Thursday, August 28, 2008

Foreign Military Sales in 2007

Thanks to a Freedom of Information Act request from the Federation of American Scientists' Arms Sales Monitoring Program, we now have data about weapons and equipment that the U.S. government sold to the rest of the world through the Foreign Military Sales program in 2007.

Foreign Military Sales (FMS) is one of two programs through which military equipment is sold from the United States to the rest of the world. FMS is the means through which the U.S. government sells items directly to other governments. U.S. corporations can sell directly to other governments as well; those sales are licensed by another program, Direct Commercial Sales (DCS).

A total of $348,056,000 in military equipment was sold to Latin America and the Caribbean through FMS in 2007. Another $846,274,296 were licensed that year through DCS, but the U.S. government does not track how many of those licenses end up being fulfilled and resulting in actual equipment deliveries.

The FMS figure maintains levels reached in 2005 and 2006, when Chile took delivery on high-tech F-16 fighter planes. Purchases from Colombia are the reason why the regional total remains high. Colombia bought $231,384,000 worth of military equipment through FMS in 2007, almost exactly two-thirds of the regional total.

Here is how FMS deliveries have evolved in the region between 1996 and 2007.

And here is how all arms sales, from FMS and DCS combined, have behaved during that time period. Keep in mind that a significant portion of the DCS licenses have not ended up as actual deliveries of equipment.

Finally, here are the top 10 types of items sold to the region through FMS in 2007:

1. Helicopter, UH-60: $148,712,000
2. Aircraft Spare Parts: $42,372,000
3. Aircraft Cargo C-130 Series: $29,805,000
4. Repair and Rehabilitation: $20,225,000
5. Other Weapons and Ordnance Equipment: $14,753,000
6. Other Services: $12,332,000
7. Logistics Management Exp: $8,070,000
8. Training: $6,992,000
9. Supply Operations: $5,522,000

Monday, August 11, 2008

U.S. arms sales increase - but as one of many vendors

The latest yearbook of the Stockholm International Peace Research Initiative (SIPRI), published in June, notes a sharp increase in arms transfers to South America.

SIPRI data show the volume of international arms transfers to South America in the period 2003–2007 to be 47 per cent higher than in 1998–2002. Despite attention-grabbing headlines and some evidence of competitive behaviour (e.g. the nature and timing of acquisitions by Brazil, Colombia and Venezuela), it seems unlikely that South America is in the midst of a classically defined arms race. Acquisitions have been primarily motivated by efforts to replace or upgrade military inventories in order to maintain existing capabilities; to respond to predominantly domestic security threats; to strengthen ties with supplier governments; to enhance domestic arms industry capability; or to bolster regional or international profile.

Arms transfers to the region, especially Russia's multi-billion-dollar sales to Venezuela, have been the subject of an increasing amount of media coverage. Occasionally this coverage raises the specter of a regional arms race as countries, their treasuries full due to rising commodity prices, go on weapons-buying sprees in the United States, Europe and China. Other analysts, like those at SIPRI, contend that the term "arms race" is inaccurate, that the region's militaries are merely replacing old, worn-out equipment.

Some countries, particularly Venezuela, Colombia and Chile, are clearly adding new capabilities rather than upgrading old ones. While an arms race is not yet underway, the recent spike in purchases raises the possibility that neighboring countries will feel pressure, particularly from their defense sectors, to keep up. Those civilian leaders who resist increasing defense expenditures to "keep up" may experience friction in their relations with their armed forces.

SIPRI tracks arms transfers throughout the entire world, while the "Just the Facts" project focuses in detail on the United States' role in Latin America and the Caribbean. Do our data show U.S. arms sales to be part of the region's upward trend in arms purchases?

Yes, they certainly do: U.S. arms sales to the hemisphere are increasing. But these increases are not dramatic, and if estimates of arms sales from Russia and elsewhere are correct, U.S. sales are well under half of the regional total.

The section of the "Just the Facts" website that monitors U.S. arms sales - weapons and equipment that countries purchase with their own money, not those they receive as grants from the U.S. government - is here. This data forms the basis for the charts below.

Data show that U.S. arms sales to the region are up, but not sharply. The chart below shows that U.S. arms sales shrank in 1999, 2000 and 2002, a time of poor economic growth in the hemisphere. (The spike in 2001 owed mainly to Argentina making a large one-time purchase of satellite parts, and Colombia buying several helicopters to complement those they were receiving under the "Plan Colombia" aid package.) However, even the 2004-2006 increase merely represents a return to levels last seen in 1996-1998, the last period of robust macroeconomic growth in the region.

The chart shows the three programs through which the U.S. government approves or executes weapons sales. Two concern us, as they make up nearly all sales. The red is Foreign Military Sales (FMS), which manages the U.S. government's arms and equipment sales to other governments. The blue is Direct Commercial Sales (DCS), U.S. government licenses for weapons sales made directly from U.S. companies that manufacture arms and equipment. Two notes:

  • The U.S. government has not made 2007 FMS data available yet. This delay is not unusual, but it means we cannot give an accurate accounting of 2007 arms sales and our chart must end at 2006.
  • While the U.S. government records all the licenses it issues, it does not track how many of these licenses actually result in final sales and deliveries. The total amount of final arms sales through DCS is probably much lower than the licensed total portrayed here - lower by perhaps $100 millon or more.

The next chart shows the same amounts, broken down by country. It reveals that our arms-sales data are a bit distorted by high-tech sales of dual-use equipment to two non-sovereign states. The French territory of French Guiana (orange), from which the European Space Agency frequently launches satellites, and the Cayman Islands (brown), a U.K. territory, both show large periodic increases, mainly due to sales of commercial satellite equipment.

Looking at only sovereign states in the region brings a few U.S. sales trends into much sharper relief. The chart below removes French Guiana, Cayman Islands and other territories from the picture.

We see that arms sales bottomed out in 2003, then began rising sharply in 2004-2006, led by Mexico (blue), Colombia (green) and Chile (orange). Mexico's largest purchases in this period are a satellite, aircraft parts and electronic equipment. Colombia increased purchases, especially helicopters, to employ in its internal conflict. Chile took delivery on high-tech F-16 fighter planes; its constitution reserves a share of Chile's skyrocketing copper-mining revenues for military procurement.

Venezuela (yellow) - the United States' number-one customer in the 1990s thanks to its oil money - is now down to almost no sales at all. A ban on U.S. arms sales whent into effect in 2006 after the U.S. government determined that Venezuela's government was "not sufficiently cooperating" in anti-terrorism efforts. Venezuela's oil-fueled military buildup - including at least $2 billion in purchases from Russia alone - is not generating any income for U.S. arms-makers.

Argentina's (purple) reduced share of arms purchases is more a result of defense-expenditure cutbacks than a reflection on relations with the United States.

It is not clear why Brazil (red) has reduced its purchases from the United States. Brazil's larger purchases during the late 1990s through 2000 were mainly related to aircraft and radar. Some may have been related to Brazil's construction during that period of an aerial Amazon Surveillance System (SIVAM).

As mentioned, the spike in 2001 was principally Argentina buying satellite parts, and Colombia buying some helicopters on its own to accompany those that the United States granted via Plan Colombia.

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