Germany increases its market share as a weapons exporter

Interview with Otfried Nassauer
(Translated by Agatha Haun)

Iranian Radio: The Deutsche Welle [German radio] reported yesterday, with reference to the Stockholm International Peace Research Institute (SIPRI), that Germany's weapons exporters are already among the largest in the world. In the period between 2003 and 2008 Germany increased its market share from 7% to 10%. I would like to hear your analysis of this.

Nassauer: In fact, in recent years, weapons exports have again greatly increased, world-wide, especially in those years that you mentioned. The German share in these weapons exports has also grown larger. In SIPRI's reports, Germany definitely appears far in the lead with weapons exports, because SIPRI attaches a relatively high value to the export of used weapons, since they assume the residual value of these weapons and not the "scrap value" assumed by the German government, for example. And if one looks for the reasons why Germany has exported so many armaments goods in the last five years, for one thing, it has to do with the fact that many of the Bundeswehr's [German military] used weapons have been exported, which are no longer needed because the Bundeswehr has been reduced in size; and secondly, that a very expensive weapons system, namely submarines, is being sold to many countries.

Iranian Radio: Thus different evaluation procedures lead to different statements about the share of the German weapons exports. Can you perhaps clarify that with an example?

Nassauer: There are several reasons for this difference: For one thing, as a rule, the German government gives information about which authorizations it has issued, but not about the real volume of armaments exports. That is the one major reason for this difference.

The second reason is that the German government counts all the armaments goods, whereas SIPRI lists essentially large weapons systems and relatively large components, which turn up in the international armaments press and whose export is described there. That means that the database is already a difference. The rest I've already mentioned. The German government puts a much lower value than SIPRI does on the used weapons that are sold because they are no longer needed by the Bundeswehr. SIPRI estimates so to speak a residual value, the German government – to put it simply - a scrap value.

And there is also a third reason why the assessed value is so different: it is in fact the case that at SIPRI, very long time periods are analyzed according to which they attempt to develop a standard that can be used to report about all countries equally. The German government concentrates its reports only on the German system and employs a completely different reporting standard.

Iranian Radio: What kinds of weapons are involved there?

Nassauer: The armoured vehicles and submarines or warships make up a large part of the SIPRI lists. That can be seen very clearly in the years 2003 to 2008, that are taken into account in the new SIPRI figures: the emphases are, on the one hand, armored vehicles such as the Dingo - that's a kind of Unimog [multi-purpose, 4-wheel drive, medium truck, produced by Mercedes-Benz = universal-motor-geraet (machine) -- Wikipedia] with an armoured body - armoured howitzers and used tanks of the Bundeswehr. Just in 2007 alone, the Bundeswehr sold more than 400 used tanks. These tanks went, among other places, to Chile, to Brazil, to Greece, to Singapore, and to Turkey. That's a tremendous amount. These numbers result from that.

The second area that I mentioned are submarines. The new submarine 214, produced by the Thyssen Group, HDW's mother company, is a very modern conventional submarine, whose drive is attractive for many countries because it's independent of the outside air and functions on the basis of a fuel cell. A whole series of these submarines were exported in the last few years: to Greece, to South Korea, to Turkey, with which a contract is soon to be concluded. And since submarines are very expensive, one can clearly see that through their sales, naturally armaments exports significantly increased.

Iranian Radio: What guidelines must be adhered to in that process? Assuming that a weapons firm wants to export armaments, what must it pay attention to?

Nassauer: In Germany there is a series of limitations that regulate the export of armaments goods: For one, at the national level, that includes the Law for the Control of Weapons of War [Kriegswaffenkontrollgesetz]. All genuine weapons of war fall under that. And it is actually the case that here everything is prohibited that the German government has not explicitly permitted. That means that for every weapon of war, if I want to export it, I must actually submit an application to the German government. It has to be approved. But then there are also other armaments goods, for example armaments that can have a dual use, meaning is civilian and military, for which another law applies. That is the Foreign Trade Law [Aussenwirtschaftsgesetz] with the Foreign Trade Decree [Aussenwirtschaftsverordnung] attached. And there the opposite legal regulation applies. Actually, everything is allowed that isn't prohibited. Nevertheless, here an application must be submitted to the Federal Export Bureau [Bundesausfuhramt] for many goods that stand on a corresponding list. And if it is approved, only then may the company make a delivery. Otherwise, it commits an export crime. And finally, in addition to these lists, there are the international agreements, for example, about the restrictions on the trade in materials that can be used for the nuclear industry, that can be used for building missiles, that can be used for chemical and biological weapons and several more. There too the German government put into effect what has been agreed on at the international level, and it does do that. And also for each item there it is necessary to obtain the authorization, or to ask whether an authorization is required.

Iranian Radio: Which countries receive German weapons? You've already named some of them, but certainly other countries also import weapons from Germany.

Nassauer: In the last five years the two largest importers have been Greece and Turkey; they're both countries that have been supplied by Germany over many years, and where one could say ironically that the German armaments deliveries are fuel cells for the regional arms race between the two countries. Besides these two countries, very different states appear repeatedly. For example, Israel is always an important recipient when it acquires submarines from Germany, since submarines are so expensive, but the number of items is still quite small. Other countries are relatively high up in the statistics just when they acquire used Bundeswehr weapons, for example. Thus that would be the case, for example, with Chile with used Leopard tanks, or with Brazil. And finally there are countries with which major projects are carried out. Therefore, in the latest German government statistics, Pakistan was suddenly one of the countries that stood relatively high up among the recipients, because here a series of projects were in the authorization phase and therefore: although these deliveries have thus far not taken place, they will appear relatively high up in the statistics.

Iranian Radio: As a weapons importer, what position does the Middle East occupy in the German government's statistics, and at SIPRI?

Nassauer: The Middle East doesn't play a conspicuous role as a recipient of German weapons. There it's actually more a matter of its being a midfield area. The Middle East really is exciting in the SIPRI numbers. After the years when armaments exports there decreased in importance, in the last five years it has again become an important recipient of armaments goods. SIPRI calculates a 38% rate of increase for the entire Middle East, in which naturally the chief suppliers are the USA, Great Britain, and Russia. But the Middle East is described, so to speak, as a region that again is of greater importance as a market for the major armaments producers. For that reason, some of the Middle East states in fact appear again very high up in the hit list, "Who is the largest recipient?" What is astonishing, though, is that some data constitute what, let's just say, is a major apparent contradiction to the international point of view. For example, interestingly Iran, whose armaments imports are extensively reported in the newspapers, only appears in place 27 as a major recipient in SIPRI's reports. Therefore: it is a comparatively small recipient, which on the other hand has to do with the fact that first of all, there were speculative reports about many armaments deliveries to Iran and especially about the goods which come from Russia; it is often speculated that deliveries are made when the contracts have not yet been concluded and therefore Iran is a larger armaments importer than it actually appears to be in the SIPRI statistics.

Iranian Radio: You mentioned two countries, namely Israel and Pakistan, that are in crisis regions. With reference to this, aren't there any restrictions imposed by law?

Nassauer: In principle, there should be absolutely no deliveries to regions where there is a danger of that military violence could break out. The German political guidelines for armaments export provide for that, but they can be interpreted. They aren't a legal basis, they're political self-commitments. Therefore they're circumvented relatively often and many weapons that are delivered by the German government turn up in regions where later then a war may be fought. Tha's a problem, when they export armaments goods: they have a life expectancy of 20, 30, 40 years and the political situation in the recipient countries cannot be foreseen everywhere for this period of time. However, it is to be observed with these figures now published by SIPRI, that the German weapons exports have increased to countries of the European Union in much greater proportion. Thus the increase is not 70% but rather 123%. That shows that Germany constantly contributes more components to the armaments exports of other countries. Thus, for example, heavy motors, drives, and similar items. Those are actually developments about which one must say that "Made in Germany" is written inside a weapons system and not outside, on the exterior surface.

Iranian Radio: What is the outlook for the weapons export trend?

Nassauer: The trend for German armaments exports can be readily foreseen only in certain sectors, for example, with the submarines. There it's clear that through the introduction of a new generation of export vessels in the next few years, the German armaments industry will be relatively well off, assuming that the financial crisis doesn't again wreck some of the planned transactions. For example, that could be the case in Pakistan, because at the same time, Pakistan must also meet conditions within the framework of receiving financial assistance from the IMF and is supposed to reduce its armaments expenditures. However, it's practically impossible to make a general prediction about how the German armaments exports will develop in the next five or ten years. Thus there are no data there and also no reasonable possibilities for making a prediction, especially as you yourself probably know very well, armaments exports for many recipients are connected to politicians receiving money, middlemen receiving money, corruption is related to that, and therefore decisions are not always made according to rational points of view.

is a free-lance journalist and director of the Berlin Information Centre for Transatlantic Security - Berliner Informationszentrum für Transatlantische Sicherheit - BITS