maandag 4 juni 2018

Dutch arms exports and SIPRI ranking

The Netherlands entered the top-10 of Global arms exporters in the latest annual report Trends in international arms transfers by the Stockholm International Peace Research Institute (SIPRI). The main message of that report, covering 2013-2017, is that global arms exports grew 10 per cent in comparison with 2008–2012. In the top 10 of largest arms exporters only two countries had a shrinking market share, the rest took a bigger slice of the larger cake (see table 1).

Table 1: The 10 largest exporters of major arms and their main clients, 2013–17
Note: Percentage of total is rounded to 1 decimal place (except for percentages over 10 which are rounded to whole numbers).

Exporter
Share of
arms exports (%)
Per cent change from 2008–12 to 2013–17
Main clients (share of exporter’s total exports, %),
2013–17
2013–17
2008–12
1st
2nd
3rd
1
United States
34
30
25
Saudi Arabia (18)
UAE (7.4)
Australia (6.7)
2
Russia
22
26
-7.1
India (35)
China (12)
Viet Nam (10)
3
France
6.7
5.8
27
Egypt (25)
China (8.6)
India (8.5)
4
Germany
5.8
7.4
-14
South Korea (14)
Greece (11)
Israel (8.7)
5
China
5.7
4.6
38
Pakistan (35)
Bangladesh (19)
Algeria (10)
6
U K
4.8
3.8
37
Saudi Arabia (49)
Oman (14)
Indonesia (9.9)
7
Spain
2.9
2.9
12
Australia (34)
Turkey (14)
Saudi Arabia (8.3)
8
Israel
2.9
2.1
55
India (49)
Azerbaijan (13)
Viet Nam (6.3)
9
Italy
2.5
2.4
13
UAE (12)
Turkey (10)
Algeria (9.9)
10
Netherlands
2.1
2.1
14
Jordan (15)
Indonesia (15)
USA (11)

A Dutch Parliamentary Commission asked the Minister of Foreign Trade and Development Aid, Sigrid Kaag, to send an explanation to the Parliament. On June 6 the report and the appreciation by the Minister will be discussed in Parliament. Minister Kaag praised the SIPRI report for its methodological consistency, making it a tool to map changes in the global volume of arms exports. But spins that the Netherlands is a much smaller exporter as is painted in the report, because of two arguments:

a) most Dutch surplus weapons sold fall under the eleven categories researched (see SIPRI sources and methods) and SIPRI gives them a 40% value of the original cost in its Trend Indicator Value (TIV). The Netherlands has, unlike other countries, a transparent policy on the sale of surplus arms and this combined leads to a high export value; and

b) because small arms and ammunition are not included, the substantial small arms and ammunition industries of other EU countries are not included in the ranking.

All together the methodology results in the description of the Netherlands as a relatively big arms exporter,” and, “the picture would be different when all exports of military material were included and when the value of export permission or actual exports were taken to measure the value,” the Minister concludes.

Surplus

The surplus argument is peculiar, because SIPRI reports also on the exports of surplus arms from other countries. Maybe their governments don't report as clearly as the Dutch government does, but surplus exports of major arms are – as industrial exports - in the Transfers of major weapons database for all countries based on a wide range of sources, not only on government reporting.

Small arms and ammo

Small arms do not make much difference in the reporting as their financial volume is limited. Germany for example provided licenses for small arms exports in 2006-2016 valued € 561 million. This is just over one percent of all German military exports accounting for € 55 billion. All EU members together issued export licenses for small arms valued € 3 billion in 2016 of which 80% (€ 2.4 billion) for export to the US. Compared to the total of € 190 billion military exports this is less than 2%. EU ammunition export permissions valued were € 8 billion in 2016. Thus including both ammo and small arms has some effect: Belgium and Austria would join the league of large arms exporters. So the minister has a point here.

Not mentioned however is that the Rotterdam harbor facilitates the shipping of large amounts of small arms and ammunition to destinations such as as the Philippines, South Africa. China exports ammunition through Rotterdam to Italy. The Netherlands is an international hub for arms exports (see: The Netherlands transit of small arms and ammunition 2013-2018) which is not counted by SIPRI but gives our country a big role in the international arms trade.

Ranking

Arms export is not a sports event where ranking makes sense, but a serious issue for peace, stability, human rights and development. When Sweden will start exporting its Gripen fighter jets to Brazil, it will directly surpass the Netherlands in the near future. Which shows the relative value of such a ranking order. Relevant is that over a quarter of global major arms sales come from European Union member states. Combined with North America, western countries are responsible for 60% of all international trade in major weapon systems.

Main clients and components

The main clients of Dutch arms exports buy in the categories surplus and naval.(see table 2).

Tabel 2: Dutch transfers of major weapons: deals with deliveries 2013-2017
recipient
No.
ordered
designation
Weapon
description
Year(s)
Weapon
of order
Year
delivery
Of
delivered
Comments
Indonesia
1
SIGMA-105
Frigate
2012
2017
1
$220 m deal (incl production of components and assembly in Indonesia); part of 'PKR' programme; SIGMA-10514 version; Indonesian designation Martadinata
1
SIGMA-105
Frigate
2013
2017
1
Incl production of components and assembly in Indonesia; part of 'PKR' programme; SIGMA-10514 version
3
Scout
Sea search radar
2013
2014
3
For 3 Brunei (Bung Tomo) frigates from UK
Jordan
52
AGM-65 Maverick
ASM
2013
2015
52
Second-hand
15
F-16C
FGA aircraft
-2013
2017
15
Second-hand; 'Peace Falcon-6' deal; F-16AM version (incl 2 F-16BM/F-16D)
15
Flycatcher
Fire control radar
2013
2014
15
Second-hand; part of EUR21m deal
60
Gepard
SPAAG
2013
2014-2016
60
Second-hand; part of EUR21 m deal
5
AIFV
IFV
2016
2016
5
Second-hand; aid
United States

15(33)
Stan Patrol-4708
Patrol craft
2009
2012-2017
25
For coast guard
Source: SIPRI Arms Transfers Database
( ) part of deal not yet delivered.
Information generated: 28 May 2018

Jordan is 1st mainly because of the sale of F-16 aircraft. Jordan is a country using its fighter aircraft in Syria and in the Saudi led coalition against Yemen. Dutch weapons count for 43% of Jordan's major arms imports in 2013-2017.

Indonesia is 2nd because of the sale of Damen warships, which will have a huge impact in this volatile region. (SIPRI does not include Thales command and control systems, a major part of Dutch arms exports.)

The US is 3rd also because of license build Damen Stan Patrol-4708 ships. The US is however far more important for the Netherlands as a receiver of components for missiles, helicopters and fighter aircraft (see table 3). Those components are not separately reported in international statistics, because they are assembled in bigger systems.

Front runner

The letter of Minister Kaag concludes with a paragraph on the excellent Dutch arms export policy. A judgment underlined by denials of export permissions and the Dutch restrictive policy based on the Common Position. It cannot be denied the Dutch government is doing well in many respects, but not in all. Downgrading its own role in the international arms export business is not helping this role as front runner in arms control.

Table 3: 10 largest Dutch arms export permission 2013-2017
9-12-2014
Parts of F-35 fighter aircraft
Italy; Turkey; US
700,000,000
18-7-2014
Frigates and parts
Indonesia
355,000,000
17-6-2013
Parts and accessories for frigates
Indonesia
345,000,000
27-10-2017
Parts for patrol vessels
US
329,931,421
22-7-2015
Parts of frigates
Indonesia
251,000,000
26-3-2014
Optical components and technical drafts
EU
216,550,000
27-12-2016
Parts of radar and C3 systems
Indonesia
196,425,000
20-2-2014
Mix of small and large caliber ammunition (for decommission)
Germany
168,831,250
27-10-2014
Patrol vessels
Trinidad & Tobago
140,391,927
24-2-2016
Parts for F-35 fighter aircraft
Japan
137,400,594




Written for Stop Wapenhandel