Written by admin on Thursday, September 19th, 2013
We’re all familiar with the multinational Joint Strike Fighter (JSF) and its nine international partners that are patiently waiting along with the U.S. military for the JSF to be fielded but not many are aware of the multitude of other development programs that are aggressively pursuing foreign military sales. Foreign Military Sales or FMS have risen to the surface due to the recent realities of sequestration and its long term budget impacts on the Department of Defense (DOD). The DOD has realized that in order to recoup costs they need to actively reach out to foreign buyers and looking beyond the JSF is good business.
Foreign Military Sales normally account for approximately $35 billion in sales but in 2012 the U.S. tipped the scales at $65 billion and it’s expected to continue to rise. With the purchase of F-15s by Saudi Arabia, C-17s by NATO and the multitude of UAVs being marketed to various countries, it appears that its high tide for U.S. Foreign Military Sales. In total, Foreign Military Sales account for over $385 billion dollars and 3.5 million jobs in the U.S. and with 224 foreign customers, almost every country in the world buys military equipment from the U.S. and with negotiations under way with Iraq, Philippines, Afghanistan and Kuwait, that number is expected to continue to grow.
The advantages of selling to foreign customers is it provides revenue for the defense industry and U.S. coffers and it creates a partnership with the country as an extension of good will. The disadvantages of selling arms to foreign customers is that the technology can be reverse engineered and used for their own production goals and in some rare cases, the arms that are sold could be used against the U.S. In the case of Iran, after years of selling U.S. military equipment to the Iranians, that same equipment was used against the U.S. after the overthrow of the Shah in 1979 and the U.S. Navy had multiple encounters with Iranian F-14A Tomcats in the skies over the Persian Gulf.
Although there are some negative effects to Foreign Military Sales the advantages certainly outweigh the disadvantages. Providing military arms to foreign customers continues to provide critical income to a defense industry that has been greatly diminished domestically by sequestration and instead of relying upon indigenous customers, a good business must adapt and evolve and foreign markets are an obvious choice.
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