Lecture University of Amsterdam. Wendela de Vries. January 8, 2011
Incredible rise of global military expenditure
There is a growing trend in the amount of money that is spend on the military worldwide: The global military expenditure in 2009 is estimated at $1531 billion, which is an increase of 6% in real terms as compared to the global military expenditure in 2008. This is a long time trend. There is an increase of 49% since 2000. Global military spending is higher than it ever has been during the Cold War. About half of the money is spend by the United States, leaving the other 192 countries of the world to spend the other half.
Major factor to explain this trend
-The war in Afghanistan and to a lesser extend in Iraq. Not only is money spend on new weapons but also on military personnel, pensions and the hiring of private companies.
-More general: the strategic concept of long-distance deployement. During the Cold War countries armed themselves to defend their territory. The new paradigm is that one must arm oneself to be able to wage wars in far-away countries. This requires different and expensive equipment.
– High prices of natural resources, notably oil but also copper, tin etc. Developing countries exporting raw materials, such as Algeria and Brazil, spend a lot of the revenues on the military. After a temporary fallback as a consequence of the economic crisis, prices are rising again.
– As a consequence their worried neighbouring countries also increase their military spending, which leads to regional arms races. You see this clearly in Latin America and northern Africa.
Unfortunately not all countries involved have natural resources. Those which haven’t stab themselves into deep debt for arms procurement.
In 2009 you see no impact of the global economic crisis on military expenditure. New figures from 2010 will probably show a smaller rise than this 6% but a decrease is still not to be expected.
Arms trade in 2009
Military budgets do not only consist of arms trade. They also include costs for personnel, sites, pensions and the hiring of private companies. But arms are a substantial part. Recent announcements of cost reductions in the US show a huge reduction in personnel but not that much in armament. Probably the arms trade lobby is better organised than the military personnel lobby.
In 2009 signed arms transfer agreements reached $57,5 billion. This is a decrease of 8,5% as compared to 2008. One explaining factor is the economic crisis. There is a shift from new procurement to upgrading of existing systems. Many new contracts are not cancelled though but only delayed. Another explaining factor is a very big US transfer agreement in 2008 which is not repeated in 2009. The long term trend shows a substantial rise.
Total value of arms transfer agreements in the period 2006–2009 $ 244,5 billion.
Total value of arms transfer agreements in the period 2002-2005 $ 172,4 billion.
A 29,5% increase.
Note that these figures show agreements, which means signed contracts. Actual deliveries in 2009 were $35,1 billion as compared to $35,8 billion in 2008.
The major arms exporter is the US, followed by Russia and the European Union.
Source: US Congress Research Service and Federation of American Scientists.
Why so much arms trade?
There is more to arms trade than just buying and selling. Arms trade is a very politicized trade. This should be taken into consideration when trying to control it.
Push factors for export countries
* Profits Arms companies wants to make profits, that’s what companies are for. Many companies used to be state-owned, over the last decade most became privatised although in many cases states still own part of the shares. But arms companies are not really part of the free marked. They are excluded from all kind of free trade treaties such as the GATT agreement and the EU treaty. This so-called ‘security exception’ means that there is no free competition in arms trade: states still favour their national industries. There is for example no obligation for public tendering for arms procurement in the EU, although there are attempts by the European Defence Agency (the EU body for armament) to come to a volutary tendering procedure.
* Employment Under the same ‘security exception’ states can subsidize or otherwise support their arms industry, in this way using it as a Keynsian economic instrument. In most cases, to support arms industries is a very expensive way to create employment, as arms industry is personnel-extensive.Investment in health care for example can create much more jobs.
* Foreign relations Countries can use arms export to strengthen foreign relations. One notorious example is the military support of the US for Pakistan: reaching $5.4 billion in the last 8 years. The aim is to keep the policy of the Pakistani military favourable to the US. Remembering the US military support for Saddam Hussein in the 1980s one can see the risks of this policy.
* Economies of scale The most important client of most arms industries is the government of the country where it is based. This government, which has to control the export, also has an interest in export, because the more sales, the cheaper the product. Notably in arms production where R&D is a substantial part of the production costs. The interest in export, and the export support by governments, will increase when western countries are going to reduce their own procurement as a consequence of the economic crisis.
Pull factors for import countries
* Local arms races To define if an arms import is reasonable, one could consider if a country is under threat. Often there is no clear relation between threat and arms procurement. For example: The JSF fighter jet is specially designed for long distance offensive use. It is unclear why the Dutch should want to buy it as they do not plan, for example, to invade China.
* Military ambitions Developing countries (eg Indonesia) complain that an attempt to limit arms trade is neo-colonial. This is only true if the attempt to limit arms trade is not directed to western countries and their procurement.
* Lacking democratic control Who decides on big arms imports? Often it is only a very small circle of males, with little or no influence of parliament.
* Corruption It is estimated that 1/3 of global corruption concerns arms deals. Not only in development countries but also in western countries. See the case, now under investigation, of a German arms company bribing Greek and Portuguese officials into a defence contact. Arms trade is corrupting our governments. It is much more profitable to invest in weapons than in schools, schools don’t pay, arms companies do.
Position of UN
An often quoted article of the UN Charter, article 51, saying that every country has the right to arm itself for its defence. However, there’s another article that should be taken into consideration in this respect, which is article 26 of the UN Charter saying.
“In order to promote the establishment and maintenance of international peace and security with the least diversion for armaments of the world’s human and economic resources the Security Council shall be responsible for formulating, with the assistance of the Military Staff Committee referred to in Article 47, plans to be submitted to the Members of the United Nations for the establishment of a system for the regulation of armaments.”
The trend we see does not reflect the spirit of this UN article, it does not show much restraint on the use of the world’s human and economic resources for armament.
Millenium Development Goals
In the year 2000 the United Nations has set itself goals to be reached in 2015 to fight poverty and suffering. The World Bank calculated how much extra money is necessary to reach these goals. During an evaluation summit in 2010 the countries of the United Nations had to conclude that the amount of money for these goals is not sufficient.
Maybe countries should reconsider their priorities. A coalition of NGO’s (non-governemental organisations) compared the millennium goals with global military expenditure.
Goal 1 Erradict extreme poverty and hunger
Estimated Cost an additional $39 – $54 billion per year
Which is 2.5% – 3.5% of annual global military expenditures
Goal 2 Archive universal primary education
Goal 3 Promote gender equality and empower women
Estimated Cost (goals 2 & 3 combined) an additional $10 – $30 billion per year
Which is 0.6% – 2.0% of annual global military expenditures
Goal 4 Reduce by 2/3rds the under-five mortality rate
Goal 5 Improve maternal health
Goal 6 Combat HIV/AIDS, malaria and other diseases
Estimated Cost (goals 4, 5 & 6 combined) an additional $20 – $25 billion per year
Which is 1.3% – 1.6% of annual global military expenditures
Goal 7 Ensure environmental sustainability
Estimated Cost an additional $5 – $21 billion per year
Which is 0.3% – 1.4% of annual global military expenditures
source: NGO Committee on Disarmament, Peace & Security
UN Register of Conventional Arms
The UN has no direct influence on the military budgets of individual states. But in the context of disarmament the UN develops international disarmament laws, limits inhumane weapons such as cluster ammunition and improves confidence between states
A confidence building instrument is the UN Register of Conventional Arms established in 1992. States are requested, on a voluntary basis, to submit information about their military imports and exports as well as on their holdings, on procurement through national production and on weapons of mass destruction.
Reporting is asked in seven categories of heavy conventional weapons—battle tanks, armored combat vehicles, large calibre artillery systems, combat aircraft, attack helicopters, warships, and missiles and missile launchers. Conventional weapons account for about 80% of the world arms trade.
The register is not living up to expectations and registration is going down. An attempt to include a new category for small arms/light weapons failed due to US resistance (as no US government can start to control US small arms without facing heavy electoral consequences). Another problem is that the categories are too narrowly defined to only offensive weapons. Eg ‘attack helicopters’ instead of ‘military helicopters’.
Arms Trade Treaty (ATT)
To revive the UN arms control role NGO’s started a new initiative, now taken up by the UN, to establish a global Arms Trade Treaty, to be established in 2012. The ATT should “ prevent international transfers of conventional arms that contribute to or facilitate human suffering, serious violations of international human rights law and international humanitarian law…thereby undermining sustainable social and economic development. ” according to García Moritán, chair of negotiations.
The idea of an ATT is loosely base don the EU Common Position on arms export, which says arms exporting countries should take into consideration
1. UN and EU sanctions
2. Respect for human rights in the country of destination
3. The existence of internal tensions or armed conflicts
4. Preservation of regional peace, security and stability
5. Security of the member states
6. The behaviour of the buyer country in the international community (terrorism, alliances and international law)
7. The risk of re-export
8. The technical and economic capacity of the recipient country
Although the EU criteria are far from perfect and implementation is very inconsistent, this might be a first step to set an ethical standard and develop a control mechanism. Much will depend on the strongness of the treaty text and the amount of support it will get from states. A balance has to be found between a strong text with a few subscribers or a weak text with many subscribers and no impact. And when we will have a treaty in the end, a lot has to be done before countries will live up to it.