Bad Economy Drives Down American Arms Sales

September 13th, 2010 - by admin

Thom Shanker / The New York Times – 2010-09-13 23:10:02

How bad does the global economy have to be before we’re too poor to fight each other?
— Anonymous

WASHINGTON (September 12, 2010) — The global economic recession significantly pushed down purchases of weapons last year to the lowest level since 2005, a new government study has found.

The report to Congress concluded that the value of worldwide arms deals in 2009 was $57.5 billion, a drop of 8.5 percent from 2008.

While the United States maintained its role as the world’s leading supplier of weapons, officials nonetheless saw the value of its arms trade sharply decline in 2009. This was in contrast to 2008, when the United States increased the value of its weapons sales despite a drop in business for competitors in the global arms bazaar.

For 2009, the United States signed arms deals worth $22.6 billion — a dominating 39 percent of the worldwide market. Even so, that sales figure was down from $38.1 billion in 2008, which had been a surprising increase over the $25.7 billion in 2007 that defied sluggish economic trends.

The decrease in American weapons sales in 2009 was caused by a pause in major orders from clients in the Middle East and Asia, which had pumped up the value of contracts the year before. At the same time, there were fewer support and services contracts signed with American defense firms last year, the study said.

Russia was a distant second in worldwide weapons sales in 2009, concluding $10.4 billion in arms deals, followed by France, with $7.4 billion in contracts. Other leading arms traders included Germany, Italy, China and Britain.

The annual report was produced by the nonpartisan Congressional Research Service, a division of the Library of Congress. The analysis, regarded as the most detailed collection of unclassified global arms sales data available to the public, was delivered to members of the House and Senate over the weekend in advance of their return to work on Monday after the summer recess.

The decline in new weapons sales worldwide in 2009 was caused by government decisions “to defer the purchase of major systems” in a period of “severe international recession,” wrote Richard F. Grimmett, a specialist in international security at the Congressional Research Service and the author of the study.

The recession did not halt military modernization and improvements, as nations sought to make their armed forces more lethal despite tight budgets.

“Some nations chose to focus on completing the integration into their militaries of major weapons systems they had already purchased,” Mr. Grimmett wrote. Other nations, according to the study, focused available military money on smaller contracts for “training and support services, as well as selective upgrades of existing weapons systems.”

Mr. Grimmett said that while the global recession slowed overall weapons sales, “The international arms market is still very competitive,” with major weapons-producing nations battling over traditional clients and seeking new buyers in emerging markets.

To that end, the study focuses in particular on the category of weapons sales to the developing world, which totaled $45.1 billion of the overall arms trade in 2009, a drop from $48.8 billion in 2008.

In 2009, Brazil was the top weapons buyer in the developing world, concluding $7.2 billion in purchase contracts, followed by Venezuela with $6.4 billion in purchases and Saudi Arabia with $4.3 billion. Other major arms buyers last year were Taiwan, the United Arab Emirates, Iraq, Egypt, Vietnam, India and Kuwait.

Over much of the past decade, Saudi Arabia, China, India and the United Arab Emirates have been among the largest weapons purchasers in this category.

The United States led not only in global arms sales, but also in the category of weapons contracts to the developing world, signing deals worth $17.4 billion in arms to these nations in 2009. Russia was second, followed by France.

“Relationships between arms suppliers and recipients continue to evolve in the 21st century in response to changing political, military and economic circumstances,” Mr. Grimmett concluded. “Where before the principal motivation for arms sales by foreign suppliers might have been to support a foreign policy objective, today that motivation may be based as much on economic considerations.”

The study uses figures in 2009 dollars, with amounts for previous years adjusted for inflation to give a constant financial measurement.

How bad does the global economy have to be before we’re too poor to fight each other. Heck, coupled with low gas prices, maybe I don’t want things to get better.

Still the bold is kind of cool in an Isaac Asimov’s Foundation sort of way.

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