Business as usual for US arms sales
By Frida Berrigan
The chief executive officer of a weapons manufacturer has plenty of chances to
rub elbows with deputy secretaries of defense, officials from Homeland
Security, retired military personnel, and the best and brightest of the defense
establishment almost any week of the year.
One such opportunity occurred at the ComDef 2008 conference, which wrapped up
at the National Press Club in Washington on September 3. Sponsored by weapons
giants like Boeing, Raytheon and BAE Systems, the day-long conference was
organized around the theme of "Defense Priorities in an Age of Persistent
Conflict".
It featured presentations from a US Navy under secretary, a
deputy director at the Pentagon, several weapons manufacturers and defense
representatives from France, the Netherlands, Canada and elsewhere. With this
high-powered lineup, the conference probably delivered on the promise of its
catch line: "Where the international defense cooperation community gets down to
business."
Next on the calendar in mid-October will be the Women in Defense National
Conference at the Crystal Gateway Marriott near the Pentagon. Sponsored by
consulting giant Booz Allen Hamilton, the conference includes a panel on the
"National Security Priorities in the Next Administration", moderated by a
Lockheed Martin vice president.
Foreign policy advisers from the Senator John McCain and Senator Barack Obama
campaigns will be on hand and - in a nod towards inclusiveness -
representatives from Bob Barr's and Ralph Nader's campaigns have been invited.
The closing reception is sponsored by Lockheed Martin, and Booz Allen Hamilton
is picking up the tab for the "Breaking a Glass Ceiling" dinner featuring
retired US Air Force Major General Jeanne Holm.
And then, who would want to miss flying south for the winter? The Defense
Manufacturing Conference at Disney's Coronado Springs Resort in Florida in
early December offers military industry executives the chance to soak up the
rays and address the question: "Are we ready to provide affordable warfighting
capabilities?"
One of the persistent themes of these and many other weapons industry
conferences is the looming concern that the military budget - which increased
by two-thirds between 2001 and 2008 - can't keep spiraling upwards forever.
ComDef 2008 frames it like this, "Persistent warfare is eroding the capability
of our armed forces and hard choices will need to be made ... It is
increasingly unlikely that more money will be found for defense."
Last year, the Women in Defense conference addressed this issue with a panel
titled "Shaking the Money Tree: Funding National Defense", moderated by a vice
president for programs and budget at Lockheed Martin.
Shaking the money tree
Lockheed Martin stands head and shoulders above its competitors as a
professional tree-shaker. Between 2001 and 2008, the company saw its contracts
from the Department of Defense jump nearly 130%, from $14 billion to $32
billion. In a stagflation economy, their profit margin is more than healthy.
The Bethesda-based company reported a 13% increase in profitability for its
second quarter - from $778 million last year to $882 million this year.
The weapons industry's concern about belt-tightening notwithstanding, the
military budget is likely to continue its dramatic growth. The Defense
Department's base budget, which does not include funds for nuclear weapons or
the $12-billion-a-month "war on terror" has grown by nearly 70% - from $316
billion in 2001 to a request for more than $515 billion for 2009's fiscal year
(which begins in October).
Despite the fact that these figures represent close to what the rest of the
world combined devotes to the military, neither Obama nor McCain has adopted
reducing military spending as part of his national security plan. In fact, as
both of them talk about modernizing the military for the 21st century and
expanding the size of the armed forces, the billions add up.
So the weapons industry's alarm bells are ringing prematurely and the future -
particularly in foreign weapons sales - looks very bright. Take Lockheed
Martin, for example: the company, which is springing for the floral
arrangements at the Women in Defense conference next month, has more than $10
billion in proposed or recent weapons deals with foreign nations. The biggest
deal could be worth $7 billion (that's a lot of gladiolas and irises for Women
in Defense) to Lockheed Martin.
The United Arab Emirates is interested in the company's THAAD (Terminal High
Altitude Area Defense) system. The mobile truck-mounted system is designed to
intercept incoming missiles targeted at sites such as airfields or populations
centers.
Another potentially huge sale would be to Iraq, where the combination of regime
change, occupation and oil revenue has created loyal new customer. Even as US
fighter planes bomb Iraqi cities, the Nuri al-Maliki government has indicated
it would like to order 36 of the company's advanced F-16s.
Recent sales of these $100 million planes to countries like Morocco, Pakistan
and Romania have all contributed to a bumper year for the Bethesda-based
company. But Lockheed Martin isn't the only company reaping rewards in the age
of persistent conflict. War and instability are good for business across the
board. Jeanne Farmer of the Defense Security Cooperation Agency, which
processes requests for foreign military sales, noted at the ComDef meeting, "In
the current environment, everybody needs everything right now. We do expect to
continue to have large, large sales."
"Our program," she continued, "is growing by leaps and bounds," describing how
her agency is dealing with more than 12,000 open cases (in some instances the
weapons have been transferred, but not all options have been exercised or the
licenses have not expired) totaling upwards of $270 billion.
US weapons sales to foreign countries in 2008 are on track to be 45% higher
than in 2007. This year, the US will offer about $34 billion in weapons to
Iraq, Pakistan, Saudi Arabia and other countries. In 2007 that figure was $23.3
billion, just a small bump from the $21 billion of 2006. So far in 2008,
Farmer's agency has processed more than $12.5 billion in possible foreign
military sales to Iraq - not including the F-16 fighter plane request, which
has not yet been formalized.
On Baghdad's wish-list are systems like the Abrams tanks, attack helicopters,
Hellfire missiles, heavy transport aircraft, and other weaponry. Proponents of
billion-plus weapons sales argue that these sales will reduce Iraq's reliance
on the United States military, but we need only look at Pakistan to see
evidence that these policies create well-armed short fuses.
Since the beginning of the "war on terror", the US has transferred billions of
dollars in weaponry and more in military aid to Pakistan. Recently, the US
military has mounted attacks in Pakistani territory aimed at Taliban and other
restive elements without even informing Islamabad in advance. The response from
the Pakistani parliament? A forcefully worded statement that the Pakistani
military - armed, trained and outfitted by the United States - be prepared to
"repel such attacks in the future with full force". It wouldn't be the first
time US forces clashed with US-armed adversaries.
Bad news for them: Good news for us?
A multi-billion-dollar trade, a world bristling with weapons, and a
well-organized and powerful industry committed to keeping it that way: these
factors make the arms trade big news. Whoever assumes the presidency in January
will have to choose between continuing President George W Bush's policy of
arming the world or setting a new course against strenuous objections from the
military-industrial complex.
But neither of the presidential hopefuls has devoted even a few lines of major
addresses to weapons-sales policy. Even so, the industry seems worried about
Obama's vice presidential pick, Joe Biden. Loren Thompson, a pro-industry
analyst with the conservative Lexington Institute, told Defense Daily
International, "Biden's record on weapons-related issues is that of a
doctrinarian ... he always comes down on the liberal side. So this is not good
news for the defense industry."
As executives, retired generals and Pentagon officials flit from one
industry-underwritten conference to another, bemoaning imagined cutbacks and
belt-tightening, the real bad news for their business would be good news for
everyone else - namely peace, diplomacy, democracy and human rights.
Foreign Policy In Focus columnist Frida Berrigan is a senior program
associate at the Arms and Security Project of the New America Foundation.
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