From: Subject: [ttssuf] U.S. Arms Sales not Affected by Global Slowdown
http://thefastertimes.com/defensespending/2009/11/09/us-arms-sales-not-affec ted-by-global-slowdown/ U.S. <http://thefastertimes.com/defensespending/2009/11/09/us-arms-sales-not-affe cted-by-global-slowdown/> Arms Sales not Affected by Global Slowdown November 9, 2009 Daniel Darling <http://thefastertimes.com/about/?u=danieldarling> In its annual <http://www.fas.org/sgp/crs/weapons/R40796.pdf> report on conventional arms transfers released in September, the Congressional Research Service (CRS) took note that the value of global arms sales dipped by 7.6 percent in 2008 to $55.2 billion. However, in contrast to the declining overall global arms market, American defense-producers signed new weapons contracts worth $37.79 billion; this represented an almost 35 percent rise from the previous total attained in 2007. The countries with the next-largest total of arms agreements were Italy ($3.7 billion), followed by Russia ($3.5 billion). Of the total arms transfer agreements signed by the U.S. with other countries $29.6 billion were with what the CRS categorizes as developing nations. The chasm between the leading arms-selling nations widened further in 2008 due to the recessionary wave that washed across the globe. The gap became particularly acute as the U.S. firmly clung to its position as dominant provider to the Middle East - a region rich in energy revenues coupled with a penchant for procuring defense articles. The disparity between the three leading vendors in 2007 shows the degree to which the U.S. separated itself from the rest of the defense providers in 2008. During 2007 the total of transfer agreements attained by the U.S. ($24.7 billion) was followed by Russia ($10.5 billion) and the United Kingdom ($9.8 billion), indicating that while still the leading arms merchant by a healthy margin, the gap between Washington and its nearest competitors was somewhat less pronounced. Despite the efforts of Russia, France and the U.K. to increase their arms sales in order to support domestic defense industries and broaden revenue streams, the U.S. remains far and away the leading global arms supplier. >From 2001 through 2008 the U.S. delivered $90.9 billion worth of armaments to countries across the globe, while the next closest, Russia, provided its clients with less than half that total at $38.4 billion. Last year the U.S. delivered $12.23 billion worth of military-related hardware worldwide. That figure was greater than the next four largest arms exporters - Russia ($5.4 billion), Germany ($2.9 billion), the U.K. ($2 billion) and China ($1.4 billion) - combined. Though sales of new-build platforms often get the most attention, it is the required support for those systems once they are in service with the buyer that feeds a continuous profit-making enterprise for the delivering nation. After the purchasing party begins utilization of a new batch of jet fighters, armored vehicles, naval frigates, etc, these defense items often can remain in service for 30 years, making provision of maintenance, spare parts and upgrades a necessity. Modern weapons systems - particularly combat aircraft and warships - are designed and produced with complex technologies requiring constant upgrades. After-sales support, therefore, goes hand-in-hand with initial purchase. Because of the constant work-share and continuous revenue inflow stemming from large arms sales, suppliers are eager to insert their wares into a new market and maintain their hold. Often the sales pitch will resonate from the highest echelons of power, as seen in the case of the premature announcement of the French Rafale combat aircraft in Brazil <http://www.flightglobal.com/articles/2009/09/11/332109/brazil-continues-fx- 2-competition-backtracks-on-rafale.html> 's fighter competition. That announcement was made after a personal appeal <http://www.bloomberg.com/apps/news?pid=20601086&sid=ab9jjDAD5VEY> by French President Nicolas Sarkozy to his Brazilian counterpart, Luiz Inacio da Silva, on behalf of Dassault Aviation. During the Cold War, the U.S. and former Soviet Union used arms sales to shore up alliances and cement regional power. Since that time the U.S. has leaned on arms sales as a means of reassuring strategic partners of American political support and ensuring interoperability between American and allied forces. While the U.S. and Western Europe have benefited from the fall of the Soviet Union - which opened up Eastern Europe to new suppliers, Russia has been the victim. In order to absorb the loss of its former Warsaw Pact base, Russia has scrambled to lock down past Soviet clientele such as Syria <http://www.upi.com/Business_News/Security-Industry/2009/09/15/Russia-seeks- Mideast-arms-sales-boost/UPI-89011253044464/> and Vietnam <http://www.cdi.org/russia/272-14.cfm> , while at the same time cultivating new customers in Venezuela <http://www.worldpoliticsreview.com/article.aspx?id=4311> and Iran <http://csis.org/files/media/csis/pubs/pm_0427.pdf> . It has also leaned heavily on its key export markets of China and India in order to sustain its defense industrial base, thus making the push by India to diversify its source of supply worrisome for Moscow <http://www.ipcs.org/article_details.php?articleNo=2902&cID=4> . The U.S., meanwhile, can count on sustained sales from its vast client book spanning the globe. Its customers not only include the Europeans, but strong military markets such as Turkey <http://www.dsca.mil/PressReleases/36-b/2009/Turkey_09-44.pdf> , Israel, Taiwan, South Korea, Japan and Australia. The U.S. also stands to reap long-term benefits from the major military reclamation project in Iraq, whose government requested nearly $16 billion worth of arms and services from the Pentagon during the course of 2008. Most important for U.S. arms-selling interests during the current period of economic malaise is the dependence of the oil-rich Middle Eastern nations on the American supply chain for sale and support of advanced weapon systems. By locking down the Middle Eastern market the U.S. is able to withstand periods such as the present one in which a recession causes buyer-nations to scale back their defense ambitions. Buffeted by years of healthy energy sales and sovereign wealth funds, the Gulf Cooperation Council (GCC) nations are able to move ahead with purchases of expensive new platforms, such as the nearly $7 <http://www.dsca.mil/PressReleases/36-b/2008/UAE_08-19.pdf> billion acquisition by the UAE of the Terminal High Altitude Air Defense (THAAD) system via the Pentagon's government-to-government Foreign Military Sales (FMS) program. A package of FMS deals <http://www.armscontrolcenter.org/policy/iran/articles/arms_deal_falls_short /> worth $20 billion put forth by the former Bush administration in 2007 helps ensure that the GCC countries will remain continual defense customers of the U.S. So long as the U.S. has a wide-range of security agreements with other countries and maintains strategic interests across the globe it will have a host of dependent clients providing work-share for its domestic defense industrial base. The latest CRS figures show that U.S. arms transfer agreements with the world have continued to grow from 2004, expanding by 66 percent through 2008. According to a recent Pentagon announcement <http://www.fas.org/programs/ssp/asmp/externalresources/2009/DSCA_Directors_ Blog_%20Record_High_Foreign_Military_Sales.pdf> , FMS figures through fiscal year 2009 (ending September 30th) reached a record $37.9 billion - 467 percent more than the low-water mark of $8.1 billion tallied in 1998. Put simply, an American arms-sale slowdown ensuing from delayed reaction to the global recession has yet to metastasize. Instead the U.S. remains the locomotive powering the global arms train and will continue to serve as such through the foreseeable future. *** exposing the hidden truth for further educational research only *** CAVEAT LECTOR *** In accordance with Title 17 U.S.C. 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