Rogue Planet

The Arms Trade Booms Amid Global Economic Woes

Tuesday, Oct. 14, 2008

By Vivienne Walt / Paris

Need to start a war? No problem. While stock markets gyrate and financial institutions (and even whole countries, like Iceland) teeter on bankruptcy, one global industry is still drawing plenty of high-end trades and profits: weapons.

In a Paris courtroom last week, 42 officials went on trial for taking millions in kickbacks and organizing huge arms commissions from the Angolan government during the mid-1990s. In the dock were such big names as Charles Pasqua, a former French Interior Minister; Jean-Christophe Mitterrand, the son of the late French President François Mitterrand; and Russian-Israeli billionaire Arkadi Gaydamak, who is currently a candidate for mayor of Jerusalem. The group is charged with having supplied almost $800 million worth of arms to Angolan President José Eduardo Dos Santos, including 12 helicopters, 6 naval vessels, 150,000 shells and 170,000 land mines.

The hardware came from the huge stockpiles of Soviet weapons left behind when the Soviet Union collapsed, and Dos Santos wanted it in order to crush the U.S.-backed Unita rebels during Angola's devastating civil war. (Dos Santos, who is believed to have made millions off the trades, won the war and is still in power.) The French businessman Pierre Falcone allegedly plied Angolan officials with tens of millions of dollars — some of it stuffed in suitcases — and deposited other sums of money in offshore accounts. Actor Nicolas Cage's character in the 2005 movie Lord of War was partly modeled on the alleged actions of Gaydamak, although the character may also have been inspired by the powerful Russian arms trader Viktor Bout, who is currently in a Thai jail awaiting the outcome of a hearing on a U.S. extradition request.

SIPRI Arms Transfers Data for 2007

SIPRI data shows drop in international arms deliveries, orders remain high

There was an 8 per cent drop in international transfers of major conventional weapons between 2006 and 2007, according to new data published today by the Stockholm International Peace Research Institute (SIPRI).

However, the drop in deliveries in 2007, welcome as it may be, follows 6 years of continuous increases. 2006 was the peak year for arms transfers over the past decade, and 2007 was a close second. With significant new orders for weapon systems arranged in 2007, particularly for the Middle East, South Asia and South East Asia, SIPRI Researcher Mark Bromley notes 'It is too soon to say whether we're seeing the start of a new declining trend in arms transfers or just a blip.'

The data are included in SIPRI's online Arms Transfers Database, http://armstrade.sipri.org/. An updated version of the Database, covering all international transfers of major conventional weapons from 1950 to the end of 2007, is published today (Monday, 31 March 2008). Other notable developments revealed by the new data include:

* A 62 per cent drop-off in arms imports by China hit Russia particularly hard. According to SIPRI Researcher Dr Paul Holtom, 'With no new contracts for big-ticket aircraft or ships in 2007, this may be the beginning of the end for the high-volume of arms transfers from Russia to China.'

* Despite a 15 per cent drop in its arms exports between 2003 and 2007, Russia holds on to its position as the world's second-largest arms supplier, behind the USA. Between 2003 and 2007, the top five suppliers - the USA, Russia, Germany, France and the UK - together accounted for 80 per cent of international arms exports.

* The United Arab Emirates and Israel have both increased their long-range strike capabilities significantly since 2003. Both countries have imported US F16 fighter aircraft - Israel around 85, the UAE around 70 and the UAE also imported 62 French Mirage fighters armed with cruise missiles.

* Venezuela increased its arms imports dramatically in 2003-2007, taking it from the 56th biggest importer in the world in 1998-2002 to the 24th. Some 92 per cent of Venezuela's imports came from Russia.

* In 2003-2007, Sudan received 87 per cent of its major conventional weapons from Russia and 8 per cent from China. Some of the aircraft imported from these countries were deployed in Darfur in contravention of UN Security Council Resolution 1591. The government of Chad used arms newly imported from Belgium and Switzerland in this period in combat against rebel forces.

* According to SIPRI Arms Transfers Project Leader, Siemon Wezeman, ‘Given growing international concerns with regional conflicts in Africa, the Middle East and South America, the SIPRI data confirms a troubling lack of restraint by both arms dealers and importers active in these regions -- this will further complicate efforts aimed at building stability in these parts of the world.’

[sipri.org]

Military Expenditure and Arms Trade: Alternative Data Sources

Abstract:
Analysis of the economic impact of military expenditures and arms trade is frequently hampered by the limited amount of transparent, comprehensive data. Country-specific information can be supplemented, however, by data from multicountry statistical sources. This paper describes seven publications which provide multicountry statistics on military expenditure and trade--the information each source conveys, as well as the differences in coverage and definition--to assist the analyst in understanding how to use this data. Comparisons of the data reported by the various sources reveal numerous, significant differences, particularly in data on military expenditures.

Military Expenditure and Arms Trade (.pdf file)

Conventional Arms Transfers to Developing Nations, 1999-2006

This report is prepared annually to provide Congress with official, unclassified, quantitative data on conventional arms transfers to developing nations by the United States and foreign countries for the preceding eight calendar years for use in its policy oversight functions. All agreement and delivery data in this report for the United States are government-to-government Foreign Military Sales transactions. Some general data are provided on worldwide conventional arms transfers by all suppliers, but the principal focus is the level of arms transfers by major weapons suppliers to nations in the developing world.

Full report can be found here.

Arms Trade Dips But Still Brisk in 2006

Despite reporting to the United Nations a collective decline in their global arms transfers in 2006, arms suppliers posted the third-highest tally for major conventional weapons exports in 15 years. Arms buyers and sellers also volunteered more information than in past years on their small arms and light weapons trade.

Seeking to shed greater light on worldwide weapons transactions with the goal of curbing dangerous arms acquisitions and buildups, governments in 1991 approved creation of a voluntary UN Register of Conventional Arms. The measure calls on countries to account annually by May 31 for their previous year’s exports and imports of battle tanks, armored combat vehicles (ACVs), large-caliber artillery, combat aircraft, attack helicopters, warships, and missiles and missile systems. Governments may also detail their complete holdings and domestic procurement of those weapons.

The annual reports tend to trickle in, and by mid-August, 93 countries had filed submissions on their 2006 arms trade. Typically, about 120 countries will report each year. A significant portion of these states do not actually export or import listed arms but instead file “nil” reports indicating no transactions. Fifty-two governments have made such reports covering last year.

Most major arms exporters regularly participate in the register, providing a general accounting of the global arms market, and this year is no different. Thirty countries have reported exports totaling almost 10,500 weapons. This sum is shy of the 2005 mark of nearly 12,000 exports but exceeds all other previous years’ totals except for that of 1992.

Russia's 'Semi-Transparent' Exports

Look for the UN to be using this as an example to support the Arms Trade Treaty's measures which require mandatory reporting of exports (Principle 5).

SEMI-TRANSPARENT EXPORTS
Alexei Nikolsky

HIGHLIGHT: Russia reports on arms sales in 2006; Figures for Russian
arms exports in 2006, as reported voluntarily to the United Nations
by Russia, have been released to the public. The previously-unknown
arms shipments on the list include a large quantity of aviation
rockets for China.

Figures for Russian arms exports in 2006, as reported voluntarily to
the United Nations by Russia, have been released to the public. The
previously-unknown arms shipments on the list include a large
quantity of aviation rockets for China.

Mikhail Barabanov, science editor at Eksport Vooruzhenii (Arms
Exports) magazine, says that UN member states are not obliged to
submit information to the UN Registry for Conventional Arms
Deliveries, and if they volunteer to do so, the information doesn't
have to be complete. Nevertheless, this source can sometimes
highlight some interesting details about the global arms trade - for
example, the accelerated rearmament of Georgia by NATO's East
European members and Ukraine.

Russia's information for 2006, as posted on the UN website last week,
shows that it supplied 30 T-90 tanks (models not specified) and ten
fighter jects (four MiG-29 and six Su-24) to Algeria; four Su-30 jets
to Venezuela; 60 BTR-80 armored venhicles to Bangladesh; two vessels
(destroyer and submarine) to China; 14 Mi-35 and Mi-17 helicopters to
Venezuela; and four helicopters to Sudan. These deliveries had been
reported earlier, although not in detail.

But some shipments had not been reported earlier: 100 heavy weapons
to Myanmar, and 944 rockets to China. A source close to the Defense
Ministry said that Myanmar received obsolete D-30 howitzers from
Russian army storehouses. A source from an aviation enterprise told
us that China received Moskit and Club anti-ship rockets, as well as
X-31, X-59, RVV-AE and R-73 aviation rockets, worth almost $1 billion.

Barabanov says that Russia has disclosed about $2.5 billion worth of
its total arms sales for 2006 ($6.46 billion). The Registry
information does not include air defense weaponry for China and Iran,
or deliveries to the Middle East. Konstantin Makiyenko from the
Center for Analysis of Strategies and Technologies says that the
secrecy is due to client requirements and the highly sensitive nature
of military technology cooperation with Middle East countries, which
might draw the West's displeasure. In Makiyenko's view, this is an
acceptable level of transparency, relative to other major arms
exporters. Russia is less transparent than the USA, where all major
arms deals must be reported to Congress, but more transparent than
China, which hasn't submitted any information to the Registry since 1995.

Source: Vedomosti, No. 199, July 2007, p. A2

2007 Failed States Index

Right up there with the NCAA Football pre-season rankings, NCAA Basketball March Madness brackets, and the NFL draft, RP analysts wait with nervous anticipation for the release of Foreign Policy's annual Failed States Index:

"Using 12 social, economic, political, and military indicators, we ranked 177 states in order of their vulnerability to violent internal conflict and societal deterioration. The index scores are based on data from more than 12,000 publicly available sources collected from May to December 2006."

Based on analyses of "Indicators of Instability" which include "Group Grievance", "Human Flight", and "Deligitimization of State" (like Vermont, for example), FP provides a list of the 60 countries where you might NOT want to retire to.  The Top 10 include:

1. Sudan
2. Iraq
3. Somalia
4. Zimbabwe
5. Chad
6. Ivory Coast
7. Democratic Republic of the Congo
8. Afghanistan
9. Guinea
10. Central African Republic

The full report is available on FP's website.

Top 100 Arms-Producing Companies of 2005

Looks like the boys over at SIPRI have been pretty busy lately, churning out even more marginally useful arms trade data.  This week's nugget of morning bathroom reading: the Top 100 Arms-Producing Companies of 2005 (also known as 'The Top 100 Places a Retired General Can Find Employment').  They also present the data in map form, to satisfy your deepest, darkest cartographic desires.

Looks like Ben & Jerry's fell off the list this year; a shame.

SIPRI Top 100 Arms-Producing Companies of 2005

Guns for Everyone

The Stockholm International Peace Institute (SIPRI) reports that 2006 global military spending reached $1.2 trillion, with the U.S. accounting for $529 billion, or 46 percent, of the total.

Following the U.S., but not even close in dollars, were the U.K., France, China, and Japan, who each accounted for 4-5% of the total.

Also of note: Eastern Europe (former Soviet Union states) accounted for the largest regional increase, where the military budget rose by 12% overall.

Major importers included China, India, Israel, Saudi Arabia, and the UAE.  The top five exporters of defense articles, in billions of dollars in sales, were:

1. USA  7.9
2. Russia  6.7
3. Germany 3 .9
4. France  1.6
5. UK  1.1

The increases in U.S. spending and exports are attributed to (go figure) the ongoing conflicts in Iraq and Afghanistan - including internal funds for the maintenance and replacement of equipment, as well as exports to train and equip the respective security forces. 

Between 9/11 and June 2006 the US Government has allocated a total of $432 billion in budgeted and supplemental funds for the War on Terror.

Interesting, but not surprising.  Look for China to gradually improve its spending ranking as it prepares for an all-out war against the combined forces of the world, the Galactic Trade Federation, and possibly a Death Star or two.

Want to Know Arms Transfers from Afghanistan to Zaire in 1951? Ask SIPRI.

The Stockholm International Peace Research Institute (SIPRI) has recently made available a fairly cool online database of arms transfers dating back to 1950.  Now you can spend endless fun-filled family evenings playing Arms Trade Jeopardy: 'The number of HAWK surface-to-air missile systems delivered to Iran by the US in 1985'.  Umm, what is 25?

SIPRI Arms Transfer Database