War in the Middle East: follow the money

From Der Spiegel:

Weapons Sales to the Arab World under Scrutiny

By Benjamin Bidder and Clemens Höges

Bernhard Zand/ DER SPIEGEL

In recent years, Western countries have made a bundle selling arms to Arab despots. But, as with Libyan leader Moammar Gadhafi, some of yesterday’s buyers have become today’s enemies. Now major weapons exporters must seek a new balance between arms profits and human rights.

The revolutions in the Arab world caught British Prime Minister David Cameron off guard. For some time, diplomats had been planning a trip for Cameron that would take him to several countries in the Middle East. In fact, it was meant to be more of a trade mission, with Cameron’s delegation consisting largely of high-level executives from Great Britain’s weapons industry.

But then came the revolutions in Arab countries and the fighting in Libya. Ignoring them was impossible, and Cameron added a six hour stopover in Cairo to his already tight schedule. It was almost exactly a month ago that he visited Tahrir Square in the center of the city, the focal point of mass demonstration which ultimately forced Egypt’s aging leader, Hosni Mubarak, out of office.

“Meeting the young people and the representatives of the groups in Tahrir Square was genuinely inspiring,” Cameron said. “These are people who have risked a huge amount for what they believe in.”

From Egypt, Cameron flew on to Kuwait, where he got down to the real purpose of his trip: selling weapons to Arab autocrats. When members of parliament back home attacked him for this lack of tact, the prime minister insisted there was nothing wrong with such business transactions and that, in any case, his government made weapons buyers pledge to not use them to violate human rights under any circumstances. Great Britain, he said, has “nothing to be ashamed of.”

Britain, though, has exported over €100 million ($142 million) in weapons to Libyan dictator Moammar Gadhafi in the last two years alone. Included in those shipments are sniper rifles that may currently be in use against the Libyan opposition. Furthermore, Gadhafi’s terror police are British-trained. Indeed, British officials were forced to hastily revoke 50 arms export licenses to Libya and Bahrain.

Friends of Convenience

Cameron now finds himself in a tight spot shared by many Western politicians. Policies that seemed fine prior to the revolutions are now questionable. Regional paradigms are shifting and, at a time when populations are throwing off the yoke of oppression, Realpolitik is a poor guide to Western policy.

Until recently, the West had been arming despots in the Arab world with a series of ever-larger, billion-dollar deals that served to stabilize their regimes. Some are close allies when it comes to Iran and al-Qaida, making questions about human rights and democracy secondary.

In addition, many of the region’s potentates were convenient partners for the West: They had their people more or less under control, and some provided oil. Even Gadhafi proved useful by keeping poor African refugees out of Europe. Likewise, many of the rulers bought whatever the West’s defense industry put up for sale.

The Ascent of German Arms

This was certainly also the case with Germany’s defense industry. According to the Stockholm International Peace Research Institute (SIPRI), though it still lags far behind the United States and Russia, Germany has become the world’s third-largest weapons exporter in recent years.

Indeed, SIPRI statistics show that, over the last decade, the German defense industry’s share of the global arms market has doubled to 11 percent. In 2008, the total value of these arms sales amounted to just under €6 billion. Germany primarily supplies high-tech items, such as submarines and military electronics. German defense corporations — such as EADS, Rheinmetall and Heckler & Koch — together employ roughly 80,000 people.

German military wares are so good that even Russia has become a reliable customer. Although Russia’s own products are perfectly suited for guerilla warfare in Africa, Russian Defense Minister Anatoly Serdyukov admits that they no longer meet “modern requirements.”

For this reason, Russia plans to order military hardware worth nearly €500 billion by 2020, including many items from the West. The Russian army would like to replace its T-90 tanks for the German Leopard 2, and Rheinmetall is to provide armored plating for other Russian vehicles. Even Russia’s mobile military camps will soon be “made in Germany.” Kärcher Futuretech, a company based in Winnenden, near Stuttgart, manufactures the finest in field kitchens and water purification systems.[…]

From Le Monde Diplo:

by Samir Aita
[…] Monarchies in the Arab world have been absolute, and life-long presidents (with hereditary office) ruled the republics, because they created a supreme power above both state and post-independence institutions (1). They set up and controlled their own security services to ensure that their powers would endure; the services escaped parliamentary or government supervision, and their members could reprimand a minister and impose decisions. It costs money to run such services, and the clientelist networks of one-party states. The funds derive not from public budgets, as do those for the police and the army, but from different sources of revenue. (The New York Times recently reported that Muammar Gaddafi had demanded in 2009 that oil firms operating in Libya should contribute to the $1.5bn he had promised to pay in compensation for the Lockerbie terrorist murders – or lose their licences. Many paid. And Gaddafi’s immediate cash holdings of billions of dollars are thought to be funding his mercenaries and supporters to defend him.)

After the spectacular 1973 rise in crude oil prices, Middle Eastern revenues increased considerably. Through the distribution circuits, and in collusion with major multinationals, part of the revenue went direct to the coffers of the royal or “republican” families instead of to the state. Nor was oil their only source of revenue. After there were no more commissions on major public contracts, civil and military, because of budget deficits and structural adjustments, new opportunities arose. In the 1990s there were mobile telephone network launches, and the first major privatisations of public services, with public-private partnerships and build-operate-transfer (BOT) contracts. Mobile networks had massive margins, especially at the start when better-off clients were prepared to pay high prices. The major multinational operators, influential businessmen and governments fought to capture the income. (There is evidence for this in the legal dispute over Djezzy, the Algerian branch of the Egyptian operator Orascom, and the Algerian military, and in a previous dispute between Orascom and Syria’s Syriatel, which happened just as the first large Arab multinationals emerged.)[…]

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