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Scrutiny
  
Defence = Offensive economics!
That’s the equation running global defence equipment sales, with US, Russia, et al basking ingloriously
05/03/2009

Let’s be honest. Poor George Bush was in reality a socialist. You’ll see our import within the next mile. In early 2005, even when the ‘global war on terror’ in Afghanistan and Pakistan was at its peak and the world had already started believing that the very epicenter of most terror attacks across the world was Pakistan, the then incumbent US President George W. Bush announced that US would sell the F-16 combat aircraft to Pakistan as it would play ‘a key role’ in the war against terror. Well, this was what Mr. Bush wanted the world to believe. While everyone knew why Pakistan was ecstatically happy to see its long pending demand of new age F-16s being met and against whom it might use them if the need be (the previous ones supplied nearly two decades back are no match today for India’s top line Su-30MKIs), a few others also knew why the choice could have been nothing else but the obvious F-16s. Why? Simple. Lockheed Martin!

The indiscernible thread that binds the F-16s of Lockheed Martin and George Bush is that both are from Texas. At the Fort Worth factory of Lockheed Martin, the jobs of nearly 5,000 workers depend heavily on whether Lockheed gets new orders for F-16s from outside the US, given that the US armed forces have stopped procuring fresh F-16s. Thus, Lockheed depends critically on the sales of aircraft to other countries like Pakistan; and India too. So, for George Bush, it was simple socialism at best, which made him take the decision to sell F-16s to Pakistan. Yet, even then, he could not save the jobs of nearly 2000 workers.

Cut to the present and to Obama’s predicament. If the Indian Air Force order for procuring 126 MMRCA (Medium Multi Role Combat Aircraft) doesn’t come to Lockheed Martin – for which they have even developed a new version named F-16 IN, better than the ones used by the US Air Force and Navy – then most of the employees at Fort Worth would see the end of their professional journey. Barack has published his formal statement that he would “develop a strategy for determining when contracting makes sense, rather than continually handing off governmental jobs to well-connected companies.” Would Obama disregard his glorious value statement and, like his predecessor, step in to see that IAF bends to Lockheed’s universe?
Not that he would, but if he does, he has good reason to. Since the end of the Second World War, the global defence industry has played a crucial role in not just shaping the geopolitical strategies of powerful countries, but also in being a crucial pillar of the concerned economies. SIPRI (Stockholm International Peace Research Institute) states that since the 1950s, US alone has exported arms worth $566 billion to other countries. This incidentally is based on the 1990 constant price of dollar to bring out a uniform TIV (Trade Indicator Value). At current prices, the value could be nearly three times that. Since 1992 alone, US has sold arms worth $142 billion. Compared to US, the erstwhile Soviet Union, since the 1950s, has exported arms worth $461 billion; followed by UK with $107 billion, France with $100 billion, while the new avatar of USSR, Russia, since the disintegration of USSR in 1992 has notched up arms sales of $67 billion till 2007.

Incidentally, the sales by the top 10 First World countries since 1950 till 2007 is a whopping $1.5 trillion and that too (as stated earlier) at the 1990 constant price of dollar. Ergo, to say that it all sums up to simple economics and not just ‘arming defenseless states’ is a no brainer. No doubt, this whopping wealth – generated by sales to most of the Third World countries – is the main reason for First World nations being ranked high in the SIPRI list of the largest arms exporters. Interestingly, barring Russia and China, almost all other major arms exporting nations figure even among the top 20 in the Human Development Index. In other words, the correlation is highly ironic that Third World nations, which should have been lower spenders on defence and higher on social infrastructure, have ended up being at the other extreme, clearly because of the First World forcing them to enter into an unwanted arms race; the US F-16 sale to Pakistan (and subsequent encouragement to India) simply a trivial example to justify our reasoning. The global military expenditure in 2007 was $1.34 trillion, which includes not just money spent on purchase of hardware, but also that spent on keeping a gigantic workforce fighting fit. And here we also come to the simple economics of employment. The world’s top hundred arms manufacturing companies alone employ 4.5 million people. Add to this the millions across the world employed as regular soldiers, and one starts understanding why defense is nothing but offensive economics.

By:- Pathikrit Payne
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