Procurement: September 3, 2001


The CIA has released a study pointing out that America's allies often have better military technologies, but that there is enormous resistance to saving taxpayer money buy purchasing cheaper and more effective foreign weapons and equipment. There has always been some opportunity for this, but since the end of the Cold War, and world arms spending declining by half, the market has become a lot more competitive. During the Cold War, there were two main supplies of weapons (the USA and USSR), and everyone was pretty much forced to buy from one or the other. In the West, nations had the choice of buying equivalent stuff from industrialized nations in Europe, but that was not a large market. Now, Russia is increasingly a minor player in the arms business. But nations with high tech industry (a $1.6 trillion industry) are able to develop new weapons and equipment and sell it to just about anyone. While the defense business has always been pretty high tech, it is only a $250 billion industry and is having a harder time competing with the non-defense industry for talent. Most worrisome here is the migration of talented, but unemployed, weapons designers and engineers to nations with high-tech capabilities and a desire to create new weapons. China is a major example, but Iraq, India and Iran also have the resources, and willingness to hire Russian techies. The report points out that, historically, it has been difficult to find out what a police state is doing with weapons research when that nation does not export the high tech stuff. Historical examples were Japan and Germany in the 1930s and the USSR throughout the Cold War. That last one is interesting, as the CIA gets over $20 billion a year to keep an eye on secretive foreign arms producers. You'd think that with that much money, the USSR's secrecy would not have been such a problem. But it was, and there's a lesson in that from some folks who've been there. But before you get too worries, remember that some 90 percent of weapons development and manufacturing is done by NATO nations, plus Japan. But the potential is there, and quite reasonably so, for unfriendly nations like China or Iraq to develop some nasty surprises. 


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