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 US$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 31, the US Defense Security Cooperation
Agency (DSCA)
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. US arms 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 terror", 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 freed up
cash for weapons. Finally, war in Iraq,
Afghanistan and in corners of the globe where the
"war on terror" is being waged more quietly,
allows foreign militaries to see some of the most
advanced weapons systems in action. As one US
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. US 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 US weapons end up in
countries plagued with ongoing conflict and
governed by undemocratic regimes with poor
human-rights records.
According to the
annual Conventional Arms Sales to the Developing
World released by the Congressional Research
Service in November, the US provided countries in
the developing world with more than $11 billion in
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.
This is the eighth year in a row that the
US has led in global arms deliveries. 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
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 US was
the only country to vote against the resolution,
while 24 (including many other major weapons
suppliers) abstained.
The UN 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.
