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US-Saudi Arms' Deal: Military Keynisianism, Externalized

By Dr. Peter Custers

27 September, 2010

The deal urgently needs to be put to public scrutiny, for it is highly consequential. According to reports published mid-September, - the US Congress is set to approve a new agreement for the sale of armament systems to oil giant Saudi Arabia. The deal ultimately will be worth a rosy 60 Billion US Dollars. Though delivery of the weapons will be stretched over a period of 10 years, the prospective deal has already been termed one of the biggest ever in history. Its principal component are 85 F-15 fighter planes, and the upgrading of 70 similar aircraft delivered to Saudi Arabia in the past. The F-15 is a relatively old model of military planes, but is known to be very effective as means of destruction in air combat. It is manufactured by Boeing Corporation, the Pentagon’s second largest supplier of armament systems, and one of the leading corporations in the globalized arms’ industry. Boeing’s managers and shareholders, along with those of United Technologies and other beneficiaries, will undoubtedly feel elated over the outcome of their lobbying efforts towards Congress. Yet how to assess the consequences of the deal for the Middle East, a region where many millions of human lives have been lost in wars fought during the last thirty years? How to scrutinize the arms’ deal on the basis of the experience with exports of Western armaments in the past?

First, it may be noted that Israel, the US’s principal ally in the Middle East, is not objecting, but instead has given its ‘green light’ to the US-Saudi deal. Apparently, a visit by Israeli Defense Minister Ehud Barak to Washington was needed to smoothen out tensions over the planned deal. But Israeli fears that it would be at cross-purpose with its own strategic interests have apparently been allayed. The explanation provided by analysts for this is the following. On the one hand, the F-15 fighter planes according to the UK Guardian will carry sensors with technology aimed at preventing that they be used against their Israeli equivalents. On the other hand, the sale of the F-15 will be paralleled by the sale of the US’s newest military aircraft, Martin Lockheed’s F-35, to Israel. This ensures that Israel will continue to enjoy air superiority over any potential rivals in the Middle East. The triangular diplomacy over the US-Saudi deal once again underlines the enormous influence which the Israeli lobby enjoys in Washington D.C.. And the outcome, i.e. enhanced sales of F-35s, is another boon to US arms’ manufactures, and to state economic policymakers. For the sales’ strategy surrounding this plane, better known as ‘Joint Strike Fighter’ (JSF), reveals - perhaps more than that of any other single US arms’ system - how the US government has been using its relations with the military sector towards stimulation of overall growth in the US economy.

Before elaborating on this last point, let’s note how the US-Saudi arms’ deal is part of a continuum, with policymaking initiated in Washington in the seventies of the previous century. In reaction to the 1973 oil crisis which was caused by the determination of Middle Eastern and other oil producers to raise the price of crude oil, US government officials devised a new trading mechanism. Rather than continuing to resist the oil producers’ pressure, the US government henceforth tried to take advantage of the fact that governmental incomes of Middle Eastern oil giants rose. It notably advised Saudi Arabia and Iran (!) to channel a major part of their additional financial resources towards purchases of Western armaments. This trading system is epitomized by the Al Yamamah deal, a barter agreement between Great Britain and Saudi Arabia, clinched in the 1980s. Under this deal, Great Britain supplied weaponry to Saudi Arabia, directly exchanging arms against crude oil. The present US-Saudi deal rivals the Al Yamamah precursor in size. And though there is no evidence that the deal is similarly being conceived as a barter agreement, - there is no doubt that the Saudi government will finance its future arms’ purchases with the income the state reaps from its vast, the world’s largest, oil wealth.

Yet the deal also forms a continuum with another policy formulated by the US in the past. This is the strategy set into motion by the Clinton administration in the late 1990s. At the time, the Pentagon developed new ideas to re-enable the US government to rely on military allocations as primary leverage to stimulate the US business cycle. Fearing that primary dependence on the US army´s expenditures towards achieving overall economic growth might (once again) result in a recession, the Clinton government decided on a new variant of, what in theoretical terms, is designated as military Keynesianism (1). Instead of trying to achieve the aim of macro-economic growth through expansion of the military budget alone, - the US government would henceforth try to achieve the same aim via additional reliance on the exportation of weaponry, foremost exports of the above mentioned JSF. In the first round, from the late nineties through the first decade of the new millennium, the US government targeted the sale of JSFs and other US weaponry to European governments, and, secondarily, the rising powers in Asia, i.e. China and India. Yet it now appears that things have come full circle, and that arms’ exports to the Middle East are expected to provide an extra stimulus to the US economy. Highly significant from this perspective, is the parallel between the US-Saudi deal, and the sales of US weaponry to the 6 hundred thousand strong Iraqi army. For according to recent news, - Iraq just like Saudi Arabia and Israel, has agreed to buy a large number of fighter planes along with other weaponry from the US, totaling 16 Billion Dollars.

The question is: how are these various parallel sales going to contribute to ’stability’ in the Middle East? US State Department officials profess that stability is the central aim of the US-Saudi deal. From a social perspective, the multi-billion dollar arms’ purchases can easily be calculated to be a gigantic loss, - a loss for the people living in Middle Eastern states pressurized to buy the foreign weaponry. With regard to maintaining regional ‘stability’, there is not just reason for scepticism. History tells us there is reason for alarm. Surely, it would be wrong to argue that the three consecutive Gulf wars the Middle East has witnessed since the 1980s were the outcome exclusively of massive armament exports to the region. The US’s desire to control oil resources, too, was a key determinant, as US government statements confirm. However, there is no doubt that armament exports have been a one of the leading factors fuelling the murderous wars. The second Gulf war of 1991, ostensibly aimed at liberating Kuwait, according to world press reports was used to demonstrate effectiveness for the Patriot missiles and other US weaponry. The US, in firing Patriots, sought to entice Middle Eastern states into buying these from the US. The first Gulf war, i.e. the prolonged trench warfare between Iran and Iraq fought in the eighties, was fuelled via Western arms’ sales to both warring parties. Would Middle Eastern observers be wrong in suspecting that, given its utter dependence on domestic plus ‘externalized’ military keynesianism, - the US has an intrinsic interest in continued instability? If not in the outbreak of another war in their region, this time round between Saudi Arabia and Iran?

Special to Prothom Alo and The Daily Star, Bangladesh

Dr. Peter Custers
Leiden, the Netherlands, September 22, 2010

(1) For a more elaborate discussion on this topic, see Peter Custers, ‘Military Keynesianism Today: An Innovative Discourse’ (Race & Class, London, United Kingdom, Volume 51, April-June, 2010, p.79).