Russia-Egypt arms deal worth $2 billion

Egypt may purchase $2 billion in weapons from Russia—a deal which could be underwritten by Saudi Arabia.  Cairo has its eyes set in particular on a batch of MiG-29 interceptor jets.

What are the motives of the players?

The Egyptian military gains a new source of arms and aid after losing some U.S. support in the wake of Muhammad Morsi’s fall from power.

Russia gains financially through the sale and politically by further reestablishing its influence in the Middle East.

Saudi Arabia gets another way of expressing its dissatisfaction with U.S. policy on Syria and Iran.

From the business pages of United Press International:

Egypt said to edge closer to Russian arms package

Nov. 26, 2013

CAIRO, Nov. 26 (UPI) — Speculation persists regarding an emerging Egyptian-Russian military accord that may include the sale by Moscow of a package of weapons systems worth at least $2 billion.

It would likely hinge on Saudi Arabia, a supporter of Egypt’s military-backed regime, underwriting a deal that would be a major boost for Russian efforts to regain influence in a changing Middle East as U.S. power in the region is eroding.

The Saudis, the United Arab Emirates and its partners in the Gulf Cooperation Council have pledged $12 billion to Cairo and have delivered about $7 billion.

There are reports Riyadh has agreed to pay for the Russian arms. But the switch from U.S. weapons — supplied to Egypt since 1979 — back to Russia, the primary supplier to throughout the 1970s will entail a significant expenditure that could signal a possible shift in Arab military procurement policies…

What matters to the Middle East

The U.S. State Department released a report in January on world military expenditures and arms transfers.  They present data up to 2005.

Military spending as a percentage of GDP is often dismissed by anti-American “peace” institutes who claim to be more concerned with total military spending.

But anybody who has ever put together a budget knows that you’re dealing with a finite amount of money to allocate across a variety of competing areas.  How much of a nation’s wealth are you willing to take and devote toward military spending?  Two percent?  Five percent?  Ten percent?  Your answer says something about your overall priorities, which is why the GDP measure is valid and important.

The U.S. is known for high military spending, but what is less widely known is the extent to which Islamic countries are willing to take the wealth of their people to commit it towards armies and weapons.  They use their military power to threaten the existence of Israel, which is forced to spend its resources on defenses in response.  The result?  On a GDP basis, the Middle East spends a larger portion of its wealth on the military than any other region on earth.

GDP-share equivalent of military expenditure by region, 1995 and 2005

As the report notes, “The share of the [Middle East] region’s summed GDPs to which its military spending was equivalent appears to have fallen from about 6.4% to about 4.5%, but remained the higher than that of any other region.”

UAE spends more on military than U.S. does

While still fighting a war in Afghanistan and concluding a war in Iraq, the United States allocates less money as a percent of its gross domestic product toward military spending (4.7 percent) than do the United Arab Emirates (5.6 percent) according to World Development Indicators 2011, a World Bank publication.  The figures show that the UAE also commits a greater percentage of its labor workforce to their armed forces (1.8 percent) than does the U.S. (1 percent):

Source for data: World Development Indicators 2011

See similar findings from earlier Money Jihad coverage on Lebanon, Oman, Yemen, Jordan, and Saudi Arabia.

An end to Lebanese cheese

Due to Hezbollah’s role in Lebanon’s new government, Congressman Howard Berman (D-Calif.) is calling for an end to U.S. military aid to Lebanon.  Since the population and economy of Lebanon are intertwined with Hezbollah, it’s hard to disagree with Rep. Berman’s idea.  Rep. Ileana Ros-Lehtinen (R-Fla.) has voiced similar concerns.  Of course Lebanon’s growing debt will make that a bitter pill for them to swallow, but as we have pointed out, their total military spending already exceeds that of the U.S. as a percentage of GDP.

Read all about the proposed suspension of military aid to Lebanon at Israel Matzav.

Lebanese spendin’ cheese

It’s been a while since we spotlighted the military spending of Islamic nations.  Here’s a chart showing how Lebanon exceeds the “militarist” United States in military spending:

U.S. trails Lebanon in military spending

The chart was generated by Google using World Bank data.  The usual disclaimer applies—I’m not equating military spending with Islamic jihad.  Still, it’s remarkable how nations with majority of believers in the “Religion of Peace” tend to spend so much money on weapons and armies.

Oman—oh my!

It’s time again for another post comparing U.S. military spending to that of an Islamic country.  Google has a nifty tool (which it didn’t seem to have a month ago when we looked at Yemen) that allows users to generate graphs of military spending as a portion of GDP for whichever countries one selects.  Google uses World Bank data.

Today, we look at Oman, which outstrips even Saudi Arabia as a bigtime military spender:

That’s a whopping 11.3 percent of Oman’s GDP toward their military in 2006.  As always, I must repeat that I’m not equating military spending to terrorist financing…

Even when broke, thugs buy weapons

One would be tempted to believe that during a global economic recession and an Iranian budget catastrophe, that the Islamic Republic would cut back on lavish spending to develop a nuclear program.  That’s possible, but isn’t borne out by the recent history of the neighborhood.

Andrew and Patrick Cockburn’s Out of the Ashes, a political overview of Saddam Hussein’s regime in Iraq during the 1980s and 90s, helps illustrate the point.  Even when Saddam’s regime had no money, it forked over heaps of cash—with no questions asked—to Saddam’s nuclear scientists:

No one knows precisely how many billions of dollars where lavished on the Iraqi bomb project.  Even during the darkest years of the Iran-Iraq war, work proceeded at full speed.  The scale of the project, the creation of a network of foreign contractors, and the success with which the program was kept out of the international public eye were a monument not only to the talents of Jafr [an Iraqi nuclear scientist] and the overall director of the scheme from 1987, Saddam’s cousin and son-in-law Hussein Kamel, but also to the insouciance of the Western powers.  It was not as if the veil of secrecy surrounding the project was complete.  Even when a close U.S. ally, Saudi Arabia, agreed to help finance the Iraqi bomb program on the promise of repayment in nuclear devices, Washington took no action.  (p. 89)

The parallel today is that Iran is also disregarding its economic woes in order to support expensive weapons programs and foreign intrigue.  Nobody really knows how much money Iran is spending to arm itself, eventually to nuke Israel or threaten the West.  The Cockburns’ book is dated but its lessons are fresh.

Read my full review of Out of the Ashes on Amazon here.

A Veterans Day Message

Today the U.S. celebrates Veterans Day, and the Allies celebrate Armistice Day commemorating the end of World War I.  But the holiday is not just about offering well-deserved praise & parades to veterans.  The United States actually puts its money where its mouth is, with a 2010 budget of $112.8 billion in veterans benefits and services.

Meanwhile, in the Middle East, old veterans and war widows in countries like Egypt and Turkey are given meager pensions to make ends meet.  Those countries seem more interested in current military spending.  And, in the case of Iran or Syria, they’re more concerned with pensions for families of suicide bombers than for veterans of their own conventional wars… 

U.S. nosed out by Yemen on military spending

In 2006, the Republic of Yemen had a gross domestic product of $19 billion and a military budget of $1.1 billion*—5.8 percent of GDP.

Despite America’s 5,000 nuclear warheads,^† 1½ million active service members,^‡ 300 major military bases,^§ and two significant wars in Iraq and Afghanistan, Yemen STILL has aⁱslightly bigger defense budget than the United States**^– as a percentage of GDP.

Immoderate military spending by the Hashemite Kingdom

The adjective used most often to describe Jordan is “moderate.”  How does moderate Jordan’s military spending stack up against our own?

Even with two wars, Saudis outspend U.S. on military

Today’s post is not about terrorist financing, but it is about military spending by the country at the heart of Islam compared to military spending in the heart of the West.

You’ve heard it before from the media and think tanks like the Stockholm International Peace Research Institute:  the United States spends more money on the military than any other country on the planet.  But what about military spending as a percentage of gross domestic product (GDP)?  It’s time for a fact check. 

In 2008, the U.S. had a gross domestic product of $14.3 trillion and military spending of $709 billion; Saudi Arabia had a GPD of $310 billion and military spending to the tune of $25 billion.  I’ll save you the step of doing the math:

  

Also note that Saudi Arabia has compulsory military service (a draft) while the U.S. does not.  Tell me now—who has the more militaristic society?