Defense industry’s life preserver
The U.S. defense industry has reached out to developing nations’ to supplant domestic and European defense spending losses.
U.S. arms transfer agreements tripled in 2011 compared to 2010, rising from $21.4 billion to $66.3 billion, according to a Congressional Research Service report. Out of that total, $56.3 billion worth of arms transfer agreements were made to developing nations.
The U.S. isn’t alone. The amount of arms transfer agreements to developing nations globally rose from $32.7 billion in 2010 to $71.5 billion in 2011, according to the CRS report. Of course, the U.S. made up for a significant portion of that increase.
It’s clear when attending the major international defense shows like Eurosatory and Farnborough that the focus for defense companies is targeting the growth markets — namely Saudi Arabia, India, and the United Arab Emirates.
Saudi Arabia purchases have been especially kind to floating defense industries coming down off the U.S. defense spending spree of the past five years. A U.S. agreement to sell 84 new F-15SA fighter jets and upgrade another 70 of the Saudi’s F-15S fleet made up a chunk of the 2011 arms trade agreement increase. Along with associated weapons and long term logistics, the deal was worth $29 billion.
U.S. defense industry leaders have pleaded with the Pentagon to loosen restrictions on foreign military sales. This growth could be a sign the Pentagon is making progress.