Mid-East Arms Market Bucks Recession: Tensions over Iran Propel Regional Weapons Sales

18.06.09

Categorie: David Axe, Finances, Industry, Iran |

I wrote this story for the apparently defunct Eurasia Critic Magazine. It was never published.

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by DAVID AXE

The global economic recession that began with bad loans and an over-inflated U.S. housing market has had a constraining effect on military spending, around the world. But military cuts are not occurring evenly or universally. In the Middle East, regional rivalries, an entrenched insurgency and tensions over Iran have resulted in steady spending that defies the global trend.

Deep cuts to major U.S. military programs are “highly likely” in the forthcoming 2010 budget, according to Admiral Mike Mullen, the top American officer. France and Poland are reducing their forces deployed for peacekeeping operations, as cost-saving measures. Russian president Dmitry Medvedev said he would cut 200,000 officers from the payroll and delay major equipment purchases until 2011. Even China announced a smaller-than-usual boost to its military top line: a 15-percent increase, as opposed to the average 18-percent rise in previous years.

But in the Middle East, the economic crisis has “had relatively little impact,” according to the International Institute for Strategic Studies, based in the U.K. Shrinking oil revenues for these countries have been softened by “budget surplus over several years,” according to the think tank, but the steady military investment is mostly threat-driven. Today, the Middle East overall spends five percent of its Gross Domestic Product on the military, more than any other region, according to IISS.

The region’s bigger national markets are responsible for the overall high level of investment, according to Forecast International. “Though the worldwide economic and financial downturn is likely to affect military expenditures in some of the smaller, poorer regional states, the market will be sustained by the buying strength of Saudi Arabia, Israel, the United Arab Emirates … and Iraq,” the U.S.-based analysis group predicted. Forecast International anticipated $70 billion in Middle-East military spending in 2009.

A major industry gathering in Abu Dhabi in February showcased the enduring Middle-East arms market. The five-day International Defense Exhibition, a biannual event, featured nearly 900 weapons vendors and was attended by around 150 government delegations. Deals signed at this year’s show totaled a record $5 billion.

The United States is the world’s largest arms dealer, by a wide margin. Sales to the Middle East account for a disproportionate share of these exports. In 2008, foreign militaries requested some $75 billion in government-brokered arms deals with Washington, up from $40 billion in 2007 and just $12 billion in 2005. Half of the proposed 2008 sales were to Middle Eastern governments, with Egypt, Israel, Iraq and the United Arab Emirates dominating the market. Small arms deals between foreign governments and private U.S. firms aren’t included in these figures.

Many U.S. arms sales to the Middle East are actually underwritten by Washington, in the form of grants that American allies can use to buy weapons. For 2009, Israel received $2.5 billion in aid; and Egypt, $1.3 billion.

Russia and China are also major weapons suppliers in the region, especially to Iran, a nation with few options on the world arms marketplace. In 2007, the U.N. tightened sanctions on Tehran over concerns that President Mahmoud Ahmedinejad’s government is actively pursuing nuclear weapons. The sanctions called on governments to “exercise vigilance and restraint” in selling arms to Iran. Despite this, Russia has reportedly agreed to sell Tehran advanced surface-to-air missile systems over Washington’s protests, and Beijing is allegedly providing several dozen new J-10 fighter jets that include some Russian components.

Regional Arms Race
Iran represents one side in the current Middle-East re-armament; U.S. allies Iraq, Israel, Egypt, Emirates and Saudi Arabia represent the other. China and Russia provide most of Iran’s imported arms. American provides most of the weapons for its friends. Both Washington and Moscow deny both profit motive and the existence of an arms race, instead characterizing the weapons they sell as “defensive.” “This is not about being gunrunners,” said Bruce Lemkin, a U.S. Air Force official who oversees many arms sales. “This is about building a more secure world.”

But Egyptian President Hosni Mubarak was less circumspect when he told his political part that “the Persians are trying to devour the Arab states.”  Forecast International is equally forthright, citing “worries over Iran” as the major driver of military investment by the Arab states and Israel.

In 2008, Iraq announced plans to buy 140 U.S.-built M-1A1 tanks as part of a $6-billion arms package. “One hundred and forty may be a fairly modest number compared to Kuwait’s more than 200 [M-1s] or Saudi Arabia’s more than 300 newer M1A2s, but the M1A1 is still an armored platform that makes Tehran squirm,” reported U.S. think-tank Stratfor. Even so, the M-1s were meant only for “internal security,” not a stand-off with Iran, Stratfor contended.

But the M-1s represent just a fraction of Iraq’s planned armored vehicle fleet. In early 2009, Baghdad said it would purchase 2,000 Russian T-72 tanks, sourced from Eastern Europe and rebuilt by an American firm, Defense Solutions. “We take the vehicle all the way down to bare metal and back up to a fully modernized vehicle,” said CEO Tim Ringgold. The tanks would be “better than what Iran has,” Ringgold added.

Notably, the planned Iraqi tank fleet would be at least as large as the force Baghdad possessed prior to wars with the U.S., at a time when Baghdad’s major focus was on countering Iran. By the same token, “the modernized T-72s would largely be a deterrent against Iran,” said Michael O’Hanlon, a U.S. military analyst.

Emirates is also building up a relatively enormous arsenal, “motivated by regional threat perceptions about Iran,” according to Foreign Policy magazine. The tiny country invests far more, per capita, in its military than any other country in the Middle East. From 2000 to 2007, Egypt, with 80 million people, spent $12 billion on U.S. arms; Emirates, with just 5 million people, spent $11.5 billion, more than Israel and Saudi Arabia. Emirates’ purchases included 80 of the most advanced version of the U.S. F-16 fighter, plus 60 Mirage 2000 fighters from France, giving the tiny country more modern combat aircraft than Iran.

Iran Reality Check
Massive military investment by Arab states and Israel, on the pretext of deterring Iran, ironically have resulted in a substantial imbalance in the region. Iran’s resources, and its access to the modern arms market, are more limited than its neighbors’. As a consequence, in conventional military terms, Iran ranks inferior to the constellation of U.S. allies that opposes it.

“The Iranian ground forces remain incapable of modern combined-arms combat,” American think-tank Globalsecurity claimed. What’s more, “Iran’s air and air-defense forces are the weakest link in the overall defense posture of the country” owing to outdate aircraft and tactics, according to the think tank. “The Iranian air force is not a threat to the [Israeli air force],” one Israeli officer told The Jerusalem Post. “Israel’s greatest threat these days comes from Iran and their efforts to obtain nuclear power,” the officer added.

The imbalance between Iranian forces and those of its rivals has created a spiral effect that has only accelerated the militarization of the Middle East. To compensate for its conventional military inferiority, Tehran has focused on developing nuclear weapons and associated ballistic missiles “as a cost-effective way of countering the stronger air forces of its neighbors,” according to Globalsecurity. That, in turn, has driven regional interest in U.S-made missile-defense systems, according to James McAleese, from McAleese and Associates in Virginia. “There’s been a lot of news about the UAE and others purchasing more mature terminal [missile] defenses.” The “system of choice,” he says, is the PAC-3 version of the famed Patriot missile, pictured. “That’s the easiest way you would address potential Iranian issues.”

While Iran remains the central issue for the overall Middle-East arms market, Iraq for one is also re-equipping to combat domestic insurgents. That threat has boosted interest in U.S-made systems for intelligence, surveillance and reconnaissance, McAleese says.

Like others, McAleese projects steady demand for arms in the Middle East — and sustained willingness on Washington’s part to provide and even underwrite much of the weaponry. The way McAleese describes it, U.S. interest in the region is about more than profit. He says there’s growing consensus in Washington that it’s cheaper in the long run to reinforce allies’ military capabilities than it is to skimp on weapons exports and allow those allies to be threatened. That, McAleese says, could result in the U.S. intervening with its own forces, perhaps sparking a trillion-dollar war that it can no longer afford.

(Photo: Militaryphotos.net)

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5 Responses to “Mid-East Arms Market Bucks Recession: Tensions over Iran Propel Regional Weapons Sales”

  1. [...] The tensions over Iran have led to huge increases in conventional arms sales to the Middle East: http://warisboring.com/?p=2287#more-2287 [...]

  2. [...] Faced with upgrading enemies and a hostile world, 20+ year old designs can’t pass muster. We fight dirty small wars now, but the future is not set. Our allies in the middle east are upgrading their missile defense with our latest weapons. Shouldn’t we upgrade our air force with the best and the latest air craft? Even Boeing does not believe that it’s Silent Eagle has a future. Possibly related posts: (automatically generated)War and peace: Why we upgrade II, Electric Bugaloo…What Might Have Been: A-10’s for the Army?IranRussia’s S-400 secures Belarus airspace [...]

  3. 111 says:

    If the pic sums it up at all up then we are talking about MLRS rockets. Let’s talk about Hizbullah firing rockets into Israel. Let’s talk about Ied’s in Iraq and Afghanistan. Let’s talk about arms trafficking to the fediyin and the muhajideen. Let’s talk about the known collaboration with IRGC and the Sheites they are harboring in the Al Sadr regime. Irans military arms brokering is smelling more like a cistern. But let us not forget, these are russian arms they are selling off…

  4. [...] No one knows how the escalating protests will play out, in the end. More broadly, regional worries over Iran have propelled a lucrative arms market, dominated by U.S. defense firms. While most countries cut back their military spending, due to the global recession, many of Iran’s neighbors are continuing years-long shopping sprees for high-tech arms, apparently aimed at building an iron wall around Iran. Egypt, Israel, Iraq, Saudi Arabia and the UAE account for the majority of sales, projected to total $70 billion, this year. The bulk of the sales are for fighter jets and missile defenses. [...]

  5. [...] Den amerikanske våpenindustrien tjener godt på at Iran oppfattes som farlig: regional worries over Iran have propelled a lucrative arms market, dominated by U.S. defense firms. While most countries cut back their military spending, due to the global recession, many of Iran’s neighbors are continuing years-long shopping sprees for high-tech arms, apparently aimed at building an iron wall around Iran. Egypt, Israel, Iraq, Saudi Arabia and the UAE account for the majority of sales, projected to total $70 billion, this year. The bulk of the sales are for fighter jets and missile defenses. [...]

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