The Stockholm International Peace Research Institute (SIPRI) stated in its annual report that the global arms race had accelerated, most dramatically in South America and South-east Asia, despite the economic meltdown. The Swedish institute, which conducts independent research on arms trade and its implications, said global defence transfers in the last five years had risen by 22 percent, with Asia and Oceania the biggest recipients with 41 percent of the total.

According to the head of the report, Paul Holtom, resource-rich countries were setting the trend by using their earnings to build out their combat aircraft fleets, and neighbouring rivals had reacted to these acquisitions with orders of their own. Furthermore, he questioned the rationale of these countries’ defence procurement policy in the allocation of resources in regions with high levels of poverty.

The study pointed out that it was able to witness a significant demand for combat aircrafts, and warned that deliveries of combat aircraft could fuel an arms race in the Middle East, north Africa, South America and south Asia. It said combat aircrafts accounted for 39 percent of major US weapons sales over the past five years, and about 40 percent of Russian arms exports.

Without any surprise, the US continued to top the chart with 30 percent of the total arms exports, followed by Russia at 23 percent, Germany (11%), and France (8%). It should be recalled that the study period was inclusive of more than two years of global economic contraction. However, the report was not in a position to provide the cost of the arms trade as most governments no longer released the figures.

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It should be recalled the UK was the world’s largest defense exporter in 2007, accounting for a third of global defense exports. Britain was able to achieve the whopping figures of about $31bn worth of exports in 2007 particularly by the orders for Eurofighter Typhoon jets from Saudi Arabia. The jets are expected to be delivered to the Royal Saudi Air Force by this weekend.

DSO in its latest release said, as there was not any significant slide in defense demand as compared to previous years, the defense and security sectors are weathering the recession better than many other sectors. Nevertheless, Chris Baker, the DSO operations director acknowledged that 2009 wouldn’t be an easy year for the more resilient defense industry.

The DSO list show that the US retaining the highest rank followed by the UK and France in defense sales. However, according to another list issued by Stockholm International Peace Research Institute in April showed that while the US remained the world’s largest defense exporter, Russia, Germany and France came next in order followed by the UK at the fifth place.

The DSO authorities have admitted that their yardstick of assessment is based on deals signed in any one given year, while all other major players use actual deliveries to arrive at their figures. The DSO was formed last year after the Defence Export Sales Organisation was controversially moved by Prime Minister Gordon Brown from Ministry of Defence ownership to the Department for Business, Enterprise and Regulatory Reform.

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Lockheed, the Pentagon’s No. 1 supplier by sales, and Boeing, its next largest supplier, are bidding against Russian and European rivals for a potential $10.2bn deal to sell the Indian Air Force 126 new multi-purpose fighter aircrafts. The recent meeting headed by the Prime Minister of India, Manmohan Singh has already given the green signal to the contract. India is entering into such a deal with the US after a gap of 50 years and last time it was when they acquired American Fairchild C-119 aircrafts in the early 1950’s. The current deal will be with the life-time guarantee on maintenance support for the four-engine turboprop transport aircraft which will be used for special missions.

Lockheed Martin Corp will configure the aircraft with missile and radar warning system. The 30 meter long Hercules which is capable of carrying a load of 20 tonnes has an ability to take off and land in short, makeshift strips. It is equipped with better maneuverability aspects compared to the currently used 40 tonne capacity Soviet era 10 transport aircraft. The Indian side claimed that these planes would be utilized for humanitarian missions around the globe. This deal is close on heels with the recent contract of $1.5 billion with France’s Dassault to upgrade 51 Mirage-2000 fighter jets that the Indian Air Force acquired in 1985. Democratic India’s neutral stance in various international issues coupled with defense majors’ interest in doing business with countries of peaceful nature attracts defense manufacturers to exploit Indian defense market.

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