Sales Soar as States Seek Solidarity

Hugo Chavez and Vladamir Putin have entered into arms export deals and licensing arrangements worth an estimated USD 4.4 Billion as Venezuala pursues a sweeping reconstitution of her military forces.

Shifting Power Balance Increases Weapon System Exports

RosoboronexportIn response to a military agreement between the United States and Colombia providing for seven forward operating bases (FOB), Venezuela’s Hugo Chavez has entered into arrangements with Russia to acquire 100,000 Kalashnikov automatic rifles, and a licensing arrangement to start a production line to build more. US and Colombian officials must now contend with the possibility that some of these weapons will end up in the hands of the FARC guerillas. Chavez claims the basing of US forces in Colombia is intended to restrain the Bolivarian Revolution.

Over the last four years, Mr. Chavez has bought Russian weapons through the state export agency Rosoboronexport worth USD $4.4 Billion including twenty-four Sukhoi fighter aircraft, and last month announced a technological cooperation agreement on 28 July to acquire T-72M main battle tanks (MBT) and 2S25 self-propelled anti-tank guns. On his latest visit to Moscow, Chavez stated he would seek “battalions of tanks” and other weapons from Russia to support a sweeping military expansion program including the stand up of new forces such as “water guerilla warfare” flotillas and new militia units.

The Axis of Unity -  Venezuela's Hugo Chavez and Iran’s Mahmoud Ahmadinejad in Tehran. Mr. Chavez has also firmed up diplomatic relations with Iran’s Mahmoud Ahmadinejad with visits to Tehran and talks of nuclear cooperation between the states. Following declarations of support for Iran’s nuclear program, Venezuela joined with Cuba, Syria and Iran in a symbolic “Axis of Unity”.

Venezuela has also consummated acquisition programs to reconstitute its blue water and brown water maritime capabilities with the renowned ship builder Navantia. On 28 November, 2008, Venezuela and Spain signed the procurement contract for four BVL and four POVZEE vessels to be delivered between August 2009 and 2011. The Buque de Vigilancia Littoral (BVL) or Littoral Surveillance Vessel is a four ships class being built by Navantia at its San Fernando-Puerto Real shipyard for the Keel laying of the Venezuelan Offshore Patrol Vessel BVL Puesta QuillaNavy of Venezuela. The lead ship, named Guaicamacuto, was laid down on 16 October, 2008. The Guaicamacuto-class ships have been designed to conduct surveillance and protection missions in the littoral environment, sea lanes protection, disaster relief, marine environmental protection, personnel and equipment transportation, search and rescue, divers support, anti-smuggling, anti-surface warfare (ASuW) and electronic warfare (EW) missions. These ships go operational with small and medium-caliber guns and an aft flight deck for launch and recovery of a rotary-wing aircraft.

Three Percent of A Very Big Number

According to recent analysis performed by the Stockholm International Peace Research Institute, a significant shift of buyers and suppliers of major weapons systems is underway. “The five biggest suppliers of major weapons for the period 2004-2008 were the United States, Russia, Germany, France and the United Kingdom. The USA and Russia remained by far the largest exporters, accounting for 31 percent and 25 percent of all exports, respectively. The top five suppliers accounted for 78 percent of exports of major conventional weapons in the period 2004-2008, compared with 81 percent for the period 1999-2003.”

Vladamir PutinThese supplier shifts denote the increasing presence of exports from states intent on developing an indigenous weapons systems design and manufacturing capability for export. A notable example includes exports from Israel where 150 defense firms generate roughly USD $3.5 Billion in sales of mission critical kit such as unmanned air vehicles (UAV or pilotless aircraft) systems, communications satellites, high-performance defense electronics systems, radar warning systems, active countermeasure systems, comprehensive self-protection systems and upgrade programs for aircraft and armored vehicles. Both Government owned entities (such as Israel Aerospace Industries and the Rafael Arms Development Authority) as well as privately held companies (such as Elbit Systems and the Tadiran Group) are required to coordinate exports through SIBAT – the Foreign Defense Assistance and Defense Export Regulatory Organization – which is run by the Israel Ministry of Defense.

Other examples include Norway (Kongsberg Defense & Aerospace, exporter of the Penguin Anti Ship Missile), Italy (Finmeccanica, the major player in the sector and Fincantieri, the principal national shipyard), France (Thales Group – enjoying a solid track record with Naval Systems including Anti-Air Warfare, Surface Warfare and Underwater Warfare systems integration).

Despite the export exploits of the aforementioned, the bulk of deliveries by the “big five” continue to dominate the market. However it is the pronounced shift in the customer base that has industry and the financial markets taking notice.

US deliveries of major weapon systems to the Middle East now represent 37 percent (roughly one-third) of exports either through direct commercial sale or via. the Foreign Military Sales Process as administered by the Defense Security Cooperation Agency. High demand for precision guided munitions (PGM) resulted in deliveries of more than five thousand (5,000) air deployed laser and GPS guided kinetic The Royal Saudi Air Force has begun taking deliveries of her first tranche of Typhoon aircraft from BAE systems of the UK.effects weapons as well as 207 air superiority and strike aircraft. The United Arab Emirates (U.A.E.) has grown to become the region’s largest customer and the third largest weapons importer in the world. Major acquisitions by the U.A.E MoD include eighty (80) F16E combat aircraft (from USA), and fifty (50) Mirage 2000-9 combat aircraft (from France). In the face of growing Iranian ballistic missile capability and nuclear ambitions, the U.A.E. has also made enormous investments to establish a layered missile defense system through the purchase of Patriot Advanced Capability-3 (PAC-3) and Terminal High Altitude Area Defense (THADD) anti-ballistic missile (ABM) surface-to air mid-course and terminal segment defense systems (from USA).

In a related development, Saudi Arabia has begun taking deliveries of the 4.5th generation Eurofighter Typhoon fighter aircraft from a USD $8-12 Billion deal (a component of a larger USD $20 Billion deal) with UK defense contractor BAE Systems. The Royal Saudi Air Force (RSAF) will ultimately receive seventy-two (72) of the high performance multi-mission aircraft. Analyst consensus points to the Iran-fueled tension in the Middle East as the catalyst for setting off the Saudi defense buying binge, in spite of Iran’s increasingly antiquated Air Force equipped with a collection of older Dassault, Sukhoi, Grumman, McDonnell Douglas and indigenously designed and produced Saegh air vehicle fleet.

Belts Loosen in Pac-Asia Region

In part two of our series, we will explore how the economic resurgence of China and other Asian states along with the rogue actions of Pyongyang are fueling the appetite for defense exports in the region and it’s periphery.


Tashji is an accomplished defense and aerospace industry executive having served as the senior acquisition manager with the 350th and 551st Electronic Systems Wings – USAF Material Command acquisition program offices based at the Electronic Systems Center (ESC), Hanscom AFB, MA. His work involves foreign military sales programs for advanced sector operations center long range radars for the Multinational Security Transition Command Iraq and airborne radar, electronic warfare, GPS denial and battle space control systems developed for the international fleet of Boeing AWACS Advance Early Warning and Control System aircraft. Prior to serving with the ESC, Tashji was a Director with the Raytheon Company responsible for identifying, developing & marketing advanced solutions for DoD and international MoD customers worldwide.

His program work includes solutions to support the joint and coalition war fighter environment including NAVSEA surface combatants, Patriot PAC-3, THAAD, SL-AMRAAM, and other space, air, surface and sub-surface war fighter mission solutions. He managed the overall marketing strategy and efforts including market analysis, identification of business opportunities and risks, strategic alliances and partnering, systems engineering and customer requirements, business development programs and marketing, advertising and communications initiatives & plans.

He can be reached at 23 April Lane, Westford MA 01886, by phone at 978-392-9004, by email at sdtashji@comcast.net, or on the web at http://profitfromknowledge.spaces.live.com/


Technorati Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

This entry was posted in Defense Industry. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s