Friday, July 28, 2006

Worldwide Conventional Arms Sales

A comprehensive summary on conventional arms sales can be found in a Congressional Research Service Report called “Conventional Arms Transfers to Developing Nations, 1997-2004”.[1]

According to the report, between 1997 and 2004, total amount of arms delivered worldwide was $312 billion (in constant 2004 dollars).[2] In 2004 alone it totaled $35 billion.

The US is the world’s biggest arms supplier, with over 50% share, or $18.6 billion in 2004. This is the eight year in a row that the US has led in global arms deliveries. Russia ranked second, making $4.6 billion in such deliveries. France ranked third, making $4.4 billion in such deliveries. The UK ranked fourth, making $1.9 billion in such deliveries. These top four suppliers of arms in 2004 collectively delivered over $29.5 billion, or almost 85%of all arms delivered worldwide by all suppliers in that year.

Developing nations continue to be the primary focus of foreign arms sales activity by weapons suppliers. In 2004, the value of all arms deliveries to developing countries was $23 billion (the highest since 2000), making up over 60% of all arms transfers. The U.S. has a long-standing policy of arming, training and aiding some of the world's most repressive regimes.

In 2004, the United States ranked first in the value of arms deliveries to developing nations at nearly $9.6 billion, or 42.6% of all such deliveries. Russia ranked second at $4.5 billion or 20% of such deliveries. France ranked third at $4.2 billion or 18.7% of such deliveries. The UK ranked fourth with $1.3 billion or 6% of such deliveries.

And who was the major recipient in 2004? Saudi Arabia. Other countries that are always in top 10 over the past 8 years are the UAE, Egypt, Israel, Pakistan and India.

When we focus on the US arms deliveries[3] by region for 2004, we see the following picture:

Top 4 in World, $6.5 billion (Japan, Egypt, Israel, S. Arabia)
Top 4 in Africa, $30 million (S. Africa, Nigeria, Kenya and Ethiopia)
Top 4 in Near East, $4.5 billion (Egypt, Israel, S. Arabia and UAE)

Arms sales agreements show similar structure as the arms deliveries. Between 1997 and 2004, conventional arms transfer agreements (which represent orders for future delivery) to developing nations comprised 62.7% of the value of all international arms transfer agreements, which was $152 billion. In 2004, this share was 59%. This, however, is not complete picture. It excludes arms transfers by any supplier to sub national groups. Also, a precise detail is not available. Because, current U.S. law and regulations do not require U.S. companies to provide, routinely and systematically, data on arms sales agreements actually concluded with foreign purchasers resulting from commercial licenses authorized by the U.S. State Department.

Note that the United States is the only major arms supplier that has two distinct systems for the export of weapons: the government-to-government Foreign Military Sales (FMS) system, and the licensed commercial export system.

Based on DOD sales and purchase contract data, FMS averaged $12.6 billion in the past five years. In FY2005, DOD FMS reached $13.8 billion. In FY 2000, it stood at $11.1 billion.[4]

The US administration is required by Congress to prepare an annual report known as the "Section 655" report, which provides the most detailed official accounting available of specific US weapons systems exported or licensed for export to governments or private buyers around the world. The Pentagon and the State Department each prepare their own portion of the Section 655 report. All sales and grants of military equipment and training administered by the DoD's Defense Security Cooperation Agency are included in the Pentagon's section, including foreign military sales. The State Department is in charge of direct commercial sales (DCS); its section includes only DCS licenses authorized, not actual weapons deliveries.

Direct Commercial Sales[5] Authorizations for Fiscal Year 2005 by the State Department shows the aggregate dollar value and quantity of defense articles and defense services authorized to each foreign country. During Fiscal Year 2005 approximately $24.3 billion in licenses were authorized the export of defense articles.

“In Fiscal Year 2005, we authorized the export of $28 billion in defense services, compared with $29.5 billion in defense articles,” says John Hillen, Department of State Assistant Secretary for Political-Military Affairs.

There is indeed no clear cut between FMS and commercial sales. A Comparison of Direct Commercial Sales and Foreign Military Sales for the Acquisition of U.S. Defense Articles and Services is given in the Appendix of DICAM’s online Green Book

The Departments of State, Commerce and Defense are all involved in different aspects of approving licenses and managing logistics, and if necessary loaning or granting funds to nations as they seek weapons from US corporations.

In CRS report it is mentioned that “The U.S. Congress must be notified of all cases for which the Directorate of Defense Trade Controls intends to issue an export license for the sale of any defense articles or services which meet or exceed the statutory dollar value thresholds established in the Arms Export Control Act (AECA). This notification requirement applies to proposed FMS cases as well as direct commercial sales. The AECA requires that Congress be provided a total of thirty days notification prior to the authorization to export by either FMS or direct commercial sale any major defense equipment valued at $14 million or more.”

What about the arms sales below $14 million then? Most probably they are counted in deliveries statistics, but surely not in arms agreements.

The Irony

What an irony that top US arms clients are the countries in developing world which are designated by the State Department’s Human Rights Report to be either undemocratic regimes or governments with records of major human rights abuses.

In fact a World Policy Institute special report[6] summarizes this irony perfectly:

“Perhaps no single policy is more at odds with President Bush’s pledge to "end tyranny in our world" than the United States’ role as the world’s leading arms exporting nation. Although arms sales are often justified on the basis of their purported benefits, from securing access to overseas military facilities to rewarding coalition allies in conflicts such as the wars in Iraq and Afghanistan, these alleged benefits often come at a high price. All too often, U.S. arms transfers end up fueling conflict, arming human rights abusers, or falling into the hands of U.S. adversaries. As in the case of recent decisions to provide new F-16 fighter planes to Pakistan, while pledging comparable high-tech military hardware to its rival India, U.S. arms sometimes go to both sides in long brewing conflicts, ratcheting up tensions and giving both sides better firepower with which to threaten each other. Far from serving as a force for security and stability, U.S. weapons sales frequently serve to empower unstable, undemocratic regimes to the detriment of U.S. and global security.”

According to the Federation of American Scientist Arms Sales Monitoring Project “Since 1990, the United States has exported more than $152 billion worth of weapons to states around the world. Many of these sales have been to repressive and/or unstable governments.”

However, some really believe[7] that “US arms exports support a wide variety of clearly beneficial activities and programmes, including peacekeeping, search and rescue operations and disaster relief.”

But fortunately there are some others who are much smarter and focus on the facts, instead of making a republican propaganda. “Weapon makers annually receive about $30 billion in research and development funds and approximately $7 billion in subsidies for exports. The US government grants or loans are also used to pay for U.S. weapons….While the U.S. government does provide subsidies to farmers and other industries, the level of general support for weapon exports is unparalleled….All that does not consider that weapons are dangerous commodities, and that increasing their export poses risks to international peace and security.[8]

Careless arms exports is also inconsistent with the proclaimed US national security and foreign policy goals. You arm the world, and those arms are used to kill you and others. The US government still has not grasped that arms are not like flowers.

The U.S. government cannot be a self-proclaimed leader of democracy and human rights while at the same time arming governments that repress their own citizens. Nor can it effectively ask other exporting states to refrain from sales that threaten U.S. interests (such as the alleged Russian sales of GPS jamming equipment to Iraq or Israeli AWACs to China), if it is simultaneously reducing its export controls or increasing sales that pose a risk to regional security.[9]

And today the whole world is witnessing what Israel is doing with the arms they bought from the US, financed with over $2 billion US military aid each year. An army with conventional arms is fighting with a group owning small arms. (small arms will be the topic of my next post). Who will benefit? Surely, arms sellers. At the end, both sides will certainly buy more arms in the future. Also, Israel will maybe achieve its aim which I posted a week ago.

[1] Richard F. Grimmett, “Conventional Arms Transfers to Developing Nations, 1997-2004”, CRS Report for Congress, # RL33051, August 29, 2005. The values of arms transfer agreements (or deliveries) in that report refer to the total values of arms orders (or deliveries) which include all categories of weapons and ammunition, military spare parts, military construction, military assistance and training programs, and all associated services.
[2] Unless stated otherwise I only quote the figures in constant 2004 dollars.
[3] Richard F. Grimmett, “U.S. Arms Sales: Agreements with and Deliveries to Major Clients, 1997-2004”, CRS Report for Congress, # RL33217, Foreign Affairs, Defense, and Trade Division, Congressional Research Service, December 29, 2005. See, Defense Security Cooperation Agency data as of September 2005 on US Foreign Military Sales. Also see Foreign military sales data by country in Latin America.
[4] Briefing to Senate Committee on Armed Services, Defense Trade Data, GAO-06-319R, US Government Accountability Office, 27 January 2006.
[5] Direct Commercial Sales: Transfers negotiated between the manufacturing company and the foreign buyer, and approved by the Department of State through the issuance of an export license. Data covers licenses authorized, not actual weapons deliveries.
[6] Frida Berrigan and William D. Hartung, with Leslie Heffel, U.S. Weapons at War 2005: Promoting Freedom of Fueling Conflict? U.S. Military Aid and Arms Transfers Since September 11, World Policy Institute. June 2005.
[7] Matt SCHROEDER, Transparency and accountability in arms export systems: the United States as a case study, United Nations Institute for Disarmament Research.
[8] Tamar Gabelnick and Rachel Stohl, “Challenging Conventional Wisdom: Debunking the Myths and Exposing the Risks of Arms Export Report”, Federation of American Scientists and Center for Defense Information, accessed in June 2006.
[9] ibid.

see you where parallels intersect.


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