News of the U.S. victory against Iraq was a long-awaited tonic for the half dozen lobbyists from America’s biggest defense companies who gathered in a suburban Virginia conference room last February. It wasn’t just the pride of knowing their firms’ products had helped win the battle. The industry reps quickly realized that foreign customers would now be beating a path to their doors, seeking to buy the winning weaponry. “The next big push in the defense industry will be to exploit the Middle East,” one buoyant lobbyist told NEWSWEEK after the meeting. “This is not arms control. This is an arms opportunity.”
These are bullish times in the international arms bazaar. The countries of the Middle East are still recovering from the war, but their governments are already thinking about how to prepare for the next one. And arms makers in Europe, the United States and the Soviet Union are jockeying to fill their orders. The Bush administration has come out in favor of arms control for ballistic missiles and chemical and nuclear weapons–a call echoed by Egypt, Israel and the Soviets. But when it comes to conventional arms like tanks and planes, U.S. policy, like that of most other arms producers, remains permissive. “The arms race in the Middle East is alive and well,” says a Western diplomat in Cairo. “In fact, it has rarely been so healthy.”
Efforts to stem the worldwide traffic of arms are as old as the trade itself. After World War I the League of Nations produced a report blaming the war on rampant arms merchandising, but disarmament efforts came to nothing. In the United States the Nye Committee produced a similar report, prompting legislation to control the trade. But the rise of Nazi Germany showed that unilateral restraint couldn’t stop aggressors from arming themselves. In 1977 President Jimmy Carter tried to cap conventional arms sales but gave up after the Soviets invaded Afghanistan. The U.S. Stinger surface-to-air missile proved to be a key weapon in the Afghan rebels’ arsenal.
Apart from legitimate security concerns, economics, politics and a dash of cynicism have kept the arms bazaar in business over the years–and continue to sustain it today. Export sales have been a convenient way to prop up domestic arms industries. Arms are often the currency of diplomacy, a way of rewarding friends and punishing enemies. Finally, there is one argument arms exporters can always use to trump the critics: “The world trade in arms is currently a reality…and unilaterally stopping our sales won’t change the situation,” says Pyotr Litavrin, a Soviet Foreign Ministry arms-control specialist. “The ensuing vacuum will just be filled by other suppliers.”
One of the factors driving today’s arms bazaar is the end of the cold war. As the United States, the Soviet Union and Western Europe cut back on military purchases, their arms manufacturers are stuck with excess capacity. They need overseas customers to maintain their industrial base. “Foreign military sales are the only game in town right now,” says one American aerospace executive. Now that the Air Force has finished buying the 700 F-15s it ordered from McDonnell-Douglas Corp., the company’s next big U.S. fighter contract will be the Air Force’s advanced tactical fighter. But production won’t begin until 1996 or 1997. McDonnell is therefore hunting for international customers to keep its F-15 employees busy until the advanced tactical fighter comes on line.
In the Middle East, McDonnell is peddling a new $43 million F-15F fighter against stiff competition from European companies. Last August the firm got a boost from Secretary of Defense Dick Cheney. He waived congressional restrictions and approved the sale of 24 F-15Cs and F-15Ds to Saudi Arabia. Thanks in part to lobbying by supporters of Israel, Congress later balked at a $20 billion Saudi arms package that would have included an additional 24 F-15Fs. But McDonnell is lobbying for the sale, which will be worth $2 billion in direct income over 20 years.
In the Soviet Union, the world’s largest arms exporter, politics and profits are also driving a renewed interest in arms sales. True, last August the Soviets’ embarrassment at Iraq’s aggressive use of their weaponry led the foreign minister at that time, Eduard Shevardnadze, to propose international control of weapons sales under the auspices of the United Nations. But now Shevardnadze is gone and Soviet military hard-liners are ascendant. In Moscow, qualms over the misuse of Soviet weaponry have given way to fretting about what to do with idle defense plants–and a search for new customers to replace the once captive Eastern European market and bankrupt Third World clients. A desperate need for hard currency also plays a part. Says Igor Belousev, chairman of the Cabinet of Ministers’ Military-Industrial Commission: “We will be selling as much military hardware as we can against increasingly tough competition on the world market.”
Soviet arms-sale policy is now indifferent to ideology. In March they showed off their highly regarded SU-27 and MiG-29 fighters at air shows in Beijing and Manila. The two planes will be on display at major European arms shows this summer. The Chinese are likely to purchase a squadron of SU-27s. New clients, say defense experts, could even include Germany. “If the Saudis or Kuwaitis want weapons, why not?” says one Soviet defense expert. “There will be no ideological limitations on our side–we can act like an elephant in a china shop.” Syria is believed to be spending some of the $2 billion it got from Saudi Arabia for its help against Iraq on new Soviet hardware.
The world’s third leading arms seller, France, is also looking for a piece of the action. During the 1980s Iraq was France’s best foreign customer. Paris has lost the Baghdad account, but France’s mostly state-owned weapons makers emerged from the gulf war with good reviews. Aerospatiale’s Milan antitank missiles, Matra’s Mistral antiaircraft missile and Thomson-CSF’s Crotale weapon system–all of which were on display during the war–are in hot demand. After Aug. 2 the French were besieged with orders from Saudi Arabia, Bahrain, Qatar and the United Arab Emirates. “Let’s face it,” a French official in Riyadh said. “This is big business. The French arms industry could not survive unless we can sell overseas.”
The Americans, the Soviets and the West Europeans all face competition from non-Western producers who can compete with them on price, if not on quality. North Korea has quietly been building a Third World clientele for years. American intelligence believes a North Korean ship recently docked at the Syrian port of Tartus and unloaded a consignment of Scud missiles, along with 20 mobile launchers.
To raise money for modernizing its own backward forces, China plans to step up arms sales, too. The arms trade earned Beijing more than $12 billion in the 1980s– almost half of it from supplying both sides of the Iran-Iraq War. Chinese weapons, mostly updates of decades-old Soviet technology, are attractive only to countries that can’t afford anything better. But China is now developing an up-market niche in ballistic-missile technology. In 1988 Beijing sold Saudi Arabia $1 billion worth of CSS-2 missiles, which can travel 2,000 miles carrying chemical or nuclear warheads. China’s recently developed M9 and M11 missiles have a range of 365 miles and can also carry chemical or nuclear warheads. Syria and Libya have both pressed Beijing for access to the missiles. No Arab customer has complained that the CSS-2 sold to Riyadh reportedly uses guidance systems developed jointly with Israel.
Aside from Syria and Saudi Arabia, the big new buyer is Iran, which is determined to rebuild militarily after its crippling eight-year war with Iraq. Still cut off from Western arms, Iran is dealing with China. Gen. Ding Henggao, who oversees China’s weapons industry, took off early this month for Teheran to discuss cooperation on a variety of projects, including, according to military experts in Beijing, joint production of F-7 fighter planes and T-69 tanks and the sale of a nuclear-research reactor. When the Iranian defense minister visited Beijing last fall, he toured several Chinese cities with aircraft plants. Twice in the last year Iranian 747s have arrived in Beijing to cart crates of equipment–presumed to be aircraft parts–back to Teheran. Iran is also talking to Brazil. In March the O Estado de Sao Paulo newspaper reported that Mehdi Bavargan, Iran’s vice minister of defense, visited Brazil to negotiate the sale of Astros-II rocket launchers to Iran. (Avibras, which makes the Astros-II, says no deal was closed.)
In February Secretary of State James Baker called for conventional-arms control in the Middle East. “The time has come to try to change the destructive pattern of military competition and proliferation in this region and to reduce arms flows into an area that is already overmilitarized,” Baker told the Senate Foreign Relations Committee. Even France suggested a proposal to have the five permanent U.N. Security Council members, who also happen to be the world’s five largest arms exporters, constrain sales to the region. Moscow signaled some willingness to take part.
But Baker made his move without consulting the State Department bureaucracy or the Pentagon. President Bush himself dismissed a similar proposal that Canadian Prime Minister Brian Mulroney publicly sprang on him during their March summit in Ottawa. Arms control “doesn’t mean we’re going to refuse to sell anything to everybody,” Bush said. “We’re not going to cut off all weapons sales.” On March 19 Defense Secretary Cheney told the House Foreign Affairs Committee that arms control in the Middle East would be limited to ballistic missiles and chemical and nuclear arms.
In addition to urging congressional approval for a sale of 46 F-16 jet fighters worth $1.6 billion–plus advanced smart bombs and Maverick missiles–to Egypt and an additional $125 million worth of arms for Turkey, the White House last month announced it wants the Export-Import Bank to underwrite up to $1 billion in commercial arms sales with loan guarantees. For now, the guarantees would be for arms sales to NATO countries, Japan, Israel and Australia. But Congress suspects they will be extended to Third World nations that often end up defaulting and leaving the American taxpayer with the tab. Rep. David Obey vowed to block the plan in his appropriations subcommittee.
The Bush administration regards arms sales to gulf-coalition partners as a reward for support in the war against Iraq. “Our first concern ought to be to work with our friends and allies to see to it that they’re secure. I don’t think an arms embargo in and of itself is necessarily a good thing if it keeps the Egyptians or the Israelis or the Saudis from being adequately defended,” Cheney says. But what is the threat against which U.S. allies are defending themselves? Iraq has been put out of action for some time to come. In any case, the gulf war showed past arms buys by the oil states didn’t help them defend themselves.
Furthermore, the Arabs and Israel are still at war with each other, so they have mutually exclusive definitions of “adequately defended.” If the Arabs rearm, Israel insists on upgrading its own defenses. The Israelis are especially worried that the United States is about to supply Saudi Arabia with topflight equipment, including the M-1A2 tank, which is so new that the United States is still fielding it for its Army. In the past, Washington guaranteed Israel a “qualitative edge” over the Arab states. Says Knesset member Benny Begin: “Now we have entered a new era in which the U.S. is ready to sell our enemies some weapons which Israel does not have…Where, then, is the Israeli qualitative edge?” Israel will soon present its own multibillion-dollar arms wish list.
A growing number of House members and senators are beginning to question the wisdom of arming allies who could metamorphose into enemies, just as Iraq did. Last month the Senate voted 98 to 1 to ban arms sales to allies that haven’t met their pledges to help pay for the Persian Gulf War. Sen. Joseph Biden, a member of the Foreign Relations Committee, is drafting legislation calling for an international suppliers’ cartel to prevent the spread of dangerous hardware. House Foreign Affairs Committee chairman Dante Fascell also wants to restrain Middle East arms transfers. “The end of the war with Iraq cannot signal a return to business as usual, especially arms business as usual,” he says.
That’s easier said than done. The United States and Soviet Union have spent three decades negotiating nuclear-arms control; so far they have only managed to slightly slow the growth of their arsenals. Arms control in the Middle East would be just as difficult. There would have to be agreement over just what constitutes the Middle East: should an agreement encompass Pakistan on the east and stretch as far as Morocco to the west? Everyone agrees ballistic missiles and chemical and nuclear weapons should be covered. But what fighter aircraft should be included in an accord, and what kind of sophisticated aircraft components should be outlawed? The Soviet Union would have to agree, along with China and North Korea. Says W. Seth Carus, with the Washington Institute for Near East Policy: “In principle, arms control in the Middle East is not a problem. In practice it’s extremely difficult.”
The arms race in the Middle East will end only when Middle East countries settle the disputes driving them to arm themselves against each other. There are at least three separate arms races currently underway: the Arab-Israel conflict, inter-Arab disputes such as Kuwait-Iraq and, potentially, Iran-Saudi Arabia. A similar point could be made about other regions of the world. The Indian subcontinent is a place of chronic friction. So is Indochina. The arms race could even reach the Balkans, where age-old conflicts continue to simmer. Unless these disputes are somehow put aside, the world’s trouble spots will continue to make target-rich environments for the arms merchants.
The list of the top 10 arms exporters from 1985 to 1989 shows that sales volume is a function of technological development. The top five are the five permanent members of the U.N. Security Council.
The world’s largest arms supplier. MiG fighters are still big sellers, but the Soviets will do less business with traditional clients such as Syria and Angola.
America’s military contribution to the new world order will include F-16s and F- 15s, AH-64 attack helicopters, M-1A1 tanks and antiaircraft missiles.
With a falling share of exports to developing countries, France is prospecting the gulf for takers of its Mirage F-1s, Exocet missiles and helicopters.
The Tornado strike jet and Challenger tank got high marks in the gulf war, but Britain is losing sales to old clients that are producing arms of their own.
Once saddled with a lot of old Soviet technology, China is now becoming a major exporter to the Third World. Its biggest hit: the Silkworm missile.
Still anxious to keep a low profile in the arms bazaar, Germany sells naval systems (including submarines and frigates) mostly to other NATO members.
When the military arm of the Warsaw Pact collapsed, Czechoslovakia lost an important client for its T-55 tanks and its L-39 jet trainer aircraft.
Strong sales of attack planes, helicopters and SAMs may weaken; a new law makes strict monitoring of defense companies a matter of national policy.
Peace-loving Sweden is doing a brisk trade in arms, including artillery to India and 155-mm howitzers and radar and defense electronics to NATO.
Holland is known for naval-communications systems. One defense firm is under investigation for allegedly selling Iraq night-vision equipment illegally.
The Third World has proven fertile territory for the agents of weapons manufacturers. Japan is the only advanced industrial country among the top five arms importers.
Throughout the last decade, India has spent mightily to modernize its armed forces. Some favorite purchases: Soviet MiG-27s and MiG-29s and German and Soviet submarines.
Saddam’s shopping spree of the 1980s–including MiG-29s, Mirage F-1s and SU-24 fighter-bombers–isn’t likely to be repeated soon. Iraq needs all its cash to rebuild.
Japan’s defense budget is no longer limited by cabinet resolution to 1 percent of its GNP. Lately the country’s been stocking up on F-15s and Patriot missiles.
After the gulf war the Saudis’ appetite for weapons is strong but its treasury has been weakened. Still, the kingdom will buy more fighter jets and tanks.
Syria’s defense spending isn’t what it was during the 1980s. No longer a prime Soviet client, Syria recently bought modified Scuds from North Korea.
