Showing posts with label arms industry. Show all posts
Showing posts with label arms industry. Show all posts

Thursday, February 15, 2018

The complexity of Arms Sales

A recent article about India's pursuit of advanced aircraft illustrates the complicated world of arms transfers.

The article itself is correcting some misinformation that India was going to purchase the F-35 and open up some joint manufacturing facilities for the aircraft there.  It turns out that initial inquiries into the possibility of F-35s in the future was confused with a current bid for the purchase of F-16 fighters.  India is looking to upgrade its aircraft but is in the bidding stage with both Saab and Lockheed Martin.

In both cases, the Indians will open factories to perform final assembly.  Such licensing and joint production is common.  F-16s are manufactured in Turkey under a similar agreement, for example.  The F-35 is a unique program because it is being built on licensing and co-production from the very beginning with partners all over the world.  It is a complex and collaborative endeavor that relies on pre-existing alliance ties and mutual trust and support. 

India is not approved for the purchase of the F-35 at this time.  The authors of the article noted that the issues of technology transfer that are more acute with this particular advanced aircraft.  The components are more advanced and there is a real worry that the technology could fall into the wrong hands.

For me this article is fascinating because it touches on so many of the complex and fascinating aspects of arms sales that I have been thinking about for the past few years.  The first is the importance of relations and relationship building.  There is a great deal of high-level negotiation that takes place for these arms deals - because they must be approved (in the case of the US) by the State Department working with the Department of Defense.  It is not just a mater of defense firms going out and making sales.

The complexity of licensing and production deals is another aspect of arms transfers that is unique.  There is an incentive for many states to build their own capacity while they purchase weapons systems.  This makes sense from a realist perspective of anarchy and fits with the logic of internal balancing outlined by Morrow (1993).  States don't want to be too dependent on arms imports because it limits their own actions.  States that wish to play a more independent role in international relations will avoid becoming too dependent on a supplier.

Even if the production facilities are mainly symbolic, they offer some work, build native capabilities, and establish the state as being less dependent than a state that simply imports finished arms. My current thinking about arms is about the ways that they are used to socialize states, and the use of licensing deals is an avenue that needs to be explored in more depth.
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Morrow, James D. (1993) Arms Versus Allies: Trade-Offs in the Search for Security. International Organization 47: 207–233.

Tuesday, February 6, 2018

State Interests and the Business side of Arms

How do we measure the impact of non-state actors on state policy? I ask because I am generally curious.  I am curious because the answer that question is essential to understanding the complexity of the issue of arms in international relations. I think that the disconnect between the firms that produce weapons, and the states that regulate their sales and purchase them is one of the biggest barriers to really building general theories of arms transfers.

My most recent work on arms transfers relies on a constructivist/role theoretical framing of the state as a corporate actor.  The state has interests and acts deliberately (not always rationally, but deliberately) to advance those interests. Personifying states and accounting for the effects that come through the interaction of these agents is not necessarily new.  However, trying to account for many moving pieces beneath the surface and how they interact to produce the actions and outcomes we can see is still necessary for some degree of understanding.

How does this all relate to arms sales?  Well there are two stories that appeared in my reader this week that have made me think about this issue more deeply than I have for years - probably since I was drafting the first chapter of my dissertation six years ago.

The first story is about the struggles of the Italian defense firm Leonardo.  The firm was recently renamed (previously it was Finmeccanica) after it had troubles with scandals.  Now it is having trouble with orders and generating revenue, and its stock has plunged.  This particular line from the article really jumped out at me:

Leonardo, Europe's largest maker of military hardware after BAE Systems and Airbus, said it hoped to return to "sustainable growth" over the next five years thanks to a new sales strategy, accelerating orders, strict cost control and a better financial strategy.
I wonder about the model for sustainable growth in a defense firm that operates independently. It also operates in an environment where government (both Italian and EU) control over exports can limit the potential sales of the firm. Others have studied this economic paradox regarding arms before - and the original SIPRI arms classifications of hegemonic, industrial, and restrictive supplier accounted for the government policies regarding arms.  Italy is an industrial supplier.  It needs to sell arms in order to support internal business.

The tension is that the Italian government and the EU code restrict arms exports. In deciding how to allow firms to operate and to sell weapons, governments are faced with choices about what the most salient state interest is.  Is it to have a strong defense industry (or any industry) and to generate employment and exports, or is it to operate "responsibly" on the world stage?

The set of choices for state interests is also not simply a dichotomous choice between native industrial capacity and responsible action.  State interests in alliances and other relationships, security for client states, preferences for regional leadership in areas outside their own, or simply state prestige can affect the state's desire to control arms outflows.

That brings me to the second article.  This is a follow up to my post from last week about Trump's new "Buy American" plan.  The United States is sending a State department official to a defense expo in Singapore to promote the sale of US weapons - especially aircraft and missiles.

Whether it is misguided or not [and I am not convinced either way], the Trump administration has determined that it is in America's interest to sell weapons.  The export, balance of trade, and American manufacturing arguments will play well domestically and I think that is one of the primary drivers of the policy. However, the international implications of expanding arms sales could be just as significant - and those implications could be either positive or negative.  US arms purchases can signal greater cooperation with states in the future.  It can signal a willingness by states to improve their own defense capabilities.  Such a signal may make the US more willing to extend further security guarantees, or negate the need for the US to provide the majority the security for particular states or regions (Yarhi-Milo et al 2016).

Whatever the reason for the new emphasis, the outcome will likely be more arms sales.  Researchers will certainly be looking at the effects of those transfers in the years to come.
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Yarhi-Milo, Keren, Alexander Lanoszka, and Zack Cooper. (2016) To Arm or to Ally?: The Patron’s Dilemma and the Strategic Logic of Arms Transfers and Alliances. International Security 41: 90–139.

Friday, June 3, 2016

Arms Odds and Ends (June 3, 2016)

Canada

Sometimes Canada gets good press, and sometimes bad.  The decision of the liberal government to continue a sale of armored vehicles to Saudia Arabia is turning into quite a political scandal. (LINK) Arms sales are fascinating precisely because of the highly political nature of these sales and the very real economic and security issues (domestically) that play into arms export decisions.

Nigeria

Nigeria has lost over $15 billion dollars due to arms acquisition corruption (LINK).  I wrote about Russia's own fraud problem a few years ago with some nice graphs.  Check it out (LINK)!

Russia

A good analysis of the effect of the economic crisis on Russia's military modernization process (LINK).

Another article examines problems within the Russian arms industry.  Some of this stems from corruption, some from incompetence.  (LINK)

On an unrelated (but not completely) note: more evidence that Russia is very concerned about the perceived legitimacy of its annexation of Crimea domestically (LINK). The political effects of the sanctions would be much worse if there wasn't a rally effect based on a widely-shared belief that Russia's actions were righteous and justified.

Thursday, October 8, 2015

Russia and Syria - Arms Related Issues

Russia is now involved in the war in Syria.  Air strikes and naval bombardment along with cruise missile launches, along with the addition of ground troops as advisers is serious business.  The potential for adverse international incidents has increased.  The fighting in Ukraine is contained.  The fighting in Syria is taking place in the context of continued Western and US airstrikes.  The potential for a direct military confrontation between the US and Russia is higher than it has been for a long time.

I am interested in Russia's endgame here.  I am curious as to what Putin thinks he will gain. I just started reading a great book that analyzes Putin's actions, and this quote really jumped out at me:

"...we cannot take any story or so called fact at face value when it comes to Vladimir Putin ... we are dealing with someone who is a master at manipulating information, suppressing information, and creating pseudo-information...In today's world of social media, the public has the impression that we know, or can easily know, everything about everybody.  Nothing, it seems, is private or secret.  And still, after 15 years, we remain ignorant of some of the most basic facts about a man who is arguably the most powerful individual in the world, the leader of an important nation.  When there is no certifiably real and solid information, any tidbit becomes precious." [1]
This jumped out to me again when I watched the Daily Vertical podcast about Putin challenging the western world's way of thinking and facts (LINK).  While I don't think I have any really new insights into what Russia is doing and thinking, I can at least make some observations about the effects of what they are doing in an area that I do have some insights into: arms transfers.

Negative and Potential Negative Consequences for Russian Arms Sales

I have already covered the issue of the Mistral ships.  Russia lost these ships as a direct result of their actions in Ukraine.  The latest word is that Egypt is going to purchase these ships, which is good for France (LINK). Is there a potential that Russia will lose out on other purchases?  Yes, but Russia doesn't import a lot of equipment, so for them, this is just a temporary setback.

The more serious setback for Russia would be if states began cancelling orders for weapons after seeing their actions.  This is a real possibility.  Turkey is very upset at Russia over incursions into its air space as Russia began its air actions over Syria.  This has already had an effect on a joint pipeline project (LINK), and has the potential to damage other relations.  Russia and Turkey have cooperated on helicopter manufacturing in the past (a case study from my dissertation), and if Turkey sees Russia becoming a security risk, it will likely move away from such relations.

The performance of Russian equipment in Syria is also a potential negative side effect.  If Russian equipment performs poorly (like reports of four cruise missiles crashing in Iran instead of hitting targets in Syria (LINK)), then potential customers may decide to look for other options.

Potential Positive Consequences for Russian Arms Sales

There are two potential positive consequences of Russian actions in Syria from the point of view of Russian arms sales. The first is the converse of the last point made above: positive performance by Russian equipment is free advertising for Russian arms.  Seeing weapons tested in combat and working is a great selling point to potential customers.

Other current and potential customers will take note of the point above and may also see the arms relationship becoming a proxy for more formal alliances, thus making continued arms purchases, or new arms purchases more attractive to buyers.  Venezuela recently expanded its arms deal with Russia (LINK), as has Thailand (LINK).  Interestingly, the deal with Thailand appears to be a barter deal for rubber.  This could be an effect of sanctions.  Thailand has been diversifying its arms portfolio in recent years.

Potential Positive Effects for US Arms Sales

For the US, Russia being seen as an aggressor may potentially make arms sales to neighboring states a higher priority.  States will see this as a way to further integrate with existing US-led defense pacts (NATO), and a way to strengthen and emphasize military ties. Norway, for instance, recently added more planes to its F-35 order because of Russian aggression and escalation in the Baltic and North Sea areas (LINK).  This will be dependent on whether states are satisfied with US military hardware, however, which in some recent cases doesn't appear to be the case (LINK).

Other Geopolitical Consequences

Just because I am not going to spend time trying to figure out Putin's motivations, does not mean that I won't point out some geopolitical consequences of Russian military adventurism. The most obvious is that Russia's fears of NATO are now becoming a self-fulfilling prophecy as NATO moves to bolster its powers along Russia's borders and to strengthen commitments to states bordering Russia's active military adventures (Poland, Turkey) (LINK).  It is also leading, it appears, to a strengthening of the US resolve on the issue of Ukraine (LINK).

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[1] Hill, Fiona and Clifford G. Gaddy. 2015. Mr. Putin: Operative in the Kremlin. Brookings Institution. p 7.

Saturday, August 29, 2015

Link-O-Rama: Arms Edition

Apologies and Excuses


So much for resolutions! (Link) A bold prediction about my future blogging awesomeness followed by 1 post in 5 months is not a stellar beginning.  In my defense, the past 5 months have been as busy as any in my life.  These are the highlights of the past five months:

  • The end of the semester
  • chairing our graduate admissions committee
  • A trip to the US to sit on a hiring committee
  • A trip to the US a week later to attend a seminar at Brigham Young University
  • Graduation
  • A trip to Poland for a conference
  • A vacation to the US for 5 weeks to visit family
  • The return to Astana to start the new semester with a new role: acting department chairIn addition to the normal activities of getting ready for the semester (preparation of syllabi, courses, etc) I have had the new administrative tasks associated with my new position.  I also had an article accepted for publication that needed work to be ready for the publisher.  I have also been scrambling to put together my paper for the American Political Science Association Meeting (APSA) which is next week. 

I now have a better understanding of the wisdom of my PhD advisers who emphasized that life after graduate school was more busy.  The pressures and activities are a bit different, but it is definitely busy.

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Arms Links

With the preamble over, I am now going to post links to articles about arms.  I am doing this in conjunction with my PLS455/555 Politics of Arms in International Relations course at Nazarbayev University. I thought this would be a good resource for my students as they begin their case study assignments for the course. It is also a good way for me to organize these links and resources and to put together some initial thoughts.  In this edition I will keep my comments brief. I would like to do this more regularly and add more context and analysis. 

F-35

  • Australia drops out of F-35 program. Large-scale weapons system collaboration is hard! Link
  • A good roundup of lots of arms news.  News on Russian Sukhoi fighter jets, and the ongoing saga of the F-35 fighter. Link
  • F-35B not doing well in carrier testing and certification. Link

Mistrel

  • France returns Russia's money for the Mistrel.  This is a great example of the politicization of arms transfers. It's an interesting case of Russia importing (Russia is not a major arms importer) and being denied a weapon system that it really wanted. Link
  • France needs to sell the Mistrels it is not selling to Russia.  That will prove very difficult. Link

Russian Arms and Navy

  • Russia to develop a new "Doomsday" aircraft command center. Link
  •  Russian navy to begin building new destroyer - with capabilities that are very impressive and challenging to the US Naval superiority. Does this mean a comeback for the defense industry in Russia? Link
  • New Russian drone design. Link
  • Seven new and scary Russian weapons systems.  In this sense scary is for the West, or potential military rivals of the Russian state.  Hypersonic weapons are a new class of weapons that pose an interesting dilemma.  They are definitely weapons of the offensive, but are meant to overcome missile shield technology that rendered earlier nuclear offensive capabilities less secure. This is a demonstration of a technological arms race. Link
  • Morocco to buy Russian Amur class submarine.  Why? Link
  • New love for an old Bear. The TU-95 and nuclear bomber advantages. Link
  • Refurbished Russian submarine with all kinds of capabilities baffles US experts. "The Russians were always more innovative at this than we were."  What also struck me about this sub is its length.  It is half the length of a US aircraft carrier.  The Russians don't mess around when it comes to submarines. Link
  • Russian air to air missiles R-73 are flying off the shelves of the arms bazaars. Link
  • Story about Russia's new Armata tank. Link
  • Interesting video of forum on Russian naval power in the 21st century. Link
  • Russia selling powerful anti-aircraft missile system to Iran.  Link

India

  • Predictions of US-Russian arms competition in India.  This is an interesting field of inquiry.  India just became part of the Shanghai Cooperation Organization (SCO), but is also a democratic state, unlike most other members of the organization.  India has traditionally been one of Russia's biggest customers, and I have dealt with the issue of Russian-Indian arms purchases in other posts (LinkLinkLink). Will closer security cooperation cement the relationship that has been built between the two countries? Link
  • India is going to be buying a lot of arms in the near to medium future. 4.7 Billion dollars is a good start. Link

US Navy and Military

  • US begins work on second "Gerald R. Ford" Class of Aircraft Carrier to be named after JFK. Link
  • An interesting piece on the size of the US navy.  Arguments on one side are qualitative (our fewer ships can do more than many more ships were able to do earlier.)  Arguments on the other are quantitative.  Fetishizing numbers is not good policy.  However, arguing in terms of threats faced and the ability of the naval force, as presently constituted, to respond to those threats is good policy. Questioning the definitions of threats is the next step in such an analysis.  Policy in the absence of strategy is rudderless. Link
  • Russian jammers supposedly render aircraft carriers useless.  Whither the advantage of carrier groups? Link
  • The US is not selling, but is deploying F-22s to Europe to ease the minds of allies.  Increased Russian air activity within the context of the Crimean and Ukrainian conflict is increasing tensions in the region. Link 
  • Strong market for used US M113 Armored Personnel Carriers and its variants.  I spent a lot of time in one of these in Baghdad 2003. Link I spent more time in the Bradley, though.
  • I don't understand why the US Air Force hates the A-10 so much.  I think the Army would be happy to have these aircraft. Link

China

  • China is holding a large military parade next week and is having trouble attracting western leaders: Link  and another Link
Communist China generally shies away from the vast annual demonstrations of military might that were a hallmark of the Soviet Union, normally holding such events once a decade to mark the foundation of the People's Republic. 
It has struggled to attract world-wide interest for the parade as world leaders are wary of the tone of the event, and the risk of lending it legitimacy. 
Beijing is becoming increasingly assertive in the region and regularly accuses Tokyo of failing to show sufficient contrition for Japan's 20th-century invasion of China.

Other Miscellaneous Arms Links 

  • Analysis of Central Asian Military capabilities.  This should be of interest to my students. Link
  • Sweden and Brazil sign a deal for Gripen fighters. The deal includes financial terms, as well as details about the licensing and production of half of the fighters in Brazil.  The jet was also modified to fit Brazil's needs.  Link
  • French Deliver Rafale fighters to Egypt.  Link
  • This link maybe the most interesting.  It details the problem with Pilatus aircraft that was sold to Chad by Switzerland. The aircraft is not mean to be armed or used offensively, but apparently it has been.  This has led the Swiss to pull back on other potential exports. It is interesting to see a principled stance on arms transfers. Economic theories of arms transfers would predict that Switzerland is under too much financial pressure to export in order to support its domestic manufacturing for a product that has a limited domestic market. Interesting counterexample/mini case study to think about in terms of policy-making and the complexity of arms sales as a topic. Link

Tuesday, May 28, 2013

State Guarantees in the Defense Sector

From RIA Novosti.

Here is the latest news from Russia on domestic (government) support for the defense industry.  From PM Medvedev:

The provision of state guarantees is the first this year, Medvedev said, and stressed the beneficial effects it would have on the economy as a whole. 
“Everything invested in the defense industry has an influence on industry. Actually, the defense sector helps boost adjacent industries,” he said. 
State guarantees allow defense enterprises to obtain loans at a time when they face a shortage of working capital and have no other sources of financing, Medvedev said. 
Over a half of the state loan guarantees for defense producers this year will go to shipbuilders and developers of intercontinental ballistic missiles, according to the government resolution.
 In general there have always been arguments about beneficial spillovers from government spending on defense into the civilian economy.  This issue seems to be more important for the Russian economy. I often go back to the work of Gaddy and Ickes[1] that illustrates the distortions of Soviet Economy.

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[1] Gaddy, Clifford G., and Barry W. Ickes. 2002. Russia’s Virtual Economy. Washington  D.C.: Brookings Institution Press.