‘Military spending may not be the most strategically rational approach to a country’s security threats, but it is, in the end, at least driven by security concerns.’
In reality, it is precisely this largely erroneous belief that muddies the water in most arms trade and procurement debates, and provides the cover for all sorts of completely unnecessary military equipment to change hands between producers and buyers for a whole host of other less rational reasons.
The unfortunate truth is that the arms trade is not primarily geared to dealing with security threats. Instead, many arms transactions are undertaken for a plethora of other reasons, and may, in fact, hinder a state’s response to security threats rather than increase preparedness.
ECONOMICS AND THE POWER OF POLITICS
One of the most commonly stated reasons for arms transactions is that they are supposed to generate a whole series of economic benefits. Indeed, in some cases, arms sales are justified entirely for their economic benefit, rather than their importance for national defense. In certain countries these supposed economic benefits become the means by which arms producers place pressure on politicians to support strategically questionable projects: no politician wants to attack a project that may employ large numbers of their constituents, even if the money could theoretically be more efficiently spent elsewhere. Combined, these two reasons can be decisive in securing support for sometimes clearly absurd expenditure.
Changes to US trade policies will mean that a significant percentage of items previously on the Munitions List will now be able to be exported without a license. Some may be small items—bolts and nuts—but there are enough big-ticket items to be worrying: military cargo planes as well as Black Hawk helicopters, for example. Freeing up these items makes it ever easier for groups that may be anathema to the US to get hold of once heavily controlled items.
The danger of the administration’s new export control approach is that it could make it easier for significant military articles to reach major human rights abusers, countries seeking nuclear weapons, or destinations where they may be more likely to fall into the hands of terrorists.
Ironically, and despite the widespread support for deregulation amongst defense companies, there is the real risk that the reforms may lead to a net decrease in US defense industry jobs. This crystallizes the other unfortunate truth: often the economic benefit that is being touted is, in reality, a boon to the major companies but a bane to its employees, and even the wider population.
The threat of shedding defense jobs—and incurring the wrath of the powerful defense lobby—is a particularly important motivation in countries that manufacture and buy their own arms. But those countries that import most of their weapons—the large majority of the world—are often seduced by a different economic incentive: Offsets.
Offsets are agreements on the part of weapons manufacturers to invest in the economy of the buying countries, thus ‘offsetting’ the economic cost of importing the weapons. Offsets are particularly prevalent in the arms trade, despite the fact that they are hugely controversial. Part of this is because the defense trade is given a free pass when it comes to offsets. Using offsets as a selection criterion is banned by the World Trade Organization, except in the defense trade. The result, especially over the previous decade, has been an explosion in the number and size of offset deals. According to The Economist, it is estimated that the total offset obligations (the amount companies are still obliged to invest) in the global defense and aerospace industries is in the region of $250bn, and may grow to a remarkable $450bn by 2016.
CORRUPTION AND BUYING GLOBAL POLITICAL SUPPORT
It is a regrettable reality that the content of many weapons deals around the world are largely, and sometimes solely, determined by corruption. In particular, countries may be induced into buying particular types of equipment, even if better alternatives exist, regardless of the strategic implications of following this path.
In 2006, the consultancy company Control Risks conducted an extensive survey of 350 international businesses situated in numerous jurisdictions around the world. They found that, over the previous five years (2001‒2006), 26% of defense companies they interviewed believed that they had lost contracts due to corruption. In 2006 alone, 31% of defense companies interviewed believed that graft was a decisive factor in who won contracts. This suggests that in a significant number of cases what weapons are bought, who supplies them and what capacities are eventually delivered to armed forces is determined by bribes rather than whether the product itself is the best fit for the security needs of the country.
When corruption is mixed with other imperatives, when security concerns are not the main driving force of weapons buying, the result is entire weapons transactions conducted without apparent reference to a rational case for defense needs.
It is not just individual deals that are questionable: a large number of the most notoriously corrupt defense establishments in the world do not seem to buy arms for their countries’ national protection, but largely to cement important strategic relationships around the world. The simple fact is that by buying weapons systems from one of the major weapons sellers, even the most outrageously dictatorial governments are guaranteed a friendly reception amongst their supplier countries.
The mixture of factors that underlie defense transactions, local and international political concerns, economic goals, misplaced national pride and corruption, has the effect that weapons sales often don’t serve much strategic need. More importantly, it can leave defense forces with inadequate weaponry when they are forced into combat roles, or, in certain instances, a telling lack of strategic capacity.
Defending the arms trade by claiming that it is legitimate to arm oneself and one’s allies may seem like a reasonable proposition, but it is frequently a red herring. The reason: when weapons are bought and sold, they are often chosen for a range of reasons that have nothing to do with strategic need. There is a dizzying array of reasons why many arms deals are done, including anticipated economic benefit, local and international political considerations and, disturbingly frequently, corruption. Sometimes the outcome is the selection of weapons systems that may not meet a strategic need exactly, when a better option is available. In others, it can lead to a weapons purchase that meets no identifiable strategic need at all. The end result is that military spending is often strategically questionable at best; farcical, criminal and dangerous at worst.