World Military Spending Out Does Anything Else

As detailed further on the next page on military expenditure, world military spending has now reached one trillion dollars, close to Cold War levels.

As summarized from the Military Balance, 2000/2001, by the International Institute for Strategic Studies (October 2001), for the larger arms-purchasing nations each year:

• Arms procurement is normally 20-30% of their military budgets
• The main portion is usually on operations, maintenance and personnel
• Some 40 to 50 billion dollars are in actual deliveries, (that is, the delivery of sales, which can be many years after the initial contract is signed)
• Each year, around 30-35 billion dollars are made in actual sales (agreements, or signing of contracts).

Arms sales figures

Every year, the U.S. Congressional Research Service releases a report looking at arms transfers to the developing world. The 2006 report is titled Conventional Arms Transfers to Developing Nations, 1999-2006 . These reports are also known as the Grimmett Report, after the author, Richard F. Grimmett. They provide insight into where the arms are going. The following breakdowns are based on this report.

Breaking down worldwide numbers

Arms Sales By Supplier Nations

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• As a Table

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As tabular data

Arms sales (agreements), by Supplier, 1999-2006 (in billions of constant 2006 U.S. dollars)

Supplier	Total Sales in US Dollars	Percent of total sales
Source: Richard F. Grimmett, CRS Report for Congress; Conventional Arms Transfers to Developing Nations, 1999-2006 . September 26, 2007 Notes: Percentages are rounded; Each country shown as follows: developing countries industrialized countries If you are viewing this table on another site, please see http://www.globalissues.org/Geopolitics/ArmsTrade/BigBusiness.asp for further details and context.
United States	123.543	39%
Russia	54.316	17%
France	26.915	8%
United Kingdom	17.628	6%
Germany	16.073	5%
China	10.860	3%
Italy	6.506	2%
Other European	40.649	13%
Others	20.274	6%

Note about the data

The report typically follows the trends of major arms suppliers, but also notes the increase in participation of other non-traditional suppliers, such as Israel, Spain, Sweden and Ukraine, and adds that “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.”

The general data on worldwide arms sales are only reflected in current US dollars, and does not convert them into constant dollars for the latest year available (2006), which would help eliminate the distorting effects of US inflation and permit a more accurate comparison of various dollar levels over time. Data shown above therefore reflects the major arms suppliers. The report itself has more details and includes ranks of main non-major suppliers, but only in current dollars.

The report also adds that, “These [non-major] arms suppliers also are more likely to be sources of small arms and light weapons, and associated ordnance, rather than routine sellers of major military equipment. Most of these arms suppliers are not likely to consistently rank with the traditional major suppliers of advanced weaponry in the value of their arms agreements and deliveries.” (p. 8)

As such, the breakdowns of suppliers in the Grimmet Reports typically include the major suppliers with non-major suppliers grouped. In a given year, some of the non-major suppliers may sell more than the lower-end major suppliers, but the top 5 are fairly consistently the largest suppliers.

Arms Sales Trends 1999-2006

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As tabular data

Arms sales (agreements), 1999 to 2006, (in billions of constant 2006 U.S. dollars)

Year	Total Dollars	Percentage of total
Source: Richard F. Grimmett, CRS Report for Congress; Conventional Arms Transfers to Developing Nations, 1999-2006 . September 26, 2007 Notes: Percentages are rounded; Each country shown as follows: developing countries industrialized countries If you are viewing this table on another site, please see http://www.globalissues.org/Geopolitics/ArmsTrade/BigBusiness.asp for further details and context.
1999	43.372	14%
2000	45.587	14%
2001	35.720	11%
2002	32.063	10%
2003	31.685	10%
2004	41.710	13%
2005	46.322	15%
2006	40.305	13%

Developing nations are top recipients

The Grimmett Report also notes that,

• Developing nations continue to be the primary focus of foreign arms sales activity by weapons suppliers.
• Major purchases continue to be made by a select few developing nations in these regions, principally China and India in Asia, and Saudi Arabia in the Middle East.
• The strength of individual economies of a wide range of nations in the developing world continues to be a significant factor in the timing of many of their arms purchasing decisions.
• Increases in the price of oil has been good for major oil producing states in funding their arms purchases, but has led to many oil consuming states deferring or curtailing new weapons purchases, sometimes opting for upgrades instead.

Top recipient developing nations

The top ten developing nation recipients of arms sales accounted for just under two-thirds of the total developing nations arms market between 2003 and 2006:

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Arms sales (agreements) by the Leading Recipient Developing Nations, 1999-2006 (in billions of current U.S. dollars)

Rank	Country	Amount spent	Percent of total
Source: Richard F. Grimmett, CRS Report for Congress; Conventional Arms Transfers to Developing Nations, 1999-2006 . September 26, 2007 Note: Percentages are approximate. If you are viewing this table on another site, please see http://www.globalissues.org/Geopolitics/ArmsTrade/BigBusiness.asp for further details and context.
1	India	22.4	11.0
2	China	17.4	8.0
3	Saudi Arabia	16.4	8.0
4	Egypt	13.3	6.0
5	U.A.E	12.5	6.0
6	Israel	10.9	5.0
7	Pakistan	10.9	5.0
8	South Korea	6.7	3.0
9	South Africa	6.1	3.0
10	Singapore	4.0	2.0
11	Rest of developing countries	89.8	43.0

What is sold?

The Grimmet Report describes items counted in the weapons categories (p.90) as follows:

Tanks and Self-propelled Guns:

This category includes light, medium, and heavy tanks; self-propelled artillery; self-propelled assault guns.

Artillery:

This category includes field and air defense artillery, mortars, rocket launchers and recoilless rifles — 100 mm and over; FROG launchers — 100mm and over.

Armored Personnel Carriers (APCs) and Armored Cars:

This category includes personnel carriers, armored and amphibious; armored infantry fighting vehicles; armored reconnaissance and command vehicles.

Major Surface Combatants:

This category includes aircraft carriers, cruisers, destroyers, frigates.

Minor Surface Combatants:

This category includes minesweepers, subchasers, motor torpedo boats, patrol craft, motor gunboats.

Submarines:

This category includes all submarines, including midget submarines.

Guided Missile Patrol Boats:

This category includes all boats in this class.

Supersonic Combat Aircraft:

This category includes all fighter and bomber aircraft designed to function operationally at speeds above Mach 1.

Subsonic Combat Aircraft:

This category includes all fighter and bomber aircraft designed to function operationally at speeds below Mach 1.

Other Aircraft:

This category includes all other fixed-wing aircraft, including trainers, transports, reconnaissance aircraft, and communications/utility aircraft.

Helicopters:

This category includes all helicopters, including combat and transport.

Surface-to-air Missiles:

This category includes all ground-based air defense missiles.

Surface-to-surface Missiles:

This category includes all surface-surface missiles without regard to range, such as Scuds and CSS-2s. It excludes all anti-tank missiles. It also excludes all anti-ship missiles, which are counted in a separate listing.

Anti-ship Missiles:

This category includes all missiles in this class such as the Harpoon, Silkworm, Styx and Exocet.

— Richard F. Grimmett, Conventional Arms Transfers to Developing Nations, 1999-2006 , A Congressional Research Service Report for Congress, September 26, 2007, p.90

As world trade globalizes, so does the trade in arms

Control Arms is a campaign jointly run by Amnesty International, International Action Network on Small Arms (IANSA) and Oxfam. In a detailed report titled, Shattered Lives, they highlight that arms are fueling poverty and suffering, and is also out of control.

As the report notes further:

The lack of arms controls allows some to profit from the misery of others.

• While international attention is focused on the need to control weapons of mass destruction, the trade in conventional weapons continues to operate in a legal and moral vacuum.
• More and more countries are starting to produce small arms, many with little ability or will to regulate their use.
• Permanent UN Security Council members—the USA, UK, France, Russia, and China—dominate the world trade in arms.
• Most national arms controls are riddled with loopholes or barely enforced.
• Key weaknesses are lax controls on the brokering, licensed production, and 'end use' of arms.
• Arms get into the wrong hands through weak controls on firearm ownership, weapons management, and misuse by authorised users of weapons.

— The Arms Bazaar, Shattered Lives, Chapter 4, p. 54, Control Arms Campaign, October 2003

The top five countries profiting from the arms trade are the five permanent members of the United Nations Security Council: the USA, UK, France, Russia, and China.

From 1998 to 2001, the USA, the UK, and France earned more income from arms sales to developing countries than they gave in aid.

The arms industry is unlike any other. It operates without regulation. It suffers from widespread corruption and bribes. And it makes its profits on the back of machines designed to kill and maim human beings.

So who profits most from this murderous trade? The five permanent members of the UN Security Council—the USA, UK, France, Russia, and China. Together, they are responsible for eighty eight per cent of reported conventional arms exports.

“We can’t have it both ways. We can’t be both the world’s leading champion of peace and the world’s leading supplier of arms.” Former US President Jimmy Carter, presidential campaign, 1976

— The Arms Industry, Control Arms Campaign, October 2003

The third world is often the destination for arms sales as the Control Arms Campaign also highlights graphically:

Source: http://www.controlarms.org/the_issues/movers_shakers.htm

© Control Arms Campaign

Industrialized countries negotiate free trade and investment agreements with other countries, but exempt military spending from the liberalizing demands of the agreement. Since only the wealthy countries can afford to devote billions on military spending, they will always be able to give their corporations hidden subsidies through defence contracts, and maintain a technologically advanced industrial capacity.

And so, in every international trade and investment agreement one will find a clause which exempts government programs and policies deemed vital for national security. Here is the loophole that allows the maintenance of corporate subsidies through virtually unlimited military spending.

— Stephen Staples, Confronting the Military-Corporate Complex, presented at the Hague Appeal for Peace, The Hague, May 12th 1999.

In order to make up for a lack of sales from domestic and traditional markets for military equipment, newer markets are being created or sought after. This is vital for the arms corporations and contractors in order to stay afloat.

Respect for human rights is often overlooked as arms are sold to known human rights violators with less regulatory measures in place.

Heavy militarization of a region increases the risk of oppression on local people. Consequently reactions and uprisings from those oppressed may also be violent. The Middle East is a current example, while Latin America is an example from previous decades, where in both cases, democracies or popular regimes have (or had) been overthrown with foreign assistance, and replaced with corrupt dictators or monarchs. Oppression (often violent) and authoritarianism rule has resulted. Sometimes this also itself results in terrorist reactions that lash out at other innocent people.

A deeper cycle of violence results. Arms trade may not always be a root cause, because there are often various geopolitical interests etc, but sometimes can be a significant contributor due to the enormous impacts of the weapons involved. Some countries are only too willing to use the War on Terror as a cover for their oppressive regimes, and are only too willing to accept new arms, as well.

This rush to globalize arms production and sales ignores the grave humanitarian and strategic consequences of global weapons proliferation. Already, profit motives in the military industry have resulted in arms export decisions that contravene such U.S. foreign policy goals as preserving stability and promoting human rights and democracy.

— Globalized Weaponry, Foreign Policy In Focus, Volume 5, Number 16, June 2000

It does not seem to matter who arms are sold to

Last year [2000] the U.S. controlled half of the developing world’s arms market…. This dominance of the global arms market is not something in which the American public or policy makers should take pride in. The U.S. routinely sells weapons to undemocratic regimes and gross human rights abusers.

— Uncle Sam World’s Arms Merchant Again; In 2000 U.S. Sells $18.6 Billion Worldwide, $12.6 Billion to Developing Countries, Arms Trade Insider—#53, Arms Trade Oversight Project, Council for a Livable World, August 20, 2001

As mentioned above, the “War on Terror” has seen the U.S. selling weapons or training to almost 90% of the countries it has identified as harboring terrorists. Yet, for decades, a lot of the arms that the West has sold has gone into the hands of military dictatorships or corrupt governments. This can have the additional intention or effect of hampering any form of democracy in those countries.

Sometimes, these arms sales are made secretly and sometimes, arms are sold to human rights violators (such as one third of all sales by the US, in 1998, as the previous link notes).

According to a report, from the Council for a Livable World’s Arms Trade Oversight Project, “[s]ince the end of the Cold War, the United States has been the world’s largest arms dealer … Consequently, governments with some of the worst human rights records [have] received American weapons and training.”

In November 2001, The Center for Defense Information, a military watch-dog in Washington D.C., provided a detailed list of the 18 countries and 28 terrorist groups cited by the U.S. State Department as hotbeds of terrorist activity. Included in the list is a chronology of U.S. arms sales and training from 1990-1999 and information on use of child soldiers by governments and non-state actors in each country. The U.S. supplied arms to a number of these nations:

In the period of 1990-1999, the United States supplied 16 of the 18 countries on the [U.S.] State Department list with arms through the government-to-government sales under the Foreign Military Sales (FMS) program, or through industry contracted Direct Commercial Sales (DCS) programs, or with military assistance. Recipients included Algeria, Iraq, Lebanon, and Sri Lanka …, where, arguably, the risk of diversion is high. In addition, the U.S. military (and the CIA) has trained the forces of many of these 18 countries in U.S. war fighting tactics, in some cases including individuals now involved in terrorism.

— A Risky Business; U.S. Arms Exports To Countries Where Terror Thrives, Center for Defense Information, November 29, 2001

Geopolitical and Economic Agendas

With the arms trade, governments and corporations can “cooperate” to meet their different political and economic agendas. The military industrial complexes of the powerful countries also help influence and shape foreign and military policies in a way that enhances their bottom line of profits. For governments though, selling arms can help other geopolitical and strategic interests. Consider, for example, the following:

• A number of years ago, the United States had agreed to sell 80 advanced F16s to the United Arab Emirates. The deal was estimated to be around $15 billion. In return, the US was to be able to build military bases there with improved access to the only deep-water port capable of housing carriers in the Persian Gulf. This led to concerns about the resulting stability in the region and the possibility of an arms race this could start with neighbors. It is of course hard to know if subsequent arms purchases in the region has been precisely because of this.
• Many US weapons are also sold to Turkey. These have been used against the Kurds, in what some have described as the worst human rights violations and ethnic cleansing since the second World War. The US turns a blind eye to these atrocities because they are able to set up bases in such a key geopolitical location, giving access to places in the Middle East, and because Turkey could be one of the main receivers of oil headed to Western countries, from the Caspian sea.
• There are also many arms trade-related interests in the Middle East. By having pro-US monarchies and other regimes (not necessarily democracies) at the helm and promoting policies that often ignore democracy and human rights, arms deals are often lucrative and help continue US foreign policy objectives.
• The British arms manufacturer, BAE was being investigated for bribing Saudi officials to buy fighter planes, but the government intervened in the investigation citing national interests. The Guardian also reported that BAE gave a Saudi prince a £75 airliner ($150m approx) as part of a British arms deal, with the arms firm paying the expenses of flying it. This seemingly large figure is small compared to the overall deal, but very enticing for the deal makers, and it is easy to see how corruption is so possible when large sums are involved.
• Furthermore, the Middle East is the most militarized region in the world procuring more arms than anywhere else. When combining authoritarian regimes and dictatorships, with arms sellers willing to sell weapons to those regimes, the people of the regions are often repressed, and this is a partial (not the only) explanation for why there is so much fanaticism and extremism. (That is, severe and extreme measures in governance and religion, etc has resulted in counter reactions that are also extremist. The majority of ordinary people that want neither of these extremities are the ones that pay the real price.)

As mentioned later in this web site’s section on arms trade, selling advanced weapons is often accompanied by the same sellers and the military industrial complex pointing out how the new world is getting more dangerous due to an increase in the sophistication of weapons. As a result, they inevitably recommend more research and development to stay ahead! This is a nice circular argument that also serves to keep the military industry in business, largely paid for by the tax payers. The Council for a Livable World’s Arms Trade project shows an example of this, in an article, where the title alone summarizes this situation quite well: U.S. in arms race with itself. The article describes how the U.S. Pentagon allows the U.S. Navy to export its newest jets. As a result, they note that:

A pattern is developing wherein U.S. weapons exports and new weapons procurement are driving each other.

• After, and occasionally even before, new weapons roll off the assembly line, they are offered to foreign customers.
• Each overseas sale of top-line U.S. combat equipment represents an incremental decrease in U.S. military superiority.
• This gradual decline in military strength spurs politicians, the military and the defense industry to press for higher military spending to procure increasingly sophisticated equipment superior to weapons shipped overseas.
• This latest technology is again offered to foreign customers, and the cycle begins anew.

— U.S. in arms race with itself, Council for a Livable World, Arms Trade Insider—#51, August 9, 2001 (Text is original, bulleted formatting it mine)

As another example, consider India. Since September 11, 2001, there has been even more volatility in terms of Muslim/Hindu relations, India/Pakistan/Kashmir tensions and other issues. As a result, India is seeking to increase their military spending, while arms dealers are only too willing to help both India and Pakistan. Furthermore, government officials from major arms dealing nations are major actors in attempting to see deals through, as there are obvious political dimensions.

The Financial Times in UK reported (February 27, 2002), that “While the international community calls for restraint on the Indo-Pakistan border, governments led by the UK and the US are jockeying as never before for a bigger slice of India’s growing arms budget.” Further, they also reported that, “Industry officials were unabashed in admitting that the current regional tension between the nuclear-armed neighbors is a unique selling opportunity.” (Emphasis Added).

One could point out that as a business an arms company’s main objective is to make profit so they can remain in business. However, for governments that host these arms industries, it would seem that security issues would be an important part of their foreign policy objective.

In that context then, when even very senior government officials are taking part in procuring contracts, it suggests that while this helps achieve economic objectives of arms firms, it doesn’t really address the issue of achieving political stability or not, or even if it is really a major concern as touted. For sure, it is no easy task for such governments because there can be powerful domestic interests and issues and concerns from related industry and other groups, who can argue that continuing to sell arms will help maintain or even create jobs, etc. (This is discussed in more detail a bit later in this section on propaganda for arms trade).

For example, in reference to India holding so-called talks with various governments on easing India-Pakistan tensions (while pitching for defense contracts), the same Financial Times report also points out that Jack Straw, Britain’s Foreign Secretary, is “also expected to use the opportunity to lobby for a Pounds 1bn (Euros 1.6bn, Dollars 1.43bn) deal to sell BAE Systems Hawk jets to India”. An official of no less stature than Foreign Secretary (somewhat similar to U.S. Secretary of State) is involved in “marketing” for a weapons company.

But it can go even higher than that. Yahoo world news quoted (February 22, 2002), Praful Bidwai, an Indian journalist and commentator who specializes on defense issues who commented on British Prime Minister, Tony Blair, “It’s disgraceful that Blair should have spent more than half his time in India [during his last visit] urging India to buy the jets.” (The sale of jets Bidwai is referring to is 66 British-made hawk jets, at a cost equivalent to US$1.4 billion.)

While public relations departments of such governments can say that their leaders are going on humanitarian or peace missions to urge some nations not to go to war, they are also selling arms at the same time, often to both parties. Geopolitically, this is “divide and conquer” still at work, while economically, this proves beneficial to the armament firms. Corrupt leaders of recipient governments are only too happy to take part as well.

Unfortunately, these are not isolated occurrence (nor is it usually even reported as sensational or questionable), as for a long time, public officials and leaders have been involved in such issues.

As an example of how long this has been going on, consider J.W. Smith’s research:

The forerunners of today’s corporate arms manufacturers (Krupp of Germany, Armstrong and Vickers of England, and others) were originally rejected by their governments and had to depend upon foreign sales for survival. They often furnished arms to both sides in conflicts and even to their own country’s potential enemies. Their practice of warning different countries of the aggressive intentions of their neighbors, who were supposedly arming themselves through purchases of the latest sophisticated weapons, yields a glimpse of the origins of today’s mythical missile gaps.

— J.W. Smith, World’s Wasted Wealth II, (Institute for Economic Democracy, 1994), pp. 223–224

It isn’t just the UK that appears to target each side. The World Policy Institute reports in its 2005 report about U.S. routinely funneling military aid and arms to undemocratic nations that, “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.”

And, as J.W. Smith adds,

Centuries of experience in the arms trade have matured into a standard procedure for farming the public treasures through arms sales. As the riches and most powerful country in the world, it is only logical that the United States is where the most money is to be earned procuring and selling arms. With each seasonal arms authorization and appropriation voted on in Congress, there are the predictably cadenced warnings of … dangerous gaps.… It was the recognition of this political control of public (and official) perception that led President Eisenhower to issue his stern warning to the American people in his farewell address: “In the councils of government we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military/industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.”

— J.W. Smith, World’s Wasted Wealth II, (Institute for Economic Democracy, 1994), p.225

A cycle of violence is a real concern. Though the arms trade may not always be a root cause, their impacts are of course significant. Some countries are only too willing to use oppression as the way to address problems, and are only too willing to accept new arms, as well. But the arms industry is also willing to help, while some governments may often encourage such regimes to purchase weapons from them, rather than from “competing” nations.

The Stockholm International Peace Research Institute (SIPRI) released a report about wars in 1997 that suggests progress had been made as the conflicts and their impact were less than previous years. But judging by events in recent years, we have a very long way to go before peaceful co-existence is realized and armed conflicts and expenditure are significantly reduced.

The UN has long called for a “creative partnership” with the arms industry saying that such an arrangement would help promote greater transparency, help curb illicit arms trafficking and ensure legitimate use of the purchased weapons. In some respects, this is would be a welcome step forward (as assuming a transition to a real world peace without arms and weapons etc seems highly unlikely, even though it is probably desired by most people.) The U.N. as well as various public groups are in essence pressuring governments of major arms producing and selling countries, to be more responsible and accountable for who arms are sold to and for what purpose.

However, it could be argued that it is under under such rhetoric, combined with the powerful lobbying of the military industries that governments can intentionally or unintentionally end up aiding military industrial complexes more than other governments. As a result, many are concerned that seeking “peace via war” is a questionable foreign policy to say the least. Indeed, military expenditure in major countries seem to be rapidly increasing, as we turn to next.

Government Military Budgets and Spending

The next page in this section discusses these numbers.