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Global defense postures moderating, but new “Fault Lines” emerge

MD Staff

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Economic development and flat defense budgets are reducing the reliance of the world economy on defense spending, but tensions are rising along five global “fault lines,” according to Deloitte’s global Public Sector Defense practices’ report entitled 2016 Global Defense Outlook.

This report examines policies, practices and trends affecting the defense budgets and strategies of the 50 nations whose combined defense budgets total over 95% of global defense spending (the “Top 50”). In the report Deloitte also introduces its unique Defense Posture Index, a numerical ranking of national-level commitments to defense, allowing comparisons of national defense approaches and tracking of changes in national defense policies over time.

Rapid, sustained economic growth combined with broad-based declines in global levels of military operations continues to transform the global defense environment. The 2016 Global Defense Outlook report makes clear that over the next five years, economic forces appear likely to continue moderating global commitments to defense, and to increase the relative parity between armed forces capabilities worldwide.

“Only nine of the fifty largest defense spenders have raised their defense posture since 2008. One of these is in Europe; the other eight are in Africa, Asia-Pacific and the Middle East,” says Jack Midgley, Asia Pacific Region Public Sector Defense leader for Deloitte Global. “Some 41 countries, including the United States, Russia and China have held the line, or lowered their overall commitment to defense. Pakistan, India, Iraq and Russia maintain the highest defense postures, while Belgium, Canada, Argentina and Germany display the lowest ones among the Top 50 defense spending nations.”

According to the report, the combined annual defense budget of the 50 largest defense spenders is projected to remain flat at about US$1.6 trillion through 2020. Twelve of the Top 50 nations are projected to reduce annual defense budgets by a total of $44B, paced by the projected US reduction of US$38B (2020 vs. 2016).

Sixteen of the Top 50 will increase defense budgets by more than US$1B annually, adding US$91B to the total global defense budget. China, India, South Korea, and Australia―all Asia-Pacific states―plan the largest defense budget increases, accounting for US$70B or 80 percent of the total global increase through 2020.

“Even as commitments to defense continue to moderate worldwide, economic forces are creating significant new tensions among military powers,” said General Charles Wald, vice chairman and Federal Practice Senior Advisor of Deloitte LLP in the US. “These new tensions have produced five emerging fault lines around the globe, signaling that countries must be prudent and strategic with their investments in defense to address emerging threats to their nation and their implications on the world at large.”

These five emerging “fault lines” are identified in this report as:

Russia/NATO – The combination of close proximity, expanding military forces deployed near the Russia/NATO borders, and loss of previous arms control and crisis management capabilities, have created a new fault line in Europe posing increasing risks of accidental conflict.

China/Asia-Pacific States – This deepening fault line has its roots in the growing importance of maritime commerce to all Asia-Pacific economies, combined with the absence of international laws, treaties or institutions equipped to manage conflicting national economic interests.

Terrorists/Organized States – As this fault line between terrorist groups and the governments these groups are working to undermine deepens, the lack of local or global institutions to address terrorist activity, and the new tools provided by emerging technology, indicate that terrorism-related challenges appear likely to persist.

Mature/Emerging Nuclear Powers – A new global fault line has emerged, indicating that the proliferation, accidental use or even theft of nuclear weapons or fissile material may be increasingly likely in the absence of revised and more generally accepted international principles for governing these dangerous weapons.

Information Economies/Emerging Economies – A small group of advanced economies, heavily dependent on the internet, appears highly vulnerable to cyberattack and exploitation by military organizations or private hackers in countries whose limited reliance on the internet makes them far less vulnerable.

Additional Report Highlights

Global commitments to defense have moderated, as economic development reduces dependence on defense spending. Pakistan, India, Iraq and Russia maintain the world’s highest commitments to defense, as measured by Deloitte’s Defense Posture Index.

Deloitte’s Defense Posture Index reveals that only nine of the fifty largest defense–spending nations raised their commitments to defense over the past five years. Only one of these is in Europe (France); the other eight are in Africa, Asia-Pacific and the Middle East.

Forty-one nations including China, Russia and the United States maintained or lowered their commitments to defense. These nations account for about 80 percent of the total global defense budget projected for 2020.

Terrorist incidents in sub-Saharan Africa increased by 840 percent in 2012-2014 compared to 2005 – 2007. Over 140 “persistent” terrorist groups now operate worldwide – double the number operating in 2005 – 2007.

The “Cyber Ten” – led by South Korea, the Netherlands, Switzerland, Denmark, and Finland – appear six times more vulnerable to cyberattack than the ten least vulnerable Top 50 countries.

Industrial control systems (ICS) are a growing source of vulnerability to cyberattack. The ten countries most dependent on these systems present over forty times more internet-exposed ICS than the least-dependent countries.

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Defense

How 1971 war Brought Pakistan Closer to Nuclear Bomb

Qura tul ain Hafeez

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Ever since its independence Pakistan is a neighbor of shrewd enemy who always tried nothing better than to undo and divide Pakistan into pieces like what it did in the war of 1971. So it was necessary for Pakistan to acquire a security mechanism that can balance the power equation in the region. It’s pertinent to flash back in the history to answer the question that why after the war of 1971 it was necessary for Pakistan to acquire nuclear weapon. It was not the first time when India entered into to direct full-fledged war with Pakistan in 1971.At the time of independence there were almost 650 princely states in subcontinent that were ruled by princes. These states were given the option by the British Government to either adjoin with India or Pakistan.  Based on the religious line the Majority of the population of Kashmir, Junagarh and Hyderabad Dakan decided to adjoin with Pakistan however India maintained its hostility and once again propagated with the Hindu Raja’s (the ruler of states) and included them in India. Only it was Kashmir which was divided into Indian occupied and Azad Jamu Kashmir as a result of Indo-Pak War of 1948.

Continuing in its conspiracy against Pakistan India waged a war once again in 1965. It did not stop here played its role in giving Pakistan a huge loss in 1971.In the history of Pakistan the Indo-Pak war of 1971 has marked perhaps the darkest memory. It was the time when Pakistan was already weak and trying to overcome the suffering of 1965.Moreover, the internal political instabilities due to the economic, political rights of the people of East Pakistan. Various ethnic and lingual differences were contributing to destabilize the central command. India who was already for the moment just jumped in the scenario. It further fueled the burning conflict the make the situation worse. Furthermore in all this scenario Bengali population was an easy prey for Indian propaganda because they were already being exploited economically and politically. Thus the political clashes between the eastern and the western side of Pakistan turned into ethnolinguistic civil war.  The Indian government supported muktibahini and fed them with the arms and weapons eventually declaring war against Pakistan. This shredded Pakistan into two pieces. Pakistan lost its eastern half-1,600km (990 miles) of India as a result Bangladesh emerged as a new country in south Asia’s map.

Consequently due to such a huge loss Pakistan suffered a lot economically as well as politically. In the very same era while Pakistan was not strong enough and suffering from the wounds of 1971 war India launched it’s so called “peaceful nuclear test” in 1974. Indian nuclear tests create a security dilemma for Pakistan and a further hampered the security situation for Pakistan. In South Asia the geostrategic environment has always been very complex volatile and vulnerable it was quite difficult for Pakistan to assure its survival and national security interests without nuclear technology. In order to secure its vital foreign policy, territorial integrity and to maintain deterrence against its enemy (hostile India) Pakistan started its efforts to acquire Nuclear weapon and in 1998 did successful nuclear tests.

Currently if Pakistan did not have acquired a nuclear technology India must have done the same on the western border i.e. Baluchistan what it has done earlier in East Pakistan. Although it is very much involved in watering the seeds of the terrorist activities in Baluchistan.

Today it has been 48 years still India is engaged in fermenting trouble in Pakistan through its proxies like BLA and TTP. Kulbushan Yadave an Indian spy caught by Pakistan Intelligence is an example of Indian propaganda which shows that. India continues to kept propagating against Pakistan which is causing various internal security threats including the biggest one i.e. terrorism. Moreover the recent attack on the Chinese consulate in Karachi on 23 November, 2018 by BLA is one of another Example of Indian conspiracy by feeding the terrorist groups in Pakistan. However it’s now difficult for India to lodged a full fledge war against Pakistan like past because now Pakistan has acquired nuclear technology and war against Pakistan means mutual destruction for India as well. This time purpose behind India’s vested activities is to   distract the unity all across the country by targeting all those developmental and economic projects which are being established under the umbrella of CPEC.

Now Pakistan has learned security lessons from East Pakistan. It is aware of India’s motivations and its presence in Afghanistan and Iran. Pakistan is now moving for good diplomatic relations and friendly regime in Afghanistan so we can be friends with them. Pakistan is one of the top countries who are fighting against terrorism and extremism. Now Pakistan is the world’s 7th atomic power. Its army is one of the most efficient army of the world and it knows how to defend its countries against the enemies like India.

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European army: An apple of discord

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The initiative of creating a European Army actually is in the air of the European Union.

Both French president Emmanuel Macron and German chancellor Angela Merkel declared this month that they support the need to create a joint European army. By the way these two countries are the strongest EU member states from economic and political points of view. Their words are not just “air shaking” but the subject to think it over.

France is the only remaining nuclear power in the EU once Britain leaves the organization – and Germany – its major economic power. Both countries make up about 40 % of the industrial and technological base in Western and Central Europe, as well as 40 % of the EU overall capabilities and of combined defence budgets.

The main reason why European leaders voiced the initiative now can be considered from two different points of view. From one hand this can be the indicator of European fears of Russia, China and even the US military activities. According to Macron, “an EU army is needed to “protect ourselves” with respect to these states.”

On the other hand such initiative can be used by France and Germany to stop the US from weakening Europe and promoting its interests in the region. Donald Trump reacted to the statement by tweeting: “Emmanuel Macron suggests building its own army to protect Europe against the U.S., China and Russia. But it was Germany in World Wars One & Two – How did that work out for France? They were starting to learn German in Paris before the U.S. came along. Pay for NATO or not!” Thus, he tied closely the idea of a European Army to his demand to increase defence spending to NATO.

At the same time the initiative of strengthening the European collective defence capabilities not only irritates the US but scares many EU countries as well.

As for the Baltic States, they have not formed their official opinion yet. The matter is the Baltics are “between two fires.” The EU membership gives them good political positions in Europe where they try to gain respect and influence. But the US remains their main financial donor and security guarantee at the moment. They can’t sacrifice relationships with Washington for the sake of ephemeral European Army. It means that there is a greater likelihood that Latvia, Lithuania and Estonia will softly reject the idea. It is not necessary to expect strong opposition to Germany and France. But they surely will do their best to postpone decision making.

After all the initiative could become an “apple of discord” in the EU and split the organization in two sides making the organization even weaker than now.

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Global arms industry: US companies dominate the Top 100, Russian arms industry moves to second place

MD Staff

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Sales of arms and military services by the world’s largest arms-producing and military services companies—the SIPRI Top 100—totalled $398.2 billion in 2017, according to new international arms industry data released today by the Stockholm International Peace Research Institute (SIPRI).

The total for the SIPRI Top 100 in 2017 is 2.5 per cent higher than in 2016 and represents an increase of 44 per cent since 2002 (the first year for which comparable data is available; figures exclude China). This is the third consecutive year of growth in Top 100 arms sales.

US companies increase their share of total Top 100 arms sales 

With 42 companies listed in 2017, companies based in the United States continued to dominate the Top 100 in 2017. Taken together, the arms sales of US companies grew by 2.0 per cent in 2017, to $226.6 billion, which accounted for 57 per cent of total Top 100 arms sales. Five US companies were listed in the top 10 in 2017. ‘US companies directly benefit from the US Department of Defense’s ongoing demand for weapons,’ says Aude Fleurant, Director of SIPRI’s Arms and Military Expenditure Programme.

Lockheed Martin remained the world’s largest arms producer in 2017, with arms sales of $44.9 billion. ‘The gap between Lockheed Martin and Boeing—the two largest arms producers in the world—increased from $11 billion in 2016 to $18 billion in 2017,’ says Fleurant.

Russia becomes the second largest arms producer in the Top 100

The combined arms sales of Russian companies accounted for 9.5 per cent of the Top 100 total, making Russia the second largest arms producer in the Top 100 in 2017—a position that had been occupied by the United Kingdom since 2002. Taken together, the arms sales of the 10 Russian companies listed in the Top 100 increased by 8.5 per cent in 2017, to $37.7 billion. ‘Russian companies have experienced significant growth in their arms sales since 2011,’ says Siemon Wezeman, Senior Researcher with SIPRI’s Arms and Military Expenditure Programme. ‘This is in line with Russia’s increased spending on arms procurement to modernize its armed forces.’

In 2017 a Russian company appeared in the top 10 for the first time since SIPRI started publishing its annual Top 100 list. ‘Almaz-Antey, which was already Russia’s largest arms-producing company, increased its arms sales by 17 per cent in 2017, to $8.6 billion,’ says Alexandra Kuimova, Research Assistant with SIPRI’s Arms and Military Expenditure Programme.

Along with Almaz-Antey, three other Russian companies in the Top 100 increased their arms sales by more than 15 per cent: United Engine Corporation (25 per cent), High Precision Systems (22 per cent) and Tactical Missiles Corporation (19 per cent).

The UK remains the largest arms producer in Western Europe

The combined arms sales of the 24 companies in Western Europe listed in the Top 100 increased by 3.8 per cent in 2017, to $94.9 billion, which accounted for 23.8 per cent of the Top 100 total. The UK remained the largest arms producer in the region in 2017, with total arms sales of $35.7 billion and seven companies listed in the Top 100. ‘The combined arms sales of British companies were 2.3 per cent higher than in 2016,’ says Fleurant. ‘This was largely due to increases in the arms sales of BAE Systems, Rolls-Royce and GKN.’

BAE Systems, which is ranked fourth in the Top 100, is the UK’s biggest arms producer. Its arms sales rose by 3.3 per cent in 2017, to $22.9 billion.

Other notable developments

  • The arms sales of Turkish companies rose by 24 per cent in 2017. ‘This significant increase reflects Turkey’s ambitions to develop its arms industry to fulfil its growing demand for weapons and become less dependent on foreign suppliers,’ says Pieter Wezeman, Senior Researcher with SIPRI’s Arms and Military Expenditure Programme.
  • Taken together, the arms sales of the four Indian companies ranked in the Top 100 totalled $7.5 billion in 2017, representing a 1.9 per cent share of Top 100 arms sales.
  • Sales of the top 15 manufacturing companies listed in the Fortune Global 500 totalled $2311 billion in 2017. This is almost 10 times greater than the total arms sales of the top 15 arms producers ($231.6 billion) in 2017, and almost six times greater than the total combined arms sales of the Top 100 ($398.2 billion).
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