Accused Russian arms dealer Viktor Bout is a centerpiece for the book Merchant of Death and the model for the Hollywood movie The Lord of War. He is the archetypal bad guy. Washington apparently traded military hardware to the Thais to get him extradited from a Bangkok jail.
Is Bout a major actor in the international arms trade, as Hollywood portrays him? In reality, he’s a penny-ante operator who can’t hold a candle to the real "merchants of death" like Lockheed Martin, BAE Systems, General Dynamics, Dassault Aviation, Finmeccanica, Boeing, Rosoboronexport, and Northrop Grumman. Bout is like the guy who sells you a Saturday night special in a back alley. If you want something that will flatten a village you need a Massive Ordinance Penetrator from Boeing, or a General Atomics "Reaper" drone armed with Lockheed Martin "Hellfire" missiles.
The former Russian naval officer is accused of running guns to the Revolutionary Armed Forces of Colombia (FARC), the Taliban, and anti-government insurgents in Somalia. The United States has sent some $5 billion in military aid to the Colombian government to fight the FARC, has spent over $300 billion trying to defeat the Taliban, and props up the current Somali government.
The global arms trade is a $60 billion yearly business. The United States controls nearly 40 percent of this trade, defending its turf with the ferocity of a junkyard dog. The 10 biggest arms exporters are — in order — the United States, Russia, Germany, France, the United Kingdom, Spain, China, Israel, the Netherlands, and Italy. Sweden and Switzerland are close behind. This order shifts from year to year, but one thing never changes: The United States is always No. 1.
According to the Congressional Research Service, due to the current economic downturn, world arms sales dipped 8.5 percent in 2009. But "dipped" is a relative term. The price tag was still $57.5 billion, of which the U.S. share of 39 percent came to $22.6 billion. Russia was second at $10.4 billion, and France third with $7.4 billion in sales. Other countries split the rest.
Most of the trade — $45.1 billion — focuses on developing nations. Of the top seven arms purchasers in 2008, four of them — India, Malaysia, Pakistan, and Algeria — are countries that can ill afford to put money into weapons systems. Brazil, Venezuela, Egypt, and Vietnam were also among the bigger arms buyers in 2009, and Iraq is planning to purchase $13 billion in U.S. weaponry. All are countries struggling with poverty.
The United States overwhelmingly dominates arms sales to the developing world. In 2008 it cornered 68.4 percent of such sales, and 45.1 percent in 2009. It is currently negotiating a $60 billion arms sale to Saudi Arabia that will probably cost $120 billion when parts and maintenance is added in.
Arms sales many times parallel the foreign policy of the suppliers. U.S. arms sales to Egypt, Israel, Jordan, Saudi Arabia, Kuwait, the United Arab Emirates, Colombia, Japan, and South Korea arm allies against regional antagonists like Iran, Syria, China, and Venezuela. Arms sales to places like Yemen and Somalia support U.S. allies caught up in civil wars.
Where the Profits Go
The arms trade is also an enormously profitable enterprise for the companies involved, and any effort to curb that trade brings on an assault of lobbyists and political action committees. Lockheed Martin, the world’s largest arms producer, spent over $20 million to lobby Congress in 2009.
The companies have carefully spread their operations to scores of states, so that when an effort is made to cutback or eliminate certain weapons, some local Congress member will rise to defend jobs in his or her district. When a move was made to cut the B-2 stealth bomber — an almost useless aircraft that cost $2.1 billion apiece — its manufacturer, Northrop Grumman, mobilized 383 congressional districts in 46 states to successfully save the plane.
In reality, military spending doesn’t create jobs, it kills them. According to a study by the Center for Economic and Political Research, military spending actually has a negative impact on economic growth. A 1 percent increase in defense spending — U.S. Defense Secretary Robert Gates’ current proposal — would, over 20 years, reduce GDP by 0.6 percent. That translates into approximately 700,000 jobs, with construction and manufacturing particularly hard hit.
While Gates talks about "efficiencies," he is not proposing to cut the military budget, just trim things like health care and bureaucracy and shift those savings to support troops in the field.
"The long-term impact of our increased defense spending will be a reduction in GDP of 1.8 percent," says economist Dean Baker. "The projected job loss from this increase in defense spending would be close to two million [jobs]."
The result of PACs and lobbying efforts by the arms companies isn’t only continued spending, but also expensive weapons systems that don’t work or are simply unneeded. The United States currently has 11 aircraft carriers, while no other nation possesses even one carrier that can match the huge $6.2 billion Nimitz-class vessels in the U.S. fleet.
Lockheed Martin’s taxpayer funded F-35 Joint Strike Fighter — at $184 million apiece, the most expensive weapons system ever built — is, according to arms analysts Pierre Sprey and Winslow Wheeler, an overweight, underpowered turkey that is so complex it will likely spend most of its time in the repair shop. Lockheed Martin is already taking orders from foreign buyers.
Many companies have responded to the recession by buying up enterprises specializing in defense electronics, cyber security, and the hottest new thing: killer robots.
Countries all over the world are clamoring to buy General Atomics’ Predators and Reapers, BAE’s Tiranis, and Israel’s Harpy and Heron, the latter a mega beast the size of a commercial airliner and capable of carrying a wide range of weapons. Predators run $4.5 million apiece while the larger, more muscular Reaper costs $10.5 million.
Bout on the Margins
The international arms trade will not even notice if Viktor Bout ends up behind bars. Men like Bout are shadowy actors that play on the margins. To have a real impact on the global arms enterprise will require confronting powerful corporations, with their lobbies and their PACs, as well as an immense military establishment. But according to Frida Berrigan of the Arms and Security Project of the New American Foundation, the Obama administration is "investigating" how to make the selling of military technology easier.
A number of NGOs, including Amnesty International, the International Network on Small Arms, and Oxfam, are working on an arms trade treaty that would try to keep weapons out of the hands of human rights abusers.
But "human rights abusers" is a slippery term. For the United States, Venezuela is a human rights abuser and can’t buy U.S. arms, while Honduras and Colombia are okay, even though regimes in both of the latter countries have been accused of working with death squads. Venezuelan President Hugo Chavez has not.
A UN conference on drawing up an arms trade treaty is set for 2012, although there have been no serious negotiations to date. But such a treaty will need to do more than just get a handle on some of the more odious practices currently underway. It must restrict and then move toward an eventual ban on the trade itself.