Costs of War: Dollar Deals
By Shaun Waterman for ISN
The
external pagereport on the global arms bazaar is produced every year by the Congressional Research Service (CRS), a division of the Library of Congress, and is the most comprehensive publicly available collection of data on the topic.
The explosive growth of US arms sales is especially notable beside the general decline in arms sales last year. The value of all arms transfer agreements worldwide in 2008 was $55.2 billion, according to the report - a decrease of 7.6 percent from the previous year.
US sales accounted for $37.8 billion - 68.4 percent - of the 2008 total, a huge leap from $25.4 billion in 2007. The figure includes maintenance, service and upgrade deals on past sales as well as new business. The next largest arms merchant, Italy, ran what the report calls “a very distant second” with $3.7 billion in deals, or about 6.7 percent of the global trade. Russia ranked third, with deals worth $3.5 billion in 2008, down substantially from $10.8 billion in 2007. Collectively, these three nations made sales agreements valued at $45 billion last year, 81.5 percent of the entire international arms market.
The fall in global weapons sales last year is attributable to the “decision of some purchasing nations to forego the purchase of major systems due to budgetary considerations in the face of the severe international recession,” writes Richard Grimmett, the report’s author.
But the recession has not affected all potential customers equally. “Other prospective purchasers in the developing world with significant financial assets can continue to launch new and costly weapons-procurement programs, due to their wealth,” he writes, noting that increases in petrochemical prices have boosted the purchasing power of oil-producing states.
The vast majority of US sales - nearly $30 billion of the $37.8 billion total - went to developing countries, and unsurprisingly, the largest deals were with states in the Middle East. The United Arab Emirates paid more than $6.5 billion for a Patriot air defense missile system; Morocco paid $2.1 billion for 24 F-16 fighter aircraft; and Iraq bought 140 M1A1 Abrams tanks and 6 C-130 cargo aircraft for a total of $1.2 billion. There were also major US sales to India, Saudi Arabia, Egypt, South Korea, Taiwan and Brazil.
The UAE was the largest arms buyers in the developing world in 2008, spending $9.7 billion and nosing ahead of Saudi Arabia, which spent $8.7 billion, and Morocco, with $5.4 billion.
Among sellers to the developing world, Russia was far behind the US in 2008 with $3.3 billion, about 7.8 percent of the total market. Grimmett writes that while China and India continue to be Russia’s main clients, their latest focus is on new customers in Latin America, in particular Venezuela.
Arms deals are odd, hybrid transactions in the most heavily regulated market place of all. Though fulfilled by private sector corporations, the deals are negotiated by governments as acts of national policy - almost a kind of state capitalism.
During the Cold War, “providing conventional weapons to friendly states was an instrument of foreign policy utilized by the United States and its allies,” notes the report, adding this was also true for the Soviet Union and its allies. “Following the Cold War’s end, U.S. arms transfer policy has been based on assisting friendly and allied nations in developing and maintaining their ability to deal with regional security threats and concerns.”
The report notes that the US has built “an especially wide base of arms equipment clients globally” which, even in the absence of new business, provides “a continuing series of arms agreements annually, if only to provide upgrades, spare parts, ordnance and support services for the large variety of weapons systems it has previously sold.”
But the large number of states to which the US provides weapons does not just provide a steady revenue stream for the military-industrial complex and the guarantee that US allies will not be outgunned by its enemies or their surrogates. It provides one other major strategic advantage to the US, as well: the dependence of those clients on American goodwill to maintain and upgrade the high-tech systems they have bought.
Last week, discussing the attitude of Iraq’s Sunni-ruled neighbors toward US arms sales to the Shiite-led government in Baghdad, author and former CIA analyst Ken Pollack, a key supporter of the Bush invasion, said the US' Arab allies were enthusiastically in favor of such deals.
He said Arab leaders were urging the US to sell the Iraqis weapons system, up to and including the F-16 jet, “to make sure they (the Iraqis) are lashed as tightly to you as we are.”
“They know they cannot launch a military action without our permission,” he said
The explosive growth of US arms sales is especially notable beside the general decline in arms sales last year. The value of all arms transfer agreements worldwide in 2008 was $55.2 billion, according to the report - a decrease of 7.6 percent from the previous year.
US sales accounted for $37.8 billion - 68.4 percent - of the 2008 total, a huge leap from $25.4 billion in 2007. The figure includes maintenance, service and upgrade deals on past sales as well as new business. The next largest arms merchant, Italy, ran what the report calls “a very distant second” with $3.7 billion in deals, or about 6.7 percent of the global trade. Russia ranked third, with deals worth $3.5 billion in 2008, down substantially from $10.8 billion in 2007. Collectively, these three nations made sales agreements valued at $45 billion last year, 81.5 percent of the entire international arms market.
The fall in global weapons sales last year is attributable to the “decision of some purchasing nations to forego the purchase of major systems due to budgetary considerations in the face of the severe international recession,” writes Richard Grimmett, the report’s author.
But the recession has not affected all potential customers equally. “Other prospective purchasers in the developing world with significant financial assets can continue to launch new and costly weapons-procurement programs, due to their wealth,” he writes, noting that increases in petrochemical prices have boosted the purchasing power of oil-producing states.
The vast majority of US sales - nearly $30 billion of the $37.8 billion total - went to developing countries, and unsurprisingly, the largest deals were with states in the Middle East. The United Arab Emirates paid more than $6.5 billion for a Patriot air defense missile system; Morocco paid $2.1 billion for 24 F-16 fighter aircraft; and Iraq bought 140 M1A1 Abrams tanks and 6 C-130 cargo aircraft for a total of $1.2 billion. There were also major US sales to India, Saudi Arabia, Egypt, South Korea, Taiwan and Brazil.
The UAE was the largest arms buyers in the developing world in 2008, spending $9.7 billion and nosing ahead of Saudi Arabia, which spent $8.7 billion, and Morocco, with $5.4 billion.
Among sellers to the developing world, Russia was far behind the US in 2008 with $3.3 billion, about 7.8 percent of the total market. Grimmett writes that while China and India continue to be Russia’s main clients, their latest focus is on new customers in Latin America, in particular Venezuela.
Arms deals are odd, hybrid transactions in the most heavily regulated market place of all. Though fulfilled by private sector corporations, the deals are negotiated by governments as acts of national policy - almost a kind of state capitalism.
During the Cold War, “providing conventional weapons to friendly states was an instrument of foreign policy utilized by the United States and its allies,” notes the report, adding this was also true for the Soviet Union and its allies. “Following the Cold War’s end, U.S. arms transfer policy has been based on assisting friendly and allied nations in developing and maintaining their ability to deal with regional security threats and concerns.”
The report notes that the US has built “an especially wide base of arms equipment clients globally” which, even in the absence of new business, provides “a continuing series of arms agreements annually, if only to provide upgrades, spare parts, ordnance and support services for the large variety of weapons systems it has previously sold.”
But the large number of states to which the US provides weapons does not just provide a steady revenue stream for the military-industrial complex and the guarantee that US allies will not be outgunned by its enemies or their surrogates. It provides one other major strategic advantage to the US, as well: the dependence of those clients on American goodwill to maintain and upgrade the high-tech systems they have bought.
Last week, discussing the attitude of Iraq’s Sunni-ruled neighbors toward US arms sales to the Shiite-led government in Baghdad, author and former CIA analyst Ken Pollack, a key supporter of the Bush invasion, said the US' Arab allies were enthusiastically in favor of such deals.
He said Arab leaders were urging the US to sell the Iraqis weapons system, up to and including the F-16 jet, “to make sure they (the Iraqis) are lashed as tightly to you as we are.”
“They know they cannot launch a military action without our permission,” he said