Deals, Corruption, and Leader Involvement in Arms Sales

There have been a number of interesting stories piling up in my reader over the past few days.  I have wanted to get to them, but have also been trying to finish up the last chapter of my dissertation.  Priorities are fun.  This is what I'm doing on my break.

India

As a follow up to my post last week (here) about Russian corruption is an interesting story out of India.  India made a deal for helicopters with Finmeccanica (Italian firm), which now appears to be the result of bribes paid.  Now the Indian government is threatening to cancel the rest of the contract if the allegations prove true. (Read more here)

(And more here)

More from India.  India wants to start producing more of its own arms, particularly aircraft.  However, it is having difficulty because the firm that could potentially produce arms is so inefficient as to make this an untenable prospect.

James Hardy, an analyst at the defence consultancy IHS Jane's, says that HAL is "overextended", expressing an opinion largely shared by observers at home and abroad.

More here

Russia and Syria
Russia is continuing to supply the Syrian government with weapons from contracts that were already in place.

The head of Russia's arms exporter Rosoboronexport, Anatoly Isaikin, said Russian deliveries to the Syrian regime of President Bashar al-Assad included air defence systems but not the advanced Iskander missiles sought by Damascus. 

"We are continuing to fulfill our obligations on contracts for the delivery of military hardware," Isaikin was quoted as saying by the Interfax news agency.

Link

But Russia is not smuggling tank parts into Syria. (Link)

France and India

As part of my dissertation I am looking at the involvement of state leaders in arms deals.  I got a special gift from France's president Hollande on Valentine's Day.  The French President led an entourage to India to "clinch the world's biggest defense deal" in India.  The deal is a $12 Billion sale of 126 aircraft.  Along with this deal there are negotiations about French involvement in to help build a nuclear power plant in Maharashtra.

Link

The Enemy of my Friend - India Pakistan and Russia

This article popped up in my news feed this morning.  It is about Russia's anger that India is purchasing fighters from France. The gist of the argument is that Russia has been India's "true strategic partner" since the 1960s.  The evidence for this is that Russia has voluntarily abstained from selling weapons to India's primary enemy, Pakistan.

Russia now feels betrayed that India is not rewarding that loyalty. India is still the largest customer of Russian arms.  However, if India continues to seek alternatives, Russia could find a lucrative source of income drying up or at least becoming more difficult to assure.

Here is the money quote from the head of Rosoboroneksport:

“We do not sell military equipment to Pakistan, only because of our loyalty to India. But all other nations, with whom India does business, sell their weapons and systems to Pakistan. We are India’s true strategic partners.”

I had the data for arms networks laying around (for my dissertation) so I quickly put together graphs for both India and Pakistan.  These are the ego networks for the two states, which means that these are not the full world arms network, only those states involved in sales to either India or Pakistan.

Neither of these two graphs shows much difference in the composition of states selling weapons.  In the Pakistan network, shown at the bottom, Russia is located at the edge of the graph and is not selling directly to Pakistan.  In all other respects, though the networks are very similar.

I guess the question is now to what extent Russia has deliberately not sold to Pakistan.  If Russia has made a decision not to sell that is one thing.  If Pakistan has not tried to buy because it was being supplied by the US and its allies and wanted to maintain that source for its weapons, then this is a different conversation. The idea that Russia is engaging in a deliberate version of Heidegger's rule (The enemy of my friend if my enemy) is what is most fascinating to me about this entire episode.

Russia's Defense Fraud is Larger than Most States' Defense Budges!

File this under horrifying comparisons.  A report today from Moscow (link to news story) about the amount of fraud in the defense industry is simply staggering.

The Russian Audit Chamber has identified waste and misappropriation totaling almost 117.5 billion rubles – just over $3.9 billion at today’s rate – in the area of national defense, the first deputy head of the State Duma's Defense Committee, Viktor Zavarzin, told reporters, after a closed-door committee meeting attended by officials from the Defense and Finance Ministries, the Prosecutor General’s Office and other agencies.

That is a lot of money.  In order to put this into context I put together a quick visual using 2011 defense spending data from SIPRI. I had to download the data in an excel file and clean it up a bit.

Russian corruption in the defense sector is more than the median military spending by most states in the international system.  Average military spending is highly skewed by the US and China, which are not included in the graph above because of the way they ruin the scale.

What does all of this mean?  It means that it can be very lucrative to be involved in the defense sector in Russia!

None of this information by itself is really surprising and I've alluded to problems of corruption in previous posts.  The sheer scale of that corruption when put into context is simply staggering.

*NOTE:
Click on this link to obtain a zip file that has the SIPRI data for 2011 in a CSV file along with the STATA .do file I used to create the graph.    -Replication Materials-