It’s Not Diplomacy, It’s an Arms Fair
U.S. defense contractors are popping corks as Obama “reassures” his Middle East allies with billions of dollars of weapons.
The summit between President Barack Obama and representatives from the Persian Gulf countries that kicked off today at Camp David is meant to reassure Washington’s Arab allies. “Don’t worry about the nuclear deal with Iran,” Obama will say. “We’ve got your back.”
And what’s the best way to show your friends that you’ve got their back? Sell them billions of dollars worth of advanced weapons. In fact, it seems like arms sales are the Obama administration’s tool of choice these days for dealing with everything from counterterrorism to a lagging economy. And the consequences, unsurprisingly, are bloody.
In its first five years in office, the Obama administration entered into formal agreements to transfer over $64 billion in arms and defense services to Gulf Cooperation Council (GCC) member states, with about three-quarters of that total going to Saudi Arabia. And new offers worth nearly $15 billion have been made to Riyadh in 2014 and 2015. Items on offer to GCC states have included fighter aircraft, attack helicopters, radar planes, refueling aircraft, air-to-air missiles, armored vehicles, artillery, small arms and ammunition, cluster bombs, and missile defense systems.
Sales to GCC members have been the most important component of the record-level U.S. arms deals concluded during Obama’s term. The Obama figures for sales worldwide even edge out levels reached during the Nixon administration, when the end of the Vietnam War and the rising purchasing power of members of the OPEC oil cartel spurred the United States’ first major arms export boom.
The surge in arms sales under Obama is rooted in two factors, one political and one economic. The political aspect of the Obama approach mirrors the path pursued by President Richard Nixon in response to the unpopularity of the Vietnam War. In 1969, Nixon announced that henceforth the United States would supply generous quantities of military assistance to allied regimes, in an effort to “avoid another war like Vietnam anywhere in the world.” And in a 1967 article in Foreign Affairs, Nixon referenced the political roots of his emerging policy, noting that Vietnam had sown “bitter dissension” domestically, producing a “deep reluctance to become involved once again in a similar intervention on a similar basis.”
Substitute Obama for Nixon and Iraq for Vietnam, and you have a latter-day version of the Nixon Doctrine of arms sales promotion. Obama wants to be seen as a president who ended large-scale wars, not a president who started new ones. And, as he has made clear time and again, he is particularly reluctant to put large numbers of U.S. “boots on the ground,” as the Bush administration did in both Iraq and Afghanistan. Given these restrictions, the Obama administration has developed an approach to warfare designed to limit U.S. casualties. This has relied largely on drone strikes and the extensive use of Special Forces; but boosting arms sales advances is also a part of this hands-off approach, giving allies the equipment and training to fight terrorism on their own. (Let’s forget for the moment the fact that Obama’s approach may spawn more terrorists than it kills by generating anti-U.S. sentiment.)
But it might be the legacy of the 2008 economic crisis, as much as the 2003 Iraq disaster that drives this White House’s arms sales. The Obama administration clearly wants to create jobs in the defense industry and boost the bottom lines of major defense contractors. The Pentagon’s 2010 announcements of offers involving tens of billions of dollars’ worth of F-15 fighter planes, Apache attack helicopters, armored vehicles, and other equipment to Saudi Arabia listed the prime beneficiaries as Boeing, Lockheed Martin, Raytheon, General Electric, the Sikorsky Helicopter unit of United Technologies, and ITT Aerospace. But these are just the major contractors; thousands of subcontractors across the United States will get a piece of the action as well. For example, in announcing the deal for selling 84 Boeing F-15s to the Saudis, Assistant Secretary of State for Political-Military Affairs Andrew Shapiro proudly asserted that the deal would create 50,000 jobs in 44 states, most notably in St. Louis, the site of the main assembly plant for the plane.
Foreign sales are particularly critical for keeping alive weapons production lines that are about to be closed down as the Pentagon moves towards buying next-generation systems. Absent new domestic orders, Boeing’s F-18 production line will have to close in early 2017. But last week’s report that Kuwait intends to buy 40 F-18s for $3 billion holds out hope that the line will stay open for another year or more, during which time the company can seek more foreign sales to prolong the life of the program even further. Similarly, the General Dynamics M-1 tank, a program which the Army started winding down in 2012, has been surviving based on yearly add-ons to Pentagon budget requests spearheaded by the Ohio and Michigan delegations, whose states host the main production sites for the vehicles. These efforts have been supplemented by a deal to upgrade 84 M-1s for Saudi Arabia.
The Obama arms sales boom has bolstered the bottom lines of companies like Boeing, Lockheed Martin, and Raytheon. Each firm has been the lead contractor one or more mega-deals like the $29 billion offer of 84 Boeing F-15 fighter jets and related equipment to Saudi Arabia, a $6.5 billion sale of Lockheed Martin’s THAAD missile defense system to Qatar, and the proposed transfer of the Lockheed Martin/Raytheon produced Patriot Air and Missile Defense System to Saudi Arabia for $1.8 billion. The payoff won’t come all at once, but as these deals work their way through the pipeline, they will generate substantial profits for each of these firms for years to come.
As Pentagon procurement spending has dipped slightly due to the caps on the agency’s budget established in the Budget Control Act of 2011, arms industry executives are looking to promote overseas sales even more aggressively — and the Middle East market will be central to these efforts. Lockheed Martin has set a goal of increasing exports to 25 percent of total sales over the next few years. In a conference call with investors in late January, Lockheed Martin CEO Marillyn Hewson suggested that continued “volatility” in the Middle East and Asia make them “growth areas” for the firm. And a few years ago, Boeing launched an effort to get export sales in its defense division up to 25 to 30 percent, from just 7 percent in 2005. Dennis Muilenburg, a company vice president who formerly ran Boeing’s defense segment, has suggested that if the F-15 deal with Saudi Arabia stays on track, the company will be “well on our way” to its goal.
The Obama administration is clearly on board with the industry’s agenda. The lengths to which U.S. officials will go to help secure an arms sale for a U.S. company were revealed at a House Foreign Affairs Committee in April 2013. Asked whether the administration was doing enough to advocate for U.S. arms exports, Tom Kelly, principal deputy assistant secretary of the State Department’s bureau of political-military affairs, said that, “it is an issue that has the attention of every top-level official who’s working on foreign policy throughout the government, including the top officials at the State Department … in advocating on behalf of our companies and doing everything we can to make sure that these sales go through.” Just to make himself perfectly clear, Kelly went on to say that [arms sales promotion] “is something that we’re doing every day, basically [on] every continent in the world, and we take it very, very seriously and we’re constantly thinking of how we can do better.”
The Obama administration can definitely do better — but not by hawking top-of-the-line weaponry to Middle Eastern regimes. That approach has already proved disastrous.
In 2011, the U.S-backed security forces of Saudi Arabia and the United Arab Emirates intervened to help put down the pro-democracy movement in Bahrain. Last summer, the United Arab Emirates conducted bombing raids against Islamist forces in Libya, further inflaming the situation in that country. Most recently, Saudi Arabia, armed with U.S. planes and bombs, has launched a devastating assault on Yemen that has killed at least 700 civilians, displaced hundreds of thousands, and sparked a humanitarian emergency by blocking access to food and medicine.
One shudders trying to imagine what comes next after the president inks billions more dollars worth of arms sales at Camp David this week.
Photo by Kevin Dietsch – Pool/Getty Images