excerpted from the article
Guns 'R' Us
by Martha Honey
In These Times magazine, August 1997
The United States, Britain, Russia, France and China dominate
today's $32 billion global arms trade. But the United States has
pulled out in front. According to the U.S. government's own estimates,
Washington's share of the business jumped from 16 percent in 1988
to 50 percent between 1992 and 1994. The sky seems to be the limit.
According to a 1995 Pentagon forecast, the United States accounts
for 63 percent of worldwide arms deals already signed for the
period between 1994 and 2000.
The Clinton administration has accelerated arms exports despite
the global downturn in military production and defense budgets
since the end of the Cold War. After peaking in 1987, world military
spending dropped 40 percent to $811 billion in 1996, the lowest
since 1966, according to the International Institute for Strategic
The overall U.S. military budget is one-third smaller than
at its peak in the mid-'80s. In real terms, however, U.S. defense
spending is still higher than during the Carter administration.
Rather than embark on a serious program of defense cuts and economic
conversion-the illusory "peace dividend" promised with
the end of the Cold War- the Clinton administration is phasing
out its conversion programs, opting instead to help boost the
profits of military manufacturers through overseas sales.
The foreign policy risks of escalating arms exports are enormous.
Most U.S. weaponry is sold to the Middle East and other strife-torn
regions, helping to fan the flames of war instead of promoting
stability. More than 40 percent of the international sales of
major conventional weapons between 1984 and 1994 went to nations
at war such as Iraq, Somalia and Sudan, according to the United
Nations Development Program's 1994 Human Development Report. Civilians
are increasingly the major victims of war. They accounted for
half of all war deaths during the first half of this century,
64 percent in the '60s and 74 percent in the '80s. The share of
civilian casualties appears to be higher still in the '90s. The
United States has been a major arms supplier to nations at war.
Since 1985, participants in 45 ongoing conflicts received over
$42 billion worth of U.S. weapons, according to a 1995 World Policy
Institute report. Among the major conflicts in 1993 and 1994 90
percent involved one or more parties that had received U.S. weapons
or military technology prior to the out break of fighting.
International arms sales also put U.S. troops based around
the world at growing risk. In discussing this so-called "boomerang
effect," the CIA's Nonproliferation Center noted in 1995
that "the acquisition of advanced convention al weapons and
technologies by hostile countries could result in significant
casualties being inflicted on U.S. forces or regional allies."
In fact, the last five times that the United States has sent troops
into conflict-in Panama, Iraq Kuwait, Somalia, Haiti and Bosnia-American
forces faced adversaries that had previously received U.S. weapons,
military technology or training.
The Pentagon and defense contractors then turn around and
use the presence of advanced U.S. weapons in foreign arsenals
to justify increased spending on new leading-edge weapons back
home so that the United States can maintain its military superiority.
For instance, the export of F-15 and F-16 tactical fighters to
U.S. allies in Europe, Asia and the Middle East is being used
to justify the development of the F-22, the "next generation"
fighter that has already cost taxpayers $16 billion. Air Force
officials are already proposing F-22 production costs be offset
through overseas sales of the plane, which will undoubtedly provoke
calls for yet another new fighter.
But it's NATO expansion, the foreign policy centerpiece of
Clinton's second term, that offers the biggest potential bonanza
for U.S. weapons exporters. U.S. arms dealers are salivating at
the prospect of the new states upgrading and retrofitting their
militaries with Western weapons and equipment.
"The stakes are high," Joel Johnson of the Aerospace
Industries Association told the New York Times. "Whoever
gets in first will have a lock for the next quarter-century."
It's no coincidence that the globe-trotting president of the U.S.
Committee to Expand NATO is Bruce Jackson, whose other hat is
director of strategic planning at Lockheed Mar tin, which wants
its F-16 fighters to replace Central Europe's Soviet MIG-21s.
A bipartisan group of 20 senators, including Jesse Helms (R-NC)
and Patrick Leahy (D-VT), took issue with President Clinton's
contention that "NATO expansion is in our national interests."
In a joint letter, the senators expressed doubts about forcing
these relatively poor, fledgling democracies "to spend money
on arms, when expenditures for the infrastructure critical to
economic growth are more pressing." The letter promises "intense"
debate about NATO expansion in the Senate, which must ratify new
NATO members by a two-thirds vote.
Arms merchants and their Pentagon flacks are leaving no stone
unturned in their export drive. The United States is contemplating
the removal of a 20 year U.S. ban on sales of advanced fighter
aircraft to Latin America. Imposed during the Carter administration
when military dictators ruled most of the region, proponents of
lifting the ban argue that with the end of the Cold War and the
revival of democracy in most of Latin America, countries like
Chile or Brazil should be allowed to buy F-16s if they want them.
In a declaration issued at a Carter Center meeting in - April,
former Costa Rican president Oscar Arias warned that lifting the
ban would suck up money better spent on human development programs
and derail international efforts to ratchet down military spending
in volatile regions. Arguing that the removal of the ban "could
undermine regional military balances or stimulate an arms race,"
Sens. Joseph Biden (D-DE) and Christopher Dodd (D-CT) introduced
a bill in July to extend the export moratorium for another two
years. Clinton is expected to make a decision after he visits
Latin America in October.
Given that international arms sales exacerbate conflicts and
drain scarce resources from developing countries, why does the
Clinton administration push them so vigorously? The official answer
is, most often, jobs. But the government's own studies reveal
that this rationale doesn't hold much water. The Office of Management
and Budget estimates that for every 100 jobs created by weapons
exports, 41 are lost in non-military U.S. firms that must compete
with foreign companies that were granted access to the U.S. market
in indirect payment for weapons purchases. U.S. arms exporters
are also increasingly negotiating "offset" agreements,
which sweeten the pot for foreign buyers by sending production
(technologies and jobs) overseas along with American weapons.
Even as U.S. arms exports soar, some 2.2 million defense industry
workers lost their jobs between 1988 and 1996.
Political contributions by arms manufacturers reinforce this
cozy relationship. During last year's election campaign, the top
25 weapons exporters contributed $10.8 mil lion, according to
a study by the World Policy Institute. This marks a 56 percent
increase in political action committee (PAC) and soft money contributions
over the previous peak of $6.9 million during the 1991-92 election
cycle. The "leader of the PACs"-contributing more than
$2.3 million to last year's campaign-was Lockheed Martin, the
world's largest arms manufacturer.
Unlike in any other industry, U.S. taxpayers fully under write
the research and development costs for weapons systems. In 1995,
the arms industry successfully lobbied for the abolition of "recoupment
fees," a small government tax on foreign weapons sales that
brought in about $500 million each year to help offset R&D
costs. Arguing that recoupment fees made U.S. weapons uncompetitive,
the industry convinced Congress to allow the president to waive
U.S. dominance of the global arms market has been accomplished
as much through subsidies as sales: In 1995, more than half of
the $15 billion in U.S. arms exports was paid with government
grants, subsidized loans, tax breaks and promotional activities.
The result is a net transfer of dollars from the U.S. Treasury
to weapons manufacturers. Arms export subsidies are the second
largest category of corporate welfare, surpassed only by agricultural
Currently, 6,500 full-time government employees in the Defense,
Commerce and State departments are engaged in promoting and financing
weapons exports through a maze of programs. The Pentagon's Foreign
Military Financing program provided $3.2 billion in grants in
1995 to foreign countries-chiefly Israel and Egypt-to buy American
military equipment. U.S. AID Economic Support Fund grants totaling
$2.1 billion in 1995 went to help offset the costs of arms purchases.
The Commerce Department subsidized outstanding military-related
loans given by the Export Import Bank to the tune of $2.1 billion
in 1995. The Defense Department writes off another $1 billion
each year for bad or forgiven weapons-purchase loans to foreign
countries. Thirty-four countries, including Zaire, Turkey, Liberia
and Sudan, owe the United States $14 billion in military loans,
according to a 1996 Pentagon report; most of these loans will
likely be written off.
In 1995, Lockheed Martin and other defense industry giants
won congressional approval for the newest and potentially largest
subsidy package. The $15 billion Defense Export Loan Guarantee
Fund covers military contractor losses when foreign customers
cannot afford to honor weapons sales agreements. East European
NATO aspirants are now tapping this fund. In May, Romania became
the first country to use the fund to underwrite the purchase of
$23 million in unmanned reconnaissance planes.
The Defense Department also gives away, leases, sells at a
deep discount or lends surplus weapons stocks. "While other,
more visible forms of military aid have been cut since the end
of the Cold War, shipments of surplus arms through a variety of
programs have increased dramatically," says Lora Lumpe, director
of the Federation of American Scientists' Arms Sales Monitoring
Project. These giveaways-which include tanks, attack helicopters,
bombers and pistols-have been used to fan regional arms rivalries
(between Greece and Turkey, for instance) and to commit human
rights violations in countries such as Bahrain, Colombia and Morocco.
"Recycled Weapons," a 1996 study co-authored by
Lumpe, found that the U.S. military is giving away still useful
equipment in order to justify the procurement of new weapons.
The Air Force "Boneyard," a four square-mile stretch
of Arizona desert outside Tucson, provides rust-free storage for
5,200 planes, 75 percent of which are still in operating condition.
"We could have air superiority with what we have in the Boneyard,"
Rossiter of Demilitarization for Democracy told the New York Times.
Rather than trekking out to the Boneyard, potential buyers
more often show up at overseas air shows and expos, which are
also financed by taxpayers at an annual cost of about $125 million.
Once offering stripped-down export models, U.S. arms dealers at
today's arms marts display top-of-the-line diesel submarines,
portable surface-to-air missiles, jet fighters, missile systems
and other high-tech weaponry. If the price is right, any type
of weapon (except for nuclear, biological, chemical or long-range
missiles) is available.
In this era of balanced budgets and belt tightening at home,
the multibillion dollar bevy of subsidies for arms exporters needs
to be weighed against cuts in other government programs. The 1996
welfare reform law will cut federal support for poor families
by about $7 billion annually over the next five years, an amount
almost equal to the yearly subsidies given to U.S. weapons manufacturers.
There are parallels as well between some of the specific welfare
and warfare programs. The welfare law cuts child nutrition programs
by $500 million and food stamps by $2.1 billion a year. On the
other side of the ledger, arms export subsidies include recoupment
fee waivers of $500 million and $2.1 billion in U.S. AID Economic
Support Fund grants each year.
It is, in essence, the poor at home and abroad who pay the
price for escalating arms exports. In a joint statement issued
recently in New York, eight Nobel Peace Prize recipients-including
Oscar Arias, Elie Wiesel, Jose Ramos Horta of East Timor and the
Dalai Lama-who support an international Arms Transfer Code of
Conduct declared, "Millions of civilians have been killed
in conflict this century, and many more have lost their loved
ones, their homes, their spirit. In a world where 1.3 billion
people earn less than $1 a day, the sale of weapons simply perpetuates
poverty. Our children urgently need schools and health care centers,
not machine guns and fighter planes. Our children also need to
be protected from violence. The dictators of this world, not the
poor, clamor for arms."
But flanked against such eloquent, straightforward logic is
the mighty U.S. arms industry and its government allies. "The
brakes are off the system," says Lawrence Kolb, a Brookings
Institute fellow and former assistant secretary of defense under
Ronald Reagan. "It has become a money game: an absurd spiral
in which we export arms only to have to develop more sophisticated
ones to counter those spread out all over the world.... It is
very hard for us to tell other people the Russians, the Chinese,
the French -- not to sell arms, when we are out there peddling
and fighting to control the market."
Martha Honey is director of the Institute for Policy Studies'
Peace and Security Program.