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Western arms makers eye lucrative Mideast market

Arms exporters unfazed by recession: SIPRI
Rio De Janeiro (UPI) Feb 21, 2011 - Global arms exporters increased their trade despite the economic downturn leading to huge spending cuts in both developed and developing countries, latest data from the Stockholm International Peace Research Institute showed. Of particular relevance to Latin America were continued arms buying by Venezuela, in recession for the third year running, and a vigorously regenerated defense manufacturing and marketing program initiated by Brazil. Although Brazil recently has announced cutbacks in the quantities of defense procurements it will go for in 2011-12 its arms buying bill still runs into billions of dollars.

More billions have gone into reviving an arms industry that went into decline as military dictatorship gave way to democratic revival in the 1980s. Brazil's defense output remains small when compared with leading producers cited by SIPRI as the world's Top 100 arms-producing companies. The SIPRI report presented an overall picture of consistently strong sales by the armaments industries as governments cut back heavily on development and social expenditure. Despite the continuing slowdown, the total arms sales of the leading 100 of the world's largest arms-producing companies increased by $14.8 billion from 2008 to $401 billion, an 8 percent increase, data showed.

The producers maintained an upward trend in their arms sales, an increase of a total of 59 percent in real terms since 2002, said the think tank. South American nations have been debating whether their arms buying has fueled an arms race in the region. Much of it is military refurbishment but there are many examples of purchases in response to regional tensions, as between Colombia and Venezuela. "U.S. government spending on military goods and services is a key factor in arms sales increases for U.S. arms-producing and military services companies and for Western European companies with a foothold in the US arms and military services market,' states SIPRI arms industry expert Susan Jackson.

Of the SIPRI top 100 arms-producing companies, 45 are based in the United States. The companies generated just under $247 billion in total arms sales, 61.5 percent of all sales by the top 100 companies. Sales by the 33 companies based in nine Western European countries -- Finland, France, Germany, Italy, Norway, Spain, Sweden, Switzerland and the United Kingdom -- generated $120 billion in arms sales, which 30 percent of all the sales by the 100 leading arms companies. Ten of the top 100 companies, based in Asia and the Middle East, generated $24 billion in combined arms sales. None of the top 100 companies are based in Latin America or Africa.
by Staff Writers
Abu Dhabi (AFP) Feb 22, 2011
Western arms makers, squeezed by budget cuts at home, jostled to ink deals at the biggest arms fair in the Middle East as crackdowns on anti-regime protestors claimed hundreds of lives in the region.

Shiny fighter jets and armoured vehicles were showcased at the Sunday opening of the 10th International Defence Exhibition and Conference in Abu Dhabi amid reports of a bloodbath in Libya, the latest country in the region gripped by a sweeping pro-democracy uprising and ensuing violence.

"The post-financial crisis reality is that today it is clearly the Middle East that is seeing the biggest growth," said Herve Guillou, president of Cassidian Systems, a subsidiary of European aviation defence group EADS.

Cassidian is in talks with a local company on computerising the defence systems of the United Arab Emirates army.

IDEX, which will run until Thursday, hosts more than 1,000 exhibitors with over 30 pavilions mostly belonging to the UAE, the United States, Britain, France and Germany. Nearly 50,000 visitors are expected from around the world.

A naval defence industries exhibition, Navdex, is also being organised for the first time this year.

The fair is taking place as the Arab world witnesses a wave of unprecedented revolts that have toppled veteran leaders in Tunisia and Egypt since the start of the year. Some governments have responded with violent repression.

In Libya, rights groups put the death toll at between 200 and 400 in the space of a few days. Yemen, Bahrain, Morocco and Algeria have also faced deadly unrest demanding an end to their decades-old regimes.

That has not stopped contractors from rushing to showcase their wares to Gulf states, whose defense expenditures are set to rise over fears of Iran increased spending power due to high oil prices.

The six Gulf Cooperation Council countries -- Saudi Arabia, Bahrain, UAE, Oman, Qatar, Kuwait -- along with Jordan are set to spend $68 billion (49.6 billion euros) on defence in 2011, according to research firm Frost & Sullivan. Their spending is expected to reach nearly $80 billion in 2015.

"Undeniably, in the Gulf there are very big budgets that we don't have in Europe," said Christian Mons, president of French Land Defence Manufacturers Association (GICAT).

The dynamic market is a godsend for Western contractors as defence budgets at home are being curbed, particularly in the United States and in Western Europe. But they are faced with increasing competition from emerging economies. The Chinese, Ukrainian and South African stalls at the event expanded the most this year.

Nevertheless, negotiations are also long and difficult in the region due to demanding clients.

France has been in talks with the UAE since 2008 of 60 Rafale fighter jets designed by Dassault Aviation, but Abu Dhabi is demanding a revamped version of the aircraft with a more powerful engine and an improved radar.

The topic of sharing the costs of touching up the jets is part of the negotiations.

"A negotiation always takes several years," said Eric Trappier, who oversees the international operations of Dassault Aviation.

The new question mark is what long-term effects will the recent waves of revolts have on Arab defence policies.

Some say that the level of expenditures on equipment, which are spread out over years, would not be affected. "I don't think there would be a significant impact on budget," said GICAT's Mons.

On the other hand, European companies that manufacture law enforcement arms often no longer have the permission of their governments to export to certain crisis zones material that could be used against citizens.

French group Lacroix, which produces tear-gas or stun grenades, said exports of the products to the Middle East have been blocked, its international operations director Jean-Marc Puech said.

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Global arms sales passed $400 billion in 2009: think tank
Stockholm (AFP) Feb 21, 2011
The world's 100 largest arms dealers, excluding Chinese vendors, sold weapons for $401 billion in 2009, with US vendors remaining in first place, according to a report published Monday. "Despite the continuing global economic recession in 2009, the total arms sales of ... 100 of the world's largest arms-producing companies increased by $14.8 billion from 2008," the Stockholm International Pe ... read more

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