By Jaya Ramachandran
STOCKHOLM (IDN) - Germany is among the world’s largest arms exporters, though estimates of the magnitude of the country’s arms sales and of its ranking among arms traders differ. According to the Stockholm International Peace Research Institute (SIPRI), Germany was the ﬁfth largest exporter of major conventional weapons in 2011 behind the USA, Russia, France and China.
The U.S. Congressional Research Service (CRS) on the other hand ranks the country as the sixth largest arms exporter. The CRS estimates the ﬁnancial value of German arms deliveries in 2011 at $1.6 billion (in 2011 U.S. dollars), or approximately 4 per cent of global arms exports. This ranked Germany behind the USA, Russia, the UK, France and Italy.
The CRS annual report Conventional Arms Transfers to Developing Nations 2004-2011 aims to assist the U.S. Congress "in its oversight role of assessing how the current nature of the international weapons trade might affect U.S. national interests". The report provides the estimated ﬁnancial value of arms export agreements and deliveries from the largest arms exporters to all regions of the world in constant and current U.S. dollars for the previous eight calendar years.
The CRS report covers transfers to governments of "all categories of weapons and ammunition, military spare parts, military construction, military assistance and training programs, and all associated services". This deﬁnition is much broader than SIPRI’s, according to the organisation's latest fact sheet titled Measuring international arms transfers.
For data on U.S. arms export agreements and deliveries, the CRS report relies on information on government-to-government Foreign Military Sales (FMS). On the sources of data for non-U.S. countries, the CRS simply states that "Statistics for foreign countries are based upon estimated selling prices", although it is believed that the CRS draws on classiﬁed U.S. Government sources.
The SIPRI fact sheet authors Paul Holtom, Mark Bromley and Verena Simmel are of the view that CRS ﬁgures for non-U.S. arms exporters are often lower than official government ﬁnancial values for export licences granted and arms exports.
SIPRI has identiﬁed 34 states that have provided official data on the ﬁnancial value of their "arms exports", "licences for arms exports" or "arms export agreements" to the public for at least 6 years in the period 2001–2010 and for which the average of the reported values exceeds $10 million. This official data can be provided either in a national report on arms exports, another type of government report, a press release or via an attributed or unattributed quote in a media report.
The SIPRI researchers say that public announcements on the ﬁnancial value of states’ arms exports cannot be easily compared due to differences in the deﬁnitions of "arms" used and the fact that many states provide information only on the ﬁnancial value of either proposed arms exports or completed deliveries. Information on the value of proposed arms exports and completed deliveries of arms refer to different activities, and so should not be directly compared, they add.
States use different methods for collecting and reporting information on the ﬁnancial value of proposed arms exports or completed deliveries. Data on proposed arms exports can be based on the value of either arms export agreements concluded or export licences issued, which represent two different data sets. Data on deliveries of arms can be based on data provided by the national customs authorities or company reporting on export licences used, which again represent two different data sets.
CRS data not sufficiently detailed
The CRS estimated the ﬁnancial value of German arms deliveries in 2011 to be $1.6 billion (in 2011 U.S. dollars), or approximately 4 per cent of global arms exports. This ranked Germany as the sixth largest exporter of major conventional weapons in 2011, behind the USA, Russia, the UK, France and Italy.
The SPRI fact sheet authors note that the CRS data is not sufficiently detailed to gain an understanding of which deliveries account for the stated value of German arms exports. The CRS report includes tables detailing the numbers of weapon systems delivered, but these are aggregated over 3-year periods and by weapon category and region, rather than weapon description and destination. Further, there is no separate entry for German exports.
According to the CRS, the ﬁnancial value of German arms transfer agreements concluded in 2011 totalled $100 million (in current U.S. dollars), or 0.1 per cent of the global total value of arms transfer agreements, ranking Germany as the 7th largest supplier listed by CRS.
There is insufﬁcient open source information in the SIPRI Arms Transfers Database on the ﬁnancial value of arms transfer agreements concluded by Germany in 2011 to corroborate this ﬁgure. However, comparisons between CRS data on arms transfer agreements and publicly reported information on the value of signed arms export contracts in previous years indicates a tendency for CRS to underestimate the ﬁnancial value of arms transfer agreements for states other than the USA.
For example, the 2007 CRS report stated that the ﬁnancial value of Germany’s arms export agreements with developing countries in 2006 was $1.9 billion, based on an agreement with Brazil for licensed production of a Type ILK214 submarine and the upgrading of existing Type 209 submarines, and from an Israeli order for two Type 800 Dolphin class submarines.
However, according to available open sources, the Brazil deal was worth approximately $1.6 billion and the Israel deal was worth $1 billion. This gives a combined value of at least $2.6 billion – $700 million more than the CRS estimate – without taking into account other agreements concluded by Germany in 2006.
German national report
The German Government has published a national report on military equipment exports (Rüstungsexportbericht) every year since 1999. The report provides information on (a) the ﬁnancial value of export licences granted and completed deliveries of "war weapons" (Kriegswaffen); and (b) the ﬁnancial value of export licences granted for military equipment as deﬁned in the German national control list (i.e. which includes both war weapons and other military equipment that requires an export licence).
Thus, German official data on the ﬁnancial value of arms export deliveries does not include the value of the many items on the German national control list that are not categorised as war weapons.
The reported ﬁnancial value of German deliveries of war weapons in 2011 was €1.3 billion ($1.65 billion), compared to €2.1 billion ($2.8 billion) in 2010. SIPRI argues: Several major suppliers have not yet provided the ﬁnancial value of their arms deliveries in 2011, and so a comparison of the German Government’s official ﬁnancial value with its peers cannot be made for 2011. In 2010, in terms of the ﬁnancial value of deliveries of military equipment, Germany ranked as the fourth largest arms exporter behind the USA, Russia and France.
However, in this case the German data is based solely on reporting on war weapons, which is a narrower range of items than those covered by the U.S., Russian and French data. In addition, such major exporters as China, Israel and the United Kingdom do not provide information on the ﬁnancial value of their arms deliveries.
Precisely, against this backdrop, SIPRI goes beyond the financial value and estimates the volume of German arms exports in 2011 at 1.2 billion TIV (trend-indicator value), or 4 per cent of global arms exports, down from 2.5 billion TIV in 2010 (10 per cent of the world total). TIV is a unique pricing system the SIPRI has developed to measure the volume of deliveries of major conventional weapons and components.
The major recipients of German arms exports in 2011 were Brunei Darussalam (accounting for 16 per cent of exports), USA (11 per cent), Singapore (7 per cent), Spain (7 per cent) and Taiwan (6 per cent).
Tanks and armoured vehicles represented 26 per cent of the volume of German major conventional weapons exports in 2011, with ships accounting for 22 per cent, engines 20 per cent, and missiles 15 per cent.
The TIV of an item being delivered is intended to reﬂect its military capability rather than its ﬁnancial value. This common unit can be used to measure trends in the ﬂow of arms between particular countries and regions over time – in effect, a military capability price index.
Therefore, SIPRI says, it is important to ensure that the pricing system remains consistent across both the weapon systems covered and over time, and that any changes introduced are backdated.
Weapons that have previously been used by another armed force (i.e. surplus weapons) are given a value equal to 40 per cent of that of a new weapon. Used weapons that have been signiﬁcantly refurbished or modiﬁed by the supplier before delivery are given a value of 66 per cent of the value when new.
The overall volume of arms exports from a particular state in any given year is then calculated by adding together the TIVs for the weapons and components delivered. Since year-on-year deliveries can ﬂuctuate, SIPRI uses 5-year moving averages to provide a more stable measure for trends in international arms transfers.
The SIPRI TIV neither reﬂects the actual price paid for weapons nor represents current dollar values for arms transfers. The TIV is therefore not comparable directly with gross national product (GNP), gross domestic product (GDP), military expenditure, sales values or the ﬁnancial value of arms export licences. [IDN-InDepthNews – December 10, 2012]
Image: Leopard 2A5 of the German Army | Credit: Wikimedia Commons