Top Arms Dealers

Workers' Daily Internet Edition : Article Index :

Top Arms Dealers
Recent Trends in Military Expenditure
Eurosatory Arms Fair 2002

Trade Justice Mass Lobby of Parliament
Trade Justice Case Studies
GATS International Day of Action

COLOMBIA SOLIDARITY CAMPAIGN PRESENTS

Russia is the world's top arms dealer, passing the United States for the first time in 2001, according to a new report by the Stockholm International Peace Research Institute. Russia exported $ 4.97 billion worth of arms in 2001, with the United States delivering $ 4.56 billion worth, SIPRI said in its "Yearbook 2002: Armaments, Disarmament and International Security," made public on Thursday, June 13.

France was third, exporting $ 1.28 billion worth of arms last year, while Britain was fourth with $ 1.12 billion. Germany came in fifth with $ 670 million and Ukraine was sixth with $ 430 million.

The five-year moving average level of global arms transfers fell in the period 1997–2001. This is explained mainly by a reduction in deliveries by the US, which was the largest supplier in 1997–2001 despite a 65% reduction in its arms deliveries since 1998. Russia was the second largest supplier during this period. A 24% increase in arms transfers from 2000 to 2001 made Russia the largest supplier in 2001.

The value of arms exports differs from Russia's official figures. President Vladimir Putin said earlier this year that Russia had revenues of $ 4.4 billion in 2001. Some $ 3.7 billion worth of arms were delivered last year, Vedomosti reported.

Although the study was objective, Russian defence analysts said it does not reflect the real state of the arms market since the figures represent the military value of exported armaments and not the actual contract price. "For us, every weapon that is similar to another weapon has the same price value," SIPRI researcher Siemon Wezeman said by telephone from the Netherlands.

For example, according to SIPRI, Russia's MiG-29 and its more expensive US counterpart, the F-16, are comparable in value and have the same price in the report: $ 30 million.

"In reality, Russia is at No. 3 or No. 4 in dollar terms," said the Centre for Arms Control's Marat Kenzhetayev.

The United States should re-emerge as the No. 1 arms exporter in the coming years, Wezeman said. US deliveries of combat aircraft, which are of higher value, were tiny compared with Russian deliveries in 2001, but exports are expected to rise in the future, he added.

"The US has orders for a large number of combat aircraft, but this is for delivery in 2003. ... In 2002 Russia has a good chance of staying No. 1 again, mainly driven by these combat aircraft." Last year, Russia delivered an estimated 50 Sukhoi aircraft alone. Thirty Su -30MKK and 10 Su-27UBK went to China, while 10 Su-24 were delivered to Algeria, said Konstantin Makiyenko, deputy head of the Centre for Analysis of Strategies and Technologies. "These aircraft make up over half of arms deliveries in money estimates," he said.

China was by far the biggest arms recipient overall in 2001, and deliveries to China from all countries rose 44 percent from 2000 to $ 3.1 billion.

"China is one big client that is completely dependent on Russia for its arms imports," Wezeman said. "Without China, Russia would not be there." China mainly has purchased Russian aircraft over the last decade but is now switching to battle ships and air defence systems, Makiyenko said. These new purchases will help Russia keep its arms exports at the current rate of $ 3.7 billion in 2005 after a two-year slump that will begin next year as lucrative aviation contracts are fulfilled, he said.

"After 2005, there will be a radical fall to $ 1.5 billion to $ 2 billion unless the situation changes," Makiyenko said.

Russia is seeking new clients to keep up revenues, among them Brazil, where Russia expects to win a tender for fighter jets. Iran is also emerging as a big client.

Imports by India increased by 50%, making it the third largest recipient in 2001. The other major recipients in the period 1997–2001 were Saudi Arabia, Taiwan and Turkey.

Certain countries are prohibited from receiving arms, some because they are involved in armed conflicts. The United Nations continues to criticise the efficiency of arms embargoes.

The future supply of advanced major conventional weapons is affected by the uncertainty concerning the organisation of transatlantic production and trade, SIPRI report. Only Britain has been willing to participate fully and pay the cost of influencing Joint Strike Fighter (JSF) requirements. The cost of the highest form of participation in JSF development is said to be too high for most European countries.

Competition on the global arms market has strengthened new forms of marketing and transfer arrangements, according to SIPRI. Offset arrangements granted to the buyer may include military technology transfers in addition to the weapon system itself. Some arrangements involve transfers of military equipment from the buyer. In both cases offsets stimulate international military transfers.

World military expenditure has been increasing since 1998, after an eleven-year period of reductions (1987-98). The Stockholm International Peace Research Institute (SIPRI) Yearbook 2002 presents an estimate for world military spending in 2001 of 839 billion dollars (in current prices). This implies an increase of 2 per cent in real terms compared to the previous year. However, the SIPRI estimate for 2001 is based on data on adopted budgets. In most cases, these do not include supplementary spending as a result of the September 11 attacks on the United States and the subsequent war on terrorism. Therefore, actual world military expenditure in 2001 is likely to be significantly higher, when additional expenditures have been taken fully into account.

The increase in military expenditure since 1998 is the result of rising trends in most geographical regions. The only exceptions are Western Europe, where the increase has been very small, and Oceania where military spending was relatively constant between 1998 and 2001, but is beginning to rise in 2002. The regions with the strongest growth in military expenditure are Central and Eastern Europe, Africa, South Asia and the Middle East. These regions all had an aggregate growth of more than 25 per cent in real terms between 1998 and 2001. The reasons for the increase vary between the regions.

In Central and Eastern Europe the increase is the result of the recent trend in Russian military spending, which has a strong impact on the total for this region. Russian military expenditure began to increase in 1999 and has continued to increase since then. Provisional figures for 2001 have reached 1995 spending levels but are still only half the level of 1992. It was after 1992 that the most dramatic cuts in Russian military expenditure took place. In Africa the rise can be attributed almost entirely to domestic factors: internal armed conflict, threats of new conflicts and continuing modernisation. The continuation of the long-term increase in South Asia can largely be attributed to increases in the military expenditure of India and Pakistan, which dominate the trend for this region. In the Middle East, the increase can be interpreted as the result of several factors, including the Arab–Israeli conflict and the continuation of the armaments programme in Iran. In addition, in 2001 there were also major increases in the Gulf states, coinciding with a rise in oil revenues.

Total world military spending for 2001 of 839 billion dollars represents a significant proportion of world economic resources. As a global average it accounted for 2.6 per cent of world GDP and 137 dollars per capita. However, both economic resources and military expenditure are unevenly spread.

The 15 major spenders account for over three-quarters of world military spending. Five countries account for over half. The United States accounts for 36 per cent, followed by Russia with 6 per cent and France, Japan and Britain with about 5 per cent each. The 63 countries in Africa and Latin America together accounted for 5 per cent of world military spending in 2001.

High-income countries also have the highest per capita spending. In some of these countries, annual military expenditure exceeds 1000 dollars per capita. The countries with the highest defence burden, as measured by the share of military expenditure in GDP, are located in the Middle East and Africa. The countries with a known share higher than 4 per cent of GDP are a diverse group including low income countries in Africa and Europe that are or have recently been involved in armed conflict, as well as several wealthy Middle Eastern countries. In reality, the number of countries in this group is probably much higher than SIPRI data suggest, because official military expenditure data, as used by SIPRI, are severely under-reported in most of the countries involved in armed conflict or in some cases not reported at all. The problem is that the extent of under-reporting is not known.

Developments since September 11 indicate a much higher increase in world military spending in the future. The US-led war in Afghanistan, which began on October 7, 2001, marked the start of a new approach to combating terrorism: reliance on military force. This is likely to lead to significant increases in military expenditure – in addition to the increases in expenditure for internal security as countries reinforce their domestic counter-terrorism measures.

September 11 has already had a strong impact on US military expenditure, because of the costs of the war in Afghanistan and, in the longer term, because of the change in political support for increased military spending. The increase in US budget authority for defence in fiscal year 2003, at 48 billion dollars, is larger than the entire defence budget in 2001 of each of the other major military spenders: Russia, France, Japan and Britain. September 11 will also have an impact on other countries' military spending. Several other countries besides the US have incurred costs for the war in Afghanistan and will also increase the anti-terrorist capabilities of their military and internal security forces. The US allies in Europe and elsewhere are being asked by the US Government to increase their defence budgets. If the current approach of reliance on military means to combat terrorism becomes standard, it is likely that there will be a strong rise in military expenditure in the coming years.

(Source: Stockholm International Peace Research Institute (SIPRI), http://projects.sipri.org/milex/mex_trends.html)

Eurosatory, this year's largest arms fair for land-based equipment, takes place from June 17-21 at Villepinte, Paris. Eurosatory brings together 800 exhibitors and 36,000 visitors from around the world – most with the aim of buying and selling weapons.

Campaign Against Arms Trade (CAAT) points out that in the current climate of volatility that reigns internationally, Eurosatory 2002 will be seen by the military industry as an ideal opportunity to boost stockpiles of weaponry by exploiting dangerous tensions around the world that threaten us all.

Jim Footner of CAAT said: "This arms fair is another example of governments preaching a rhetoric of peace and dialogue to nations in conflict while encouraging arms exports to those same countries – all for the sake of a quick buck."

He continued: "At a time of abject hostility between India and Pakistan, as well as sustained violence in Israel, the French government has no qualms about welcoming exhibitors from Israel, Lebanon, India and Pakistan to come and peddle their wares."

A protest is being organised by Fermons Eurosatory (a collective of anti-militarist and other concerned groups) and CANVA (a group of peace and pacifist groups) that will be both be holding demonstrations at the entrance of to the Villepinte exhibition centre on the opening morning of Eurosatory from 8:30am. CAAT will also be maintaining a presence outside for the full five days of the event.

According to the organisers, the Trade Justice Movement, the biggest ever mass lobby of parliament will take place on Wednesday, June 19. It is being held with the slogan: Speak out for Trade Justice! The Trade Justice Movement declares:

Trade should be the means by which poor people can lift themselves out of poverty, not the prison that steals their future.

Trade should protect the environment for all of us, not destroy it and the lives that depend upon it.

Trade could be this positive force – if the international rules that govern it are changed. At the moment, these rules are unfairly biased in favour of the richest nations and global corporations.

All 38 organisations in the Trade Justice Movement are making preparations to ensure the success of June 19. The programme is as follows:

12.30pm – gather at Westminster Central Hall (next to the Houses of Parliament) and other venues (to be confirmed) for rousing speakers, briefings on the issues, music, food, stalls and much more…

3.30pm – as Big Ben strikes there will be a huge "mass moment" as everyone stands in a giant symbolic queue outside the House of Commons showing their desire to wake politicians up to the issue of unjust trade.

Then people will proceed to lobby their MPs. The aim is to demand that MPs support fundamental change to the unjust rules that govern international trade. In particular the demands being put forward by the Trade Justice Movement are:

• support a new approach to food and farming to protect poor farmers' livelihoods and the environment;
• call for reconsideration of plans to liberalise vital services, such as water;
• support new global laws to regulate the activities of international corporations.

Case study: Food

Philippe works in a rice mill in Haiti. The mill was built so that poor farmers could process their rice and sell it at local markets. However, while rich countries continue to subsidise their rice exports, Haiti has been forced to reduce significantly protection for its farmers. This means Haiti has been flooded with cheap rice imports, and it is becoming harder and harder for Philippe to find a market for his crops. With little alternative work, Haitian farmers like Philippe and their families face a desperate situation.

The problems
Over half the world's extremely poor people depend on farming or farm labour for their livelihoods. And yet developing countries are being prevented from protecting their poor producers against unfairly subsidised food from rich countries with whom they cannot hope to compete.

In this and other ways, international trade rules are threatening poor communities' access to safe and nutritious food; they are destroying bio-diversity, damaging the environment and preventing small farmers from earning a decent living through local food markets and exports.

Import Duties
International trade rules are limiting the ability of poor countries to protect their farmers from unfairly subsidised cheap imports. During the 1980s and 1990s, World Bank and International Monetary Fund (IMF) reforms required many developing countries to drastically cut duties on imported food, so poor farmers lost their markets at home. However, if poor farmers try to export their crops they face prohibitive trade barriers imposed by rich countries.

Subsidies
Developing countries are also denied the flexibility to support their farmers. Subsidies were cut by reform programmes imposed by the World Bank and IMF and are now capped by the World Trade Organisation (WTO). In contrast, the reductions in subsidies that rich countries should have made to their own farmers under WTO rules have not materialised.

Millions of smallholder farmers in the developing world are struggling to survive on less than £260 a year in total income. They are competing against American and European farmers who receive an average of £15,000 and £11,500 a year respectively in subsidies.

Schemes like the European Union's Common Agricultural Policy tend to support the richest farmers and the most environmentally damaging farming practices. In particular, current subsidies encourage over production in Europe and the US and the unfair dumping of cheap food imports in poor countries like Haiti.

Patents
The WTO Trade Related Intellectual Property Rights Agreement (TRIPs) is allowing international companies to secure patents on staple crops that have been used by farmers in developing countries for generations. This poses a threat to poor farmers who may be forced to buy their seeds from companies and pay them royalties. Monopolies over seeds are reducing bio-diversity and enabling companies to introduce genetically modified crops.

A lethal mix
The current prescription for global food trade is lethal. Rich countries support their wealthiest farmers and most environmentally destructive farming. Cheap subsidised imports destroy the livelihoods of farmers in developing countries, and there is little their governments are allowed to do about it. Large international companies are taking out patents on seeds and monopolising poor farmers markets.

Make world trade work for the whole world
The Trade Justice Movement is campaigning for international trade rules based on the needs of poor people and sustaining the environment. Trade rules must allow for sustainable trading and for protection and intervention, where necessary, in order to promote important national development objectives such as food security, poverty reduction and environmental standards.

Case study: Water

When the Argentinean government handed over the public water system in the poor province of Tucumán to the French company Vivendi, the water turned 'inexplicably' brown. At the same time water rates doubled and people couldn't afford to pay their bills. Residents mounted a non-payment campaign and water operations were eventually returned to public ownership.

The problems
Drinking water is a basic human need and should be available to all people, regardless of their ability to pay. But if the European Union (EU) gets its way at the World Trade Organisation (WTO), the world's water supply will soon be controlled to big business.

Trading away basic rights
Many countries in the developing world have already come under intense pressure from the World Bank and International Monetary Fund (IMF) to privatise their water supplies. This has often raised prices above the level that poor families are able to afford, forcing them to collect water from untreated sources such as rivers and threatening their basic right to health.

Now these basic rights to water and health are being traded away through an international agreement called the General Agreement on Trade in Services (GATS). GATS rules apply to 'services', which includes anything from education provision to rubbish collection, tourism services to transport policy, health delivery to the setting up of retail stores.

The aim of GATS is to remove from such services government regulations that are considered 'barriers to trade'. Many of the regulations this will eliminate are government policies designed to regulate corporate power or to ensure universal access to basic services irrespective of people's ability to pay. And once governments have opened up particular service sectors to GATS rules, there is effectively no going back.

In whose service?
So far, there has been no proper assessment of the social, economic and environmental impact of GATS. The UK Government's current support for the agreement reflects the demands of business lobbies. A senior UK trade negotiator recently admitted that "the pro-GATS case was vulnerable when non-governmental organisations asked for proof of where the economic benefits of liberalisation lay". Meanwhile, the European Commission has openly acknowledged that "GATS is first and foremost an instrument for the benefit of business".

Our right to know
At the Ministerial Meeting of the WTO in November 2001, new deadlines were set for negotiations to expand the coverage of GATS. By 30 June 2002, countries must submit requests for service sectors they would like other countries to include under the agreement - and the EU is pushing hard for water to be included. By 31 March 2003, countries will have to state which of their own services they will allow to be covered by GATS rules. Parliamentarians and the public have a right to know what services the UK/EU is preparing to negotiate on, but the Government has given no indication of when (or if) this information will be made available.

Make trade work for the whole world
The Trade Justice Movement is campaigning for trade rules such as GATS to put the interests of poor people and the environment ahead of new rights for companies.

Case study: Jobs and corporate regulation

In 2001, Gildardo and Marta, together with 230 other banana workers at the San Pedro plantation in Colombia were made redundant overnight when Dole, the world's largest fruit company, decided to cut costs and shift more of its banana production and trading activities to Ecuador.

Although unions face severe repression in Colombia, costs are cheaper in Ecuador, partly because there are no unions arguing for decent wages and benefits. As a result, child labour and lower wages for women workers are common, the environment is polluted and local communities suffer severe health problems from aerial spraying of chemicals.

The problems
Increased trade and investment internationally has meant that crucial decisions on local production, jobs and employment conditions are made in far-off places by multinational companies that have little allegiance to the communities most affected. The rules that govern the behaviour of the international companies are therefore crucial in determining whether these decisions are likely to promote sustainable development or to undermine it.

Declining role of governments
The World Trade Organisation (WTO) has placed more and more restrictions on the role that governments can play in promoting domestic businesses and creating decent jobs. Existing WTO agreements on services, investment and intellectual property rights give rights to multinational companies, while restricting the role of governments. This is despite the fact that all of the rich countries and the Asian 'tiger' economies used a wide range of government interventions in the past to boost their economies and promote development.

On top of this the European Union (EU) is pushing hard for negotiations to start next year on a new agreement on investment that would remove further powers from government to regulate investment, while giving new rights to companies. This must be opposed.

A change of direction is required - to regulate companies, not governments; to give priority to removing barriers to development, not barriers to trade; and to add enforceable responsibilities on companies, not enforceable rights.

Voluntary codes
In some cases, it will be in the interests of companies voluntarily to adopt sound practices. Many of the UK's leading companies are members of the Ethical Trading Initiative - a joint scheme formed by non-governmental organisations, trade unions and companies - that helps to ensure International Labour Organisation core standards, such as the right to form trade unions, are enforced throughout companies' supply chains. The rapid growth of the fair trade movement is also increasing the power of many poor and marginalised producers.

The need for enforced regulation
However, voluntary initiatives are no substitute for the role of government in regulating companies. Governments must set the standards to ensure that companies do not compete in a "race to the bottom" on issues such as labour rights or the environment. Instead they must create incentives for companies to adopt socially beneficial practices. Currently, there are no enforceable international rules to establish acceptable operating standards and make companies accountable to workers, local communities and the host societies wherever they operate.

Make trade work for the whole world
The Trade Justice Movement is campaigning for new global rules to regulate and re-direct the activities of international business towards pro-poor and sustainable development.

An International Day of Action against GATS (General Agreement on Trade in Services) has been called for Friday, June 28. The centrepiece will be an international demonstration in Geneva, where the World Trade Organisation has its HQ.

The day has been chosen because at the end of June the WTO’s member countries have to register their requests for others to open up their service sectors under GATS.

A picket of the Department of Trade & Industry in London has been called for June 28 by Greens Against Globalisation. The main times will be 11.30-1.30, 5.00-7.00 although there will be a picket all afternoon. The DTI is in Victoria Street, near Parliament Square.

SOLIDARITY RALLY

&

FUNDRAISING

EXTRAVAGANZA

CONWAY HALL, RED LION SQUARE, LONDON WC1

SATURDAY 22 JUNE, 6PM UNTIL LATE.

6PM

ALEXANDER LOPEZ

Former president of sintraemcali, leader of the successful 36 day occupation to stop privatisation, and member of congress elect for the Cauca valley province (social and political front)

8PM

LIVE MUSIC FROM "LA PAILA"

DJs

COLOMBIAN FOOD AND DRINK

tickets- £8 waged, £5 unwaged.

Book in advance to guarantee entry.

To book tickets, contact the

Colombia Solidarity Campaign, PO Box 8446, London N17 6NZ.

Tel: 07950 923448, E-mail: colombia_sc@hotmail.com