New Internationalist

Death On Delivery

Issue 189

new internationalist
issue 189 - November 1988

Death on delivery
James Bond never lived so luxuriously. But Bond only had a licence to kill -
arms dealers have something much more lucrative, as Janice Turner discovered.

Joe is the arms trade's equivalent of a used car salesman. He dresses in silk and his cufflinks, tiepins and chunky rings sparkle with diamonds set in gold. He owns a string of companies and conglomerates in West Africa and has supplied arms to many countries in conflict across the continent, like Chad, Uganda and Nigeria.

His office is in London's Mayfair district, where the cars are so big they take up two parking lots. His suite is lined with tasteless burgundy leather panelling - even on the doors. Lying across his slim briefcase is a copy of The Sun - the kind of newspaper that requires a reading age of 12.

Joe owns four Rolls Royces and two private jets. He also bought a couple of helicopters for transport when he was attempting to win a seat to the Nigerian senate - in the days when Nigeria still had elections. Aside from his London office he has property in several African capitals and a farm in the affluent southeast of England.

Much of Joe's work involves supplying second-hand weapons or unmarked arms so the manufacturing country is untraceable. And rather than asking for commission from suppliers he often buys the weapons himself and sells them at a profit.

Joe likes to think he has a soft heart: when selling arms to guerilla groups with whom he sympathizes, a few bombs are thrown in free. He appears to operate by phone as well as through personal meetings in African and European capitals, and most of his weapons never see British shores. He might buy them in one country and ship them to a warehouse in Rotterdam where they stay until he finds a buyer for them. He sees nothing immoral in his business: if he didn't do it someone else would, he says.

But Joe and his methods of dealing are an exception rather than the norm in the arms-dealing world. Most dealers - invariably male and calling themselves middlemen, consultants or businessmen - tend to keep their dealings quiet and work on a commission basis rather than actually buying the hardware themselves, like Mohammed.

Mohammed is Lebanese and in his mid 40s. He lives with his wife and three children in London's wealthy Kensington district, works in a book-lined study and reads the Daily Telegraph and the Financial Times - both good for stock-market coverage.

'I got into the arms trade as an idealist,' he says, drawing on his Rothmans cigarette. 'After the coup that brought the Ba'athist government to power in Iraq, I was a consultant to the new regime. They needed weapons badly so the Iraqis brought in a group of people including me. We just went right through - Britain, France, Italy, Germany - we got arms from them all.'

Mohammed has expanded his trade into other Arab countries, notably Saudi Arabia, where business is booming for middlemen.. As with most arms dealers payola - commission or bribes - is the key to his living. There would be no reason for Mohammed's existence if every minister and ministry were above board: arms dealers are used either because deals are shady - circumventing arms embargoes for example - or to allow government officials a healthy (illegal) cut.

'There is no normal way to get into the arms trade', says Mohammed. 'It's all based on one's proximity to those in power.' But generally a dealer has a contact at the top of the government tree.

Usually a deal is worth around $50 million. It is initiated during a meeting between the 'consultant' and the minister at a five-star hotel. The minister indicates the equipment wanted. The dealer then approaches the arms manufacturers telling them that if they appoint him as their agent, he will get them a contract in return for a percentage of the value of the transaction, which could be as low as three per cent, or as high as 15 depending on how specialized is the equipment required.

Once an agreement has been reached and the minister has authorized it, an application is made to the government of the supplying country and, if approved, the transaction goes ahead. When payment is made the dealer gets his commission, normally splitting it with his mentor and possibly an official in the defence ministry who refuses to rubber stamp the deal without an 'incentive'.

'It's not the arms sales that are secret - it's the figures involved,' says Mohammed. He claims that in a recent $20 billion arms deal between Britain and Saudi Arabia, a billion dollars ended up being shared by two senior Saudis.

The latest trend, however, is barter. Now that many previously rich Arab states are virtually spent-up, oil has become a major method of paying for weapons. Many big Western arms manufacturers have whole departments devoted to arranging barter deals. Several African countries actually export food in exchange for arms.

The British establishment has become rather touchy of late about arms dealers, embarrassed by a series of press revelations about shady deals being done in London. Britain has won third place in the arms-sales league table - behind the US and the Soviet Union - partly because the US Zionist lobby has prevented many sales to Arab states from Washington, which has forced the Arabs to go elsewhere. But Mohammed says it is also because the rules governing arms sales in London are laxer than elsewhere. If you ask an establishment figure these days about arms dealers they will tell you, 'I'm sorry darling, but there really aren't any.' Mohammed demurs. 'I think the figure is around 2,000 operating in London - 300 of whom deal in more than $50 million a year.'

Janice Turner is a staff correspondent for South magazine.

Buying arms with borrowed money

Arms and debt
Around 10 per cent of Third World debt has been spent on arms. The countries that spend the largest proportion of their incomes on weapons are usually the poorest: Ethiopia spends $13 per head each year on arms (compared with only $7 on health and education combined.) Somalia spends $20 per head, Kenya $17 and Sudan $15. High military spenders like Sudan, Mauritania, Peru and Vietnam were among the first countries to default on their debt.

Who sells?
The weapons go to poor countries, the money to rich ones. Developed nations' exports accounted for $36.4 billion of the $41.4 billion arms trade in 1984. Developing countries bought $32 billion of it. The Soviet Union is the major supplier to Sub-Saharan Africa where arms spending has risen 30 percent and per capita GNP fallen by four per cent since 1970. Every year the US loans Egypt $1.3 billion for military purposes - netting US banks $600 million a year interest, almost as much as Egypt receives in economic aid.

Who pays?
The arms trade increases Third World debt, which is a burden born by the poorest. A quarter of Egypt's $40 billion debt has been spent on arms. This country spends four times as much money importing weapons as it does on health. Life expectancy is only 58 years and 25 per cent of the people have no access to clean water supplies. Ethiopia spent at least two billion dollars on arms between 1981 and 1985. It now has a total debt of $2.5 billion, its people have a life expectancy of just 43 years and only six percent of them have access to clean water.

Source: Campaign Against the Arms Trade.

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