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Edited by Jonathan Crush, Bruce Frayne and Gareth Haysom

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Edited by Andrew T.H. Tan

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Paul J. Smith

U.S. arms exports are a key element of U.S. foreign policy. Such exports advance U.S. national interests in at least 3 major areas (1) the tendency of such exports to promote military interoperability and to improve defense capacity among allies; (2) the propensity for such exports to solidify political relationships with countries that advance U.S. geopolitical goals; and (3) the economic advantages that accrue from such exports, particularly as they facilitate maintenance of America's defense industrial base. Two major mechanisms for U.S. arms exports are Foreign Military Sales (FMS) and Direct Commercial Sales (DCS). In addition to exploring the U.S. legal regime associated with arms transfers, the chapter examines the issue in the context of specific countries or political entities, namely Saudi Arabia, India, Turkey, Afghanistan and Taiwan.

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Andrew T.H. Tan

Asia’s steady economic rise and the accompanying increase in military expenditure has led to the problem of the uncontrolled proliferation of conventional arms in the region. The key trends include: the acquisition of new capabilities where none had existed in the past; the acquisition of the latest and most sophisticated military technologies; the emphasis on naval power projection in the form of expanded maritime power; the renewed emphasis on airpower; and enhancements to land power. This increase in military power projection capabilities has accentuated security dilemmas, in turn increasing the potential for misperceptions, miscalculations and accidental war. This suggests the urgent need for arms control and other confidence-building measures in order to ameliorate the consequences of Asia’s relentless arms build-up.

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Ian Anthony

After a prolonged period of limited investment European states are launching programmes to modernize the air power that plays a pivotal role in modern conflict. These programmes will impact on the force structures and capabilities of European states for several decades to come. National procurement must fit with collective defence needs in a coherent manner, and deliver capabilities within a relatively short time frame. However, while choices are constrained by what is available and affordable today, the ways in which air power is delivered is changing. The level of investment needed to build the next generation of air power will promote joint projects implemented by increasingly integrated trans-national companies. However, European states need to continue thinking about how these new capabilities will be used in defence cooperation frameworks that still emphasize coordinating national armed forces. The computing power and digital communication systems on aircraft in future could process and fuse data such that tactical command and control, counter air and interdiction missions are planned as well as implemented more quickly at lower command levels. In future ‘optionally manned’ aircraft armed with precision-guided stand-off missiles could operate in tandem with unmanned air vehicles carrying a variety of payloads and a ‘swarm’ of relatively small and relatively cheap unmanned systems carrying kinetic and non-kinetic weapons along with a range of sensors and communication capabilities.

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Yves-Heng Lim

China’s military apparatus has undergone a radical transformation since the end of the Cold War. In three decades, the People’s Liberation Army has transformed into a major player in the East Asia and Asia Pacific region, second only to the United States. This transformation has been supported by a massive investment in the modernization of China’s armed forces that has allowed the PLA to achieve generational leaps in the platforms and weapons it deploys. This chapter examines the trajectory of China’s defence spending and the evolution of the PLA’s acquisition patterns in the last thirty years. It first clarifies the scope of Beijing’s investment in the Chinese military apparatus, in a context where the pervasive lack of transparency continues to generate major uncertainties. Focusing on sea, air and missile capabilities, the chapter then examines changes in the PLA’s patterns of acquisition, showing a decreasing reliance on foreign suppliers and a maturation of China’s domestic production.

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Jingdong Yuan

For over six and half decades, China has built a defence industrial complex that is comprehensive in its ability to manufacture and provide a broad range of conventional and nuclear weapons systems to its military. The past two decades have witnessed major reforms being conceived and implemented to enable it to overcome some of the bottlenecks and deficiencies, and make advances in a number of sectors such as shipbuilding, missiles and space, and to some extent, military aviation. This chapter reviews and analyzes China’s defence industrial base from its beginning in the mid-1950s to the present. Specifically, it evaluates its major achievements and challenges since the 1990s and assesses its future trajectory and prospects. It argues that China’s defence industry is among the world’s top-tier cohort in terms of sales and revenues but still lags significant behind its counterparts in terms of innovation, management, productivity, and the ability to produce the most sophisticated weapons systems.

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Owen Greene

Although many conventional arms control agreements only have limited and indirect significance for the arms trade, an important feature of developments since the 1990s have been substantial strengthening of international commitments and programmes on arms transfer controls. Recently, underlying geo-strategic shifts plus tensions with Russia have created a sense of crisis in some aspects of conventional arms control. However, there are good grounds for expecting that the present set of international agreements relevant to the arms trade retain sufficient international support to continue to be significant, even if the prospects for negotiating further agreements are not good for the foreseeable future. The combined effects of this set of global conventional arms agreements have been significant in terms of developing norms, capacities and co-operation mechanisms to enable improved national controls on arms transfers and to facilitate confidence building and transparency measures. There is substantial evidence that many countries now conduct more systematic risk assessments before authorising transfer licences, and that denials of licences for problematic transfers to fragile, authoritarian, or conflict affected areas became more common during the two decades since the early 1990s, though in recent years these trends may have stalled. This does not imply that there has been an overall increase in restraint: it is still predominantly a buyers’ market, and there are often alternative suppliers willing to turn a blind eye to risks of misuse, destabilisation or diversion to illicit markets. Moreover, continuing tolerance of diversion risks by many governments, combined with wide corruption and fragile stockpile security in some regions, means that there continue to be major problems in this area.

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Sam Perlo-Freeman

The international arms trade is one of the sectors of international trade most prone to corruption. In some sectors of major weapons systems, it appears to be almost ubiquitous. This is a factor of several features of the arms trade: the very large value of some deals, which means that even a small percentage bribe can have life-changing impact; the technical complexity of deals, allowing bribes to be concealed within a complex overall package; the secrecy of arms deals, and the general lack of transparency in matters related to national security; the crowded nature of the arms market, where a large number of countries seek to maintain their own autonomous arms production capabilities, competing for a relatively small number of major deals; and the status of the arms industry and trade as being seen as a matter of key strategic importance, with top political leaders frequently involved in both sides of major deals. Indeed, the proceeds of arms trade corruption are frequently used for political finance: funding political parties, election campaigns, and political patronage networks, in both buyer and seller countries. The political importance of the arms trade has also tended to shield arms companies from meaningful legal consequences for corruption, although there are signs that this may be changing, with at least increasingly large fines imposed on companies in certain cases. The US has a stronger record in this than most other countries, although major gaps remain. Offsets remain a major corruption vulnerability in the arms trade, offering a greater level of distance and deniability between the exporting company and the corrupt benefits derived by recipients of offset transactions, potentially making detection and prosecution even more difficult than with direct bribes.

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Martin Revayi Rupiya

African military expenditure as a % of GDP has been in decline during the last decade, until it increased due to competing developed nations offering through soft loans, debt relief or outright “free-grants.” Procurement has included combat aircraft, mobile artillery, tanks, armoured troop carriers and communications vehicles, and individual soldier equipment, in countries such as Egypt, Niger, Burkina Faso, Chad and Djibouti, amongst others. The question then naturally arises that, to what extent are the recipient African member states able to repay the loans? This development has shown the limits of African national sovereignty versus international interests reflecting in the nature and character of contemporary rearmament. This article argues that some African armies have become extensions of foreign military powers serving on the periphery.