Arms and weapons are a substantial element in the globe’s economy. This paper will trace a few effects of the ending of the Cold War between 1990-1993 on weapons sales. It will deal with a few major authors in the field, and seek to underscore certain trends in that distasteful part of global trade. Specifically, the creation of a near monopoly of arms trading in the United States, as well as the development of highly privatized arms services.
With the economic demise of the USSR in the early 1990s, the field of weapons trading was basically in the hands of the United States and powers in western Europe (Golde, 672). The ending of the Cold War, a major boon for arms suppliers, created, at least in the 1990s, smaller defense budgets and high tech competition among major arms producing states. In fact, between 1992 and 1998, the manpower of the world’s armies shrunk by nearly 6 million people (Singer, 193). As a result, tight corporate competition for suppling these armies developed.
Its immediate result in the United States was a substantial flurry of mergers and acquisitions in that industry, leading to the creation of a wealthy and powerful weapons oligopoly made up of Boeing, Raytheon, Northrop-Grumman and Lockheed-Martin (Golde, 677). At the same time, this series of mergers that created the Big Four was exacerbated by the unpleasant interference of the state in this industry. In fact, Golde (2004, 673) holds that the state’s interest in a solid, oligopolic arms base helped create the merger movement in the early 1990s.
However, it should be made clear that all literature in this field points out that since 1996, defense budgets are rising again, and the demand for arms, both small and large, has mushroomed since that time. Local disputes in every continent have provided more fodder for the American (and increasingly again, Russian) arms oligopoly. In fact, Kinella states (2002) that Russia’s re-emergence under Putin since 2000 has brought Russia’s share of global arms production and trade to nearly one quarter. By 2002, global arms production was about 85% of its peak year, 1987 (Golde, 676).
The former USSR has re-emerged in the market by supplying mostly older, yet cheaper, equipment which has been used in low budget regional and sectional wars in Africa. As Russia is back in the global, high technology arms market, they are releasing their stockpiled, older equipment at bargain rates, helping to re-establish Russia as an arms trading power (Golde, 677). As of 2002, the United States took the lions share of weapons trading at 40%, with the European Union states with 25%, and Russia outstripping the EU at 27% of global arms trading (Golde, 678). And just as the state in the United States greased the skids for corporate mergers in their sensitive field, so did the EU do the same for European arms manufacturers, creating an near monopoly of streamlined, state-influenced, high-technology arms suppliers to the world.
The most significant development in the post-Cold War arms trading world is the development of what Peter Singer calls “Privatized Military Firms” or PMFs (Singer, 186). To some extent these private firms are mercenaries, but they are far more than that. These firms are made up of former military personnel who rent out their services to countries and political groups in terms of military production, strategy and training. The Saudi Kingdom is almost completely dependent on American PMFs for their military organization, for example (Singer, 188). In some respects, these PMF’s are rendering state armies obsolete, as they are for-profit companies in competition with one another. They specialize in exporting the most sensitive and cutting edge military products for any one who can afford to pay (Singer, 189). This includes not only states, but also rebel groups and even drug gangs in Latin America.
J.W. Smith, a specialist in the PMF’s has condemned their existence in no uncertain terms, and his research has led him to make very specific condemnation of this post-Cold War phenomenon. To wit, he claims that arms manufactures create “war scares” to develop and, they bribe domestic and foreign officials, they create false reports of “coming wars” that exist solely to feather their nests, they manipulate media, they deliberately create international rivalries and wars for their own purposes, and they have created “trusts” that are powerful enough to avoid international scrutiny to any great scale (quoted in Shah, 2003).
Regardless, Singer does hold that the PMF is a new idea, is global in scope, and they are expert in finding loopholes in domestic and foreign laws to permit them to operate. Initially, the lowering of defense budgets between 1990 and 1995 provided the impetus for the creation (or recreation) of the PMF, they have created such a niche for themselves in worlds politics that they remain powerful, even when the more developed states re-vamped their defense budgets. In other words, the PMF has successfully competed with states on their own terms (Singer, 193-4)
Furthermore, the PMF has filled the vacuum in the third world in failing states. If a state cannot control its own territory, such as in the Ivory Coast or Sudan, the PMF’s have successfully been able to intervene, providing defense and weapons training and services to militias and governments who are strapped for resources. In addition, after the Cold War, where western leaders were hesitant to get involved in certain areas such as Rwanda, once the Cold War impetus was gone, the PMF also entered to fill this gap as well. No matter how one looks at it, the PMF’s are here to stay. They have provided a vital service cheaper than most governments, and guarantee that it is well trained, often western, ex-military personnel will train an army or militia cheaper than a state can.
It remains, however, that the world of the private, “black market” arms dealers is not going away. There is a move by some of these men, such as the recently arrested Viktor Boot, for get rich quick schemes that permit them to undersell many of the PMFs. In the case of Boot, he was successfully able to undersell the PMF’s in the last 15 years, both by using his former KGB contacts as well as his contact is global intelligence communities worldwide, including Israel’s. The British Guardian newspaper said this about his methods: He was not alone among former Red Army officers in trying to sell small arms to ex-Soviet clients and armed factions in Africa, Asia and Latin America. Bout just did it better. He acquired a small private air force of transport planes that allowed him to deliver quickly to far-flung clients without the need for middle-men, and he got hold of far more sophisticated arms, such as sniper rifles and sights, and guided missiles (Borger, 22 December 2008).
In other words, it was his business sense that put him over the top. He ran is arms dealing as a business, not as an ideological prop.
To conclude, the modern, post Cold War world of arms sales is typified by several things. First, the re-emergence of national defense industries after the early 1990s slump. This is fueled by failing states, local rivalries and the development of high-tech weaponry that would give one side in a war an advantage over another. Secondly, the rise of private firms supplying the weapons, training, diplomatic and logistic support formerly supplied by states in union with private domestic suppliers. Third, the rise of the individual, “gangster” trade such as Bout using former Russian contacts to make his business proper (at least until now).
As it stands, the phenomenon of the PMC’s is the single most significant element of the post Cold War weapons trading world. They are making high-tech war available to nearly all functioning militia groups and even more unsavory organizations. They have revolutionized war, training and logistics, and are at the service of anyone who can pay. The literature in this field is only just beginning.
But to make the above simpler, one need say that the end of the Cold War only provided a small slump to arms trade. Within a few years, it was back with a vengeance, supplying local wars on every continent. Local civil wars and drug gangs have filled the void where the Cold War rivalry lapsed. The arms industry, now streamlined and state protected, is able to compete with all comers. It has made itself adaptable to the new post-Cold War world.
- Golde, Saar. Security Needs, Arms Exports and the Structure of the Defense Industry: Determinng the Security Levels of Countries. The Journal of Conflict Resolution 48. (October 2004) 672-698
- Kinsella, David. Rivalry, Reaction and Weapons Proliferation: A Time Series Analysis of Global Arms Transfers. ISQ 46 (June 2002) 209-230
- Singer, PW. Corporate Warriors: The Rise of Privatized Military Industry and its Ramifications for International Security. International Security 26. (Winter 2001-2002) 186-220
- Shah, Anup. “Propaganda for Arms Sales.” Global Issues. June 21, 2003 (retrieved from http://www.globalissues.org/article/77/military-propaganda-for-arms-sales on December 24, 2008)
- Phythian, Mark. The Illicit Arms Trade: Cold War to Post-Cold War. Crime, Law and Social Change 33. (2000) 1-52.
- Borger, Julian. Viktor Bout: Secretive Merchant of Death. Guardian. December 22, 2008. (Retrieved from http://www.guardian.co.uk/world/2008/dec/22/viktor-bout-profile on December 24, 2008)