Asian Arms Deals: Number One with a Bullet

To the surprise of none and the concern of many, a recent report finds that Asia has overtaken the Middle East as the developing world’s leading market for arms. China, India, Taiwan, Pakistan, and South Korea are among the developing world’s top ten arms importers. And, while China has been the developing world’s top importer from 2001 and into 2004, in 2004 India got the top spot. Number one with a bullet, so to speak.

It also comes as little surprise that the top exporter into the region is Russia. Besides sales to China and India, Russia has also focused on building markets in such once (and future?) hotspots as Indonesia, Malaysia, and Vietnam.

Peggy, Julian, and I have written before on the lack of solid regional arrangements in Asia on issues ranging from dispute resolution to human rights. The topic of arms transfers definitely lends itself to a discussion of the uses of international organizations to increase transparency and also for confidence building. But I want to leave that for another day.

Instead I want to point out two sentences from this report that, as a former transactional attorney, caught my eye:

“Russian leaders have made important efforts, in recent years, to provide more flexible and creative financing and payment options for prospective arms clients,” the report said.

“It has also agreed to engage in countertrade, offsets, debt-swapping, and, in key cases, to make significant licensed production agreements in order to sell its weapons.”

What I see here is how creative financial lawyering is used to facilitate the arms trade. Once again, no surprise, but perhaps the role of private lawyering—for good or ill—doesn’t get quite enough attention in our discussions of so-called high politics.

I remember talking a few years ago to one international lawyer who has been involved in international dispute resolution issues in Eastern Europe, Africa, and Asia. She said that one of the great untold stories in peace-building was the work of transactional lawyers who did the grunt work of building financing mechanisms to channel capital inflows to post-conflict regions and who solidified peace agreements that were on paper with joint ventures on the ground. These joint ventures that gave participants an interest in a communal future. They changed the “payoff structure” as rational choice theorists would say. Business joint ventures as a step toward political joint ventures.

In our discussions about whether law is or is not effective in changing the behavior of states, we sometimes lose sight of the fact that law is most often used as a tool to facilitate one’s ends. And, even when discussing politico-military issues, we may need to focus a bit more on the role of private, transactional, lawyering in order to see more clearly the pas de deux of international law and politics.