Asked by Myles Walton, an analyst from Germany’s Deutsche Bank if an Iran agreement could “impede what you see as progress in foreign military sales,” Marillyn Hewson, the chief executive of Lockheed Martin, responded volatility all around the region” should continue to bring in new business. According to Hewson, “A lot of volatility, a lot of instability, a lot of things that are happening” in both the Middle East and the Asia-Pacific region means both are “growth areas” for Lockheed Martin.
In other words, as long as the world stays at war or on the verge of it, Lockheed Martin’s profits won’t suffer -- and, of course, its products will help ensure that any such “volatility” will prove lethal indeed. The Deutsche Bank-Lockheed exchange “underscores a longstanding truism of the weapons trade: war — or the threat of war — is good for the arms business,” says William Hartung, director of the Arms & Security Project at the Center for International Policy. Hartung observed that Hewson appeared to regard the normalization of relations with Iran not as a positive development for the future, but as an impediment. “And Hewson’s response,” Hartung adds, “which in essence is ‘don’t worry, there’s plenty of instability to go around,’ shows the perverse incentive structure that is at the heart of the international arms market.”
Under Hewson, Lockheed has set a goal of getting at least 25% of its revenues from weapons exports, and Boeing has done that company one better. It’s seeking to make overseas arms sales 30% of its business. The Middle East is hardly the only growth area for that firm or others like it. The dispute between China and its neighbors over the control of the South China Sea (which is in many ways an incipient conflict over whether that country or the United States will control that part of the Pacific Ocean) has opened up new vistas when it comes to the sale of American warships and other military equipment to Washington’s East Asian allies. In the past two years alone, the U.S. has offered more than $15 billion worth of weaponry to allies in East Asia, with Taiwan, Japan, and South Korea accounting for the bulk of the sales. Growing fears of North Korea’s nuclear program have stoked a demand for U.S.-supplied missile defense systems. The South Koreans have, in fact, just agreed to deploy Lockheed Martin’s THAAD anti-missile system. The Obama administration’s decision to end the longstanding embargo on U.S. arms sales to Vietnam is likely to open yet another significant market for U.S. firms. The Obama administration has gone to great lengths to build a defense relationship with India, a development guaranteed to benefit U.S. arms exporters. Last year, Washington and New Delhi signed a 10-year defense agreement that included pledges of future joint work on aircraft engines and aircraft carrier designs. In these years, the U.S. has made significant inroads into the Indian arms market, which had traditionally been dominated by the Soviet Union and then Russia. Recent deals include a $5.8 billion sale of Boeing C-17 transport aircraft and a $1.4 billion agreement to provide support services related to a planned purchase of Apache attack helicopters.
The United Kingdom has been by far the biggest purchaser of U.S. weapons in Europe of late, with more than $6 billion in deals struck over the past two years alone -- more, that is, than the U.S. has sold to all other European countries combined. The British defense behemoth BAE is Lockheed Martin’s principal foreign partner on the F-35 combat aircraft, which at a projected cost of $1.4 trillion over its lifetime already qualifies as the most expensive weapons program in history. If Brexit-driven austerity were to lead to a delay in, or the cancellation of, the F-35 deal (or any other major weapons shipments), it would be a blow to American arms makers. But count on one thing: were there to be even a hint that this might happen to the F-35, lobbyists for BAE will mobilize to get the deal privileged status, whatever other budget cuts may be in the works.
Business prospects opportunities in Eastern and Central Europe are on the rise due to a new Cold. Between 2014 and 2015, according to the Stockholm International Peace Research Institute, military spending increased by 13% in the region in response to the Russian intervention in Ukraine. The rise in Poland’s outlays, at 22%, was particularly steep. Obama was recently in Poland demanding the EU / NATO spend at least 2% of their GDP ON WEAPONS! 5 UN Security Council permanent members US, UK, France, Russia, China. The 5 BIGGEST Weapons/Arms dealers... U.S., UK, France, Russia, China.
According to the latest figures available from the Congressional Research Service, the United States was credited with more than half the value of all global arms transfer agreements in 2014, the most recent year for which full statistics are available. At 14%, the world’s second-largest supplier, Russia, lagged far behind. The U.S. share has fluctuated between one-third and one-half of the global market for the past two decades, peaking at an almost monopolistic 70% of all weapons sold in 2011. Vice Admiral Joe Rixey, who heads the Pentagon’s arms sales agency, known as the Defense Security Cooperation Agency, estimates that arms deals facilitated by the Pentagon topped $46 billion in 2015, and are on track to hit $40 billion in 2016. The Defense Security Cooperation Agency is funded from a 3.5% surcharge on the deals it negotiates. This gives it all the more incentive to sell, sell, sell.
"War is a racket. It always has been." explained US Maj-General Smedley Butler, "It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives. A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small "inside" group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes."
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