Procurement: Danger Drives Demand

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May 8, 2015: Weapons exports increased 16 percent in the last decade, largely because Moslem nations with oil are spending much of their oil income on weapons. The greatest percentage increase (45 percent) has been in Africa, but this is because of three Moslem nations (Algeria, Morocco and Sudan) increasing their arms purchases because of the rising world oil price. With the collapse of the oil price since 2013 the imports by African oil nations are on hold or declining.

More worrisome has been the fact that over 40 percent of arms exports go to Asia (mostly China, Australia, South Korea, Taiwan and Japan). That is because there is a major arms race in East Asia as China continues to increase its defense budget (now the second largest on the planet and about a third the size of American spending). The Middle East (largely Israel and the Arab Gulf states) gets 17 percent, with Europe getting 21 percent, Africa seven percent and the Americas 12 percent. The United States represents about 30 percent of these sales but far less of the imports. While the percent increase imports increase is largest in Africa that continent comprises the smallest portion of imports. The Middle East and East Asia are the most worrisome,

Another factor in the sharp growth in arms exports was largely because, after 2001 global defense spending increased nearly 50 percent to over $1.8 trillion. That's about 2.4 percent of global GDP. After the Cold War ended in 1991, defense spending declined for a few years to under a trillion dollars a year. But by the end of the 1990s it was on the rise again. The region with the greatest growth has been the Middle East, where spending has increased 62 percent in the last decade. The region with the lowest growth (six percent) was Western Europe. The 2008 recession led to global defense spending stalled at, or maybe even a little below, $1.8 trillion. But the spending growth resumed, slowly, but has stalled and even declined a bit during the last three years. China is making the most of that, especially since they will sell to anyone who can pay and are not deterred by demands for bribes and other off-book services.

Another troubling trend is the growing activity of China in the arms trade. This is because China sells a large amount of low-tech weapons (small arms, mines, armored vehicles and artillery) to anyone who can pay for it. More so than Russia, who is China’s main competitor, China ignores or works to get around embargoes and sanctions.

 

 


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