningful right to change their government” in a peaceful manner.”
While my facts are correct, they do not come from CRS. My source for that fact of “more than $11 billion” is the Pentagon's 655 report where I took “Foreign Military Sales” arms deliveries to all countries, subtracted the totals for “developed” nations, and added it to the “Direct Commercial Sales” totals (also subtracting “developed” nations as defined by Grimmett). The Grimmett report defines developing nations as all countries except the United States, Russia, European nations, Canada, Japan, Australia, and New Zealand.
According to CRS, as the questioner points out, deliveries to the “developing world” total closer to $6 billion. But, we are struggling with an apples and oranges problem. The Grimmett report is useful in that it has comparative analysis and is done every year. But he understates commercial sales data and uses the calendar year instead of the fiscal year, making it difficult to line up with the data issued by the Pentagon and State Department. Based on some of our complaints about commercial sales data in particular, the State Department has pulled its report on commercial sales from the web to reconsider its recent data.
|
|
| Name: |
Mike Jones |
Date: Mar 04, 2007 |
In the US most of all there weapons turn up gone or stolen; this is because the iraqies take them so there would be less for the army to use
Thanks,
Mike |
|
| Discussion for this article has been closed. |
| |
Contact FPIF's webmaster with inquiries regarding the functionality of this website.
Copyright © 2008, Institute for Policy Studies.
|
|
|
|
