Global recession timeline

HSBC shows that large losses in the US mortgage market arms household finance because of subprime losses, could be in one of the first signs that the U.S. housing market is acidic, and that it have impact on the global financial sector. Full story

New century financial, a leading subprime lender, files for bankruptcy. It is the first signal, mortgage of lenders is that something we seriously wrong. Shares in other US mortgage banks such as the countrywide come under pressure. Full story

Credit markets in freefall after Paribas announces that two its hedge fund due to "complete evaporation of liquidity" be frozen which in asset-backed security market. European Central Bank 170bn injected euro in the banking market and fed lowers interest rates. Bank of England refuses to intervene in credit markets. Full story

Savers in the besieged UK former building society Northern Rock start withdrawing their savings after the BBC shows that the Bank of the Bank of England has received emergency financial support. Northern Rock is in trouble, as dependent strong money on the wholesale market, to finance its operations, and these markets have dried up. Full story

US investment bank Bear Stearns is by rival Bank JP Morgan Chase to the Government a $30 provides guarantee against losses mounting saved. It is the first sign, which, instead of easing, the financial crisis is getting worse, but investors are relieved that US Government ready to act as lender of last resort. Full story

US Government rescues giant mortgage lenders Fannie Mae and Freddie Mac, among them into temporary public ownership, after they show huge losses on the United States subprime mortgage market. Their failure would have caused a run on the dollar as their bonds, believing that they were already guaranteed by the Government had invested in many foreign Governments. Full story

Bankruptcy is US investment bank Lehman Brothers, after the Government refuses, you bail-out. Merrill Lynch is by the Bank of America bought after it revealed large losses is facing. Insurance company AIG granted guarantees for subprime mortgages, is on the next day with a $85bn loans of Treasury rescued. Full story

A ?12 is Lloyds. 2bn takeover of the ailing, Halifax Bank of Scotland (HBOS), Britain's biggest mortgage lender, after its shares amid concerns about the company are the future. The British Government calls a public interest clause, competition law, to work around, as the new Bank responsible for close to one third of the UK savings and mortgage is market. Full story

The largest financial bailout in U.S. history is approved after a strenuous debate in Congress, and first loss a week earlier. Republicans and Democrats alike reluctant bail out of the banks with such large sums of money while ordinary citizens in the recession suffered. The Bail-Out support both presidential candidates. Full story

The are two major UK banks, RBS and HBOS, in deep trouble as reduce financial markets. After merged with is the September HBOS, Lloyds by the huge debts taken by his new partner in the mortgage market, while RBS struggling with the costly association with ABN AMRO. The British Government injected ?37bn to stabilize both banks. Full story

The US Central Bank cuts its interest rate to 0 - 0.25% in an attempt, money in the economy, borrowing facilitating deepen reduce recession, and to consider, a program of quantitative easing throw begins. It is the lowest interest in the history of the Fed. Full story

President Obama wins his first major victory in Congress, a huge economic recovery in the prevention of United States correction fall into recession as one of the credit crisis. Much of the money go to prevent, to the States that establishing of employees in the public service, but some schools and green energy will be invested in infrastructure projects such as roads,. Full story

Promise to help emerging and promise additional $1.1 trillion world coordinated measures to combat the slump and improve the regulation. Gordon Brown is a global summit triumphant, which he claims is a turning point in the crisis and stock markets are beginning again to revive. Not all the money pledged is however actually delivered. Full story

The UK Chancellor Alistair Darling shows that the credit crunch financial history of the ?175bn to double debt, with total Government ?1 to the largest budget deficit in UK trillions to 2014. Mr Darling are two parliaments or 10 years it takes to get the budget back to the position, before the credit crisis. Full story

Read more >>

Global problem

15 March 2011, last updated at 12: 12 GMT Jorn Madslien business reporter, BBC News Japan has stopped production of cars and components for export and it is not yet clear how close this abroad with Japanese automaker its factories after the earthquake and tsunami will have, Investors wanted to immediately out.

On Monday, the value of the shares in the Japanese car companies began as investors fell up to sell.

First of all, many of them bought shares in automaker of the world instead - based on the logic that non-Japanese automotive company would fill the gap by Japanese car manufacturer could not be delivered.

"Hyundai and Ford cars now are good replacement for Toyota, and more, can caterpillar tractors made in China, Komatsu's country movers, replace" according to Peter Morici, a business professor at the University of Maryland.

"Globalization offers Japan export customers alternatives she not a decade or two above could have enjoyed."

Parts shortages loom

But during such a crisis, globalization poses huge problems.

Read the main story

"all communities that have supported many of these plants have uprooted or are still unclear"

end quote Paul Newton motor industry analyst, IHS global insight from now, investors have come to recognize that you weiterHonda the difficulties of companies such as Toyota and Mazda, Nissan is similar to in Detroit or Chennai in Sunderland or Seoul faced.

The hard truth in this devilishly complex and globally networked world of motoring is that they all addressed parts lack - if not now, then probably very soon.

"The suppliers production total production could Newton, slightly, according to Paul motor industry analyst at IHS global insight, influence" "given that some provide plants of the affected component with systems and components, the not easily to other production sites can be moved [automakers] facilities all over the world."

'Tragic loss'

The North-East of Japan, where the most devastation caused the earthquake and tsunami, is the home to many of the country part of car manufacturers, supplying car manufacturers not only in the vicinity, but all over the world.

Some 20,000 parts are required to stop a car building

Toyota President Akio Toyoda points out that "those taken directly and vastly affected our distributors, suppliers and many other partners are".

Japanese specialist companies have components such as batteries for hybrid cars, electronic parts and engine parts supplies for years.

But many Japanese roads and ports in tatters and with own production facilities to stop - in some cases because manufacturer below or because the power deficiencies are the component own suppliers after it's clear that many parts simply not in the near future is.

"The tragic loss of life and homes across the region means that even if fixed infrastructure and facilities can, entire communities have supported many of these plants have uprooted or are still unclear," Newton says Mr.

Complexity

And even if the components are made, they get shipped - whether factories in Japan or of the country - would be difficult.

Continue reading the most important story

until now, we do well, but the crisis should be extended emergency would cause "

Renault Samsung in South Korea quote end this could prove very difficult for manufacturers, and the problem could last for a long time."

"A finished car requires more than 20,000 parts," observed Tong Yang securities motor industry analysts.

"It is difficult to predict if production [in Japan] can continue until we know which parts of car manufacturers are affected and to what extent."

It is also difficult to predict if parts will start bottlenecks, bite all over the world.

"We have an inventory of two to three weeks," says an official at Renault Samsung in South Korea for Nissan Almera and sunny cars produced and imported about a 10 of its parts from Japan.

"So far are we do well, but should the crisis be extended emergency would result."

In the United States some car manufacturers have already to share cut back on overtime news according to industry journal automotive.

And with parts shortages threatening to have investors began shares nothing with even the slightest touch of the automotive industry - send lower shares in automaker to shed quite a bit across the Board.

Uncertainty

About investors often react, and on this occasion, they appear once again done according to Nomura, who describes the reaction as "exaggerated".

The sell-off of shares in Toyota and Nissan is particularly hard to shave 8% and 10% discount on the value have been.

But not more than 2.4% as a result of should fall on the two automakers operating the earthquake and tsunami, Nomura's analysts predict, although they do not expect to hear investors.

For the time being is the only thing investors are sure that much about the global impact on the automotive industry remains unknown.

And many of them fear that the situation becomes clearer, new problems will arise.

Read more >>

Global food prices hit record

3 March 2011 last updated at 16: 30 GMT food markets are "already precarious", the UN says global food prices hit record highs have, and even could further increase according to the United Nations.

The UN food price index increased 2.2% in February to its highest level since the beginning of the monitoring prices in 1990, the UN food and Agriculture Organization (FAO).

He warned also that tips in might make worse oil price "already precarious" situation in the food market.

Apart from sugar, the FAO said all commodity groups in the price rise.

Oil prices hit highs due to political unrest in North Africa and the Middle East before recently two - and a half years.

The FAO said that have added to the volatility on the oil markets to an already difficult and precarious situation.

"This adds to start even more uncertainty with regard to the price Outlook as well as planting crops in some of the most important growing regions," said the FAO David Hallam.

The International Monetary Fund (IMF) said he "was concerned about the situation".

IMF spokesman pointed out that "effects on the poorest and weakest, for all in the countries with low income, but not only there" Caroline Atkinson.

The prices of cereals, wheat, rice and maize, have risen in the last year to 70%.

This is both significant crop producers on droughts in Eastern Europe and floods in Australia.

The FAO said that it expected world cereal production to a total decreased in the last year.

In addition, it is also forecast increased demand for agricultural products for food, feed and fuel production.

These contradictory pressures could push higher prices.

However, the FAO said there were positive signs, the agricultural areas in Russia, which had droughts and forest fires Ukraine and Kazakhstan to the recovery of the last year.

Read more >>

Global obesity has been rising throughout the past decade

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Obesity is a growing global health problem. Obesity is when someone is so overweight that it is a threat to their health.

Obesity typically results from over-eating (especially an unhealthy diet) and lack of enough exercise.

In our modern world with increasingly cheap, high calorie food (example, fast food — or “junk food”), prepared foods that are high in things like salt, sugars or fat, combined with our increasingly sedentary lifestyles, increasing urbanization and changing modes of transportation, it is no wonder that obesity has rapidly increased in the last few decades, around the world.

This web page has the following sub-sections:

Number of People Overweight or With Obesity Rivals World’s HungryObesity on the IncreaseObesity Affects Poor as well as RichHealth impactsVarious causes of obesityAddressing Obesity Globally, Nationally, Locally, IndividuallyHealthy versus Unhealthy Food Marketing; Who Usually Wins?Talk of banning ads to kids met with resistance from industryIndustry attempts at self-regulation not working, sometimes reversingTaxing junk food; a popular idea, but realistic?Number of People Overweight or With Obesity Rivals World’s Hungry

In the poverty section primarily, but also in other parts of this web site, much has been written about the causes of hunger in the face of abundant food production due to things like land use, political and economic causes, etc. However, there is another side to this emerging as well: growing obesity. The World Watch Institute noted this quite a while ago and is worth quoting at length:

For the first time in human history, the number of overweight people rivals the number of underweight people.… While the world’s underfed population has declined slightly since 1980 to 1.1 billion, the number of overweight people has surged to 1.1 billion.

… the population of overweight people has expanded rapidly in recent decades, more than offsetting the health gains from the modest decline in hunger. In the United States, 55 percent of adults are overweight by international standards. A whopping 23 percent of American adults are considered obese. And the trend is spreading to children as well, with one in five American kids now classified as overweight.… [O]besity cost the United States 12 percent of the national health care budget in the late 1990s, $118 billion, more than double the $47 billion attributable to smoking.

… Overweight and obesity are advancing rapidly in the developing world as well … [while] 80 percent of the world’s hungry children live in countries with food surpluses.

… technofixes like liposuction or olestra attract more attention than the behavioral patterns like poor eating habits and sedentary lifestyles that underlie obesity. Liposuction is now the leading form of cosmetic surgery in the United States, for example, at 400,000 operations per year. While billions are spent on gimmicky diets and food advertising, far too little money is spent on nutrition education.

— Chronic Hunger and Obesity Epidemic; Eroding Global Progress, World Watch Institute, March 4, 2000 (Emphasis added)

In the above, note also how many resources are “wasted” or diverted to either deal with the ramifications (such as health costs), or to deal with the symptoms (via techniques such as liposuction). Of course, that is not to say that resources should not be spent on these things at all, but that it is far more cost effective and more desirable to treat the root causes, as treating symptoms only leaves underlying causes in tact.

This is an example of “hidden” costs of consumption on top of the “visible” costs. The World Watch Institute article, quoted above, goes on to further show that comparatively less expensive measures that deal with causes have been very effective at reducing obesity problems, such as teaching nutritional literacy in schools.

The BBC revealed that food wastage is enormous. In the United Kingdom, some astonishing 30-40% of all food is never eaten, while in the US, some 40-50% of all food ready for harvest never gets eaten. UK alone sees some £20 billion ($38 billion US dollars) worth of food thrown away each year. Furthermore, the additional rotting food creates methane, a potent greenhouse gas.

As people eat more and more health and safety of the food production process become more important, too. Nursing Schools lists a number of concerning facts about food in the US:

40-50% of all food ready for harvest never gets eaten.Every year, over 25% of Americans get sick from what they eat.As few as 13 major corporations control nearly all of the slaughterhouses in the U.S.Americans eat 31% more packaged food than fresh food.The FDA tests only about 1% of food imports. (The US imports about 15% of what they eat.)A simple frozen dinner can contains ingredients from over 500 different suppliers so you have to trust all of those hundreds of companies along the way stuck to regulations about food safety.50% of tested samples of high fructose corn syrup tested for mercury.Americans eat about six to nine pounds of chemical food additives per year.Food intolerance is on the rise, with as many as 30 million people in the U.S. showing symptoms.Fewer than 27% of Americans eat the correct ratio of meats to vegetables.80% of the food supply is the responsibility of the FDA yet the number of inspections has decreased while the number of producers has increased.Keeping fields contamination-free can cost well over $250,000–a discouraging sum to smaller farmers.Back to top

Obesity on the Increase

The World Watch Institute’s statistics above are now over 8 years old but still useful for context.

The World Health Organization (WHO) provides a number of facts on obesity, including that globally in 2005:

Approximately 1.6 billion adults (age 15+) were overweightAt least 400 million adults were obeseAt least 20 million children under the age of 5 years are overweight globally in 2005.

The WHO also projected that by 2015, approximately 2.3 billion adults will be overweight and more than 700 million will be obese.

Childhood obesity is also an increasing concern for the WHO:

The problem [of childhood obesity] is global and is steadily affecting many low- and middle-income countries, particularly in urban settings.… Globally, in 2010 the number of overweight children under the age of five, is estimated to be over 42 million. Close to 35 million of these are living in developing countries.

Overweight and obese children are likely to stay obese into adulthood and more likely to develop noncommunicable diseases like diabetes and cardiovascular diseases at a younger age.

— Childhood overweight and obesity, WHO, last accessed August 22, 2010

Recent years have seen a large increase in those overweight or obese.

The WHO provides charts showing how the prevalence of those who are overweight or obese has increased between 2002 and 2010 for both males and females over 15:

Male obesity 2002–2010Female obesity 2002–2010Male obesity 2002–2010Source: Prevalence of overweight & obesity for males over 15, 2002 - 2010, WHO International Comparisons, last accessed November 19, 2010

Female obesity 2002–2010Source: Prevalence of overweight & obesity for females over 15, 2002 - 2010, WHO International Comparisons, last accessed November 19, 2010

the Center for Disease Control and Prevention (CDC) in the US provided a series of charts showing how obesity has dramatically increased amongst adults in the US from 1985-2008:

Percent of Obese (BMI > 30) in U.S. Adults in 2009Source: U.S. Obesity Trends 1985–2009, CDC, August, 2010

(I have not found similar sources for other countries, yet. If you know, please let me know.)

Also note that the WHO figures above are using a body mass index of greater than or equal to 25 as it includes both overweight and obese. The CDC numbers for US states are obese numbers only.

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Obesity Affects Poor as well as Rich

Obesity also affects the poor as well, due to things like marketing of unhealthy foods as the Pan American Health Organization (PAHO) highlights. “Restrictions in access to food determine two simultaneous phenomena that are two sides of the same coin: poor people are malnourished because they do not have enough to feed themselves, and they are obese because they eat poorly, with an important energy imbalance… The food they can afford is often cheap, industrialized, mass produced, and inexpensive.”

The WHO that many low- and middle-income countries are now facing a “double burdern” of disease:

While they continue to deal with the problems of infectious disease and under-nutrition, at the same time they are experiencing a rapid upsurge in chronic disease risk factors such as obesity and overweight, particularly in urban settings.It is not uncommon to find under-nutrition and obesity existing side-by-side within the same country, the same community and even within the same household.This double burden is caused by inadequate pre-natal, infant and young child nutrition followed by exposure to high-fat, energy-dense, micronutrient-poor foods and lack of physical activity.

Award-winning journalist Michael Pollan, commenting in an interview on the problem for America’s poor, notes that basic crops such as corn and soybeans are used to such an extent that many unhealthy and processed foods are created from them, at a subsidized rate, thus contributing to the problem:

Because we subsidize those calories, we end up with a supermarket in which the least healthy calories are the cheapest. And the most healthy calories are the most expensive. That, in the simplest terms, is the root of the obesity epidemic for the poor—because the obesity epidemic is really a class-based problem. It’s not an epidemic, really. The biggest prediction of obesity is income.

— Blair Golson, America’s Eating Disorder, Alternet.org, April 19, 2006

Pollan and bestseller Eric Schlosser also released a documentary film, Food Inc, that looks into the effects of subsidizing unhealthy practices, further. Schlosser’s bestselling book, Fast Food Nation is also discussed on this site’s section on beef.

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Health impacts

With obesity comes increasing risks of

Cardiovascular disease (mainly heart disease and stroke) — already the world’s number one cause of death, killing 17 million people each year.Diabetes (type 2) — which has rapidly become a global epidemic.Musculoskeletal disorders — especially osteoarthritis.Some cancers (endometrial, breast, and colon).

In addition, childhood obesity is associated with a higher chance of premature death and disability in adulthood.

The WHO adds, “What is not widely known is that the risk of health problems starts when someone is only very slightly overweight, and that the likelihood of problems increases as someone becomes more and more overweight. Many of these conditions cause long-term suffering for individuals and families. In addition, the costs for the health care system can be extremely high.”

In Europe, for example, the WHO’s European regional body says that “obesity is already responsible for 2-8% of health costs and 10-13% of deaths in different parts of the Region.”

(See the obesity and overweight facts and What are the health consequences of being overweight?, both by the WHO, for more details.)

In Britain for example, a Centre for Food Policy and Thames Valley University report, titled Why health is the key for the future of farming and food (January 2002) says that despite food scandals getting headlines, far more people are affected by diet-related diseases such as cardiovascular disease, cancer, diabetes and nutritional deficiencies than diarrhoeal diseases (salmonella, campylobacter, etc) — some 35% compared to 0.2%.

As the report says bluntly, “food safety may scandalise the country and attract political attention, but it is the routine premature death by degenerative disease that extracts the greater ill-health toll” (p.15).

This phenomena is seen in many rich nations, though Britain comes out worse than most on many such indicators (p.16).

The report further highlights that the costs of coronary heart disease alone are around £10 billion a year (approximately 14 billion in U.S. dollars). These costs are made up of

£1.6 billion in direct costs (primarily to the tax payer through the costs of treatment by the British National Health Service) and£8.4 billion in indirect costs (to industry and to society as a whole, though loss of productivity due to death and disability). (p. 38)

Other issues and problems they point out include:

Encouraging/advertising unhealthy diets and foods (especially to children);Generally putting low priority on health;Industry-dominated food policy at the expense of local grocery stores;Deteriorating health of children in poverty;and so on.

The report however, does not include costs from the effects of wider industrial agricultural policies that have given rise to BSE, Foot and Mouth disease, or the cost to the environment, etc.

New York Times food writer Mark Bittman summarizes how this is a global issue because over-consumption and over-industrialized-production of unhealthy foods is also putting the entire planet at risk:

Mark Bittman on what's wrong with what we eat, TED Talks, May 2008

Experts believe that obesity is responsible for more ill health even than smoking, the BBC has noted, which ties in with the World Watch quotation above about health costs for obesity in the U.S. exceeding those associated with smoking.

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Various causes of obesity

Taking a more global view, the prestigious British Medical Journal (BMJ) looks at various attempts to tackle obesity and notes that obesity is caused by a complex and multitude of inter-related causes, “fuelled by economic and psychosocial factors as well as increased availability of energy dense food and reduced physical activity.”

The authors broke down the causes into the following areas:

Food systems causes of obesity

The main problem has been the increased availability of high energy food, because of:

Liberalized international food marketsFood subsidies that “have arguably distorted the food supply in favour of less healthy foodstuffs”“Transnational food companies [that] have flooded the global market with cheap to produce, energy dense, nutrient empty foods”“Supermarkets and food service chains [that are] encouraging bulk purchases, convenience foods, and supersized portions”Healthy eating often being more expensive than less healthy options, (despite global food prices having dropped on average).Marketing, especially “food advertising through television [which] aims to persuade individuals—particularly children—that they desire foods high in saturated fats, sugars, and salt.”The local environment and obesity

How people live, what factors make them active or sedentary are also a factor. For exapmle,

“Research, mainly in high income countries, indicates that local urban planning and design can influence weight in several ways.”For example, levels of physical activity are affected byConnected streets and the ability to walk from place to placeProvision of and access to local public facilities and spaces for recreation and playThe increasing reliance on cars leads to physical inactivity, and while a long-time problem in rich countries, is a growing problem in developing countries.Social conditions and obesity

Examples of issues the BMJ noted here include

“Working and living conditions, such as having enough money for a healthy standard of living, underpin compliance with national health guidelines”“Increasingly less job control, security, flexibility of working hours, and access to paid family leave … undermining the material and psychosocial resources necessary for empowering individuals and communities to make healthy living choices.”Inequality, which can lead to different groups being disadvantaged and having less access to needed resources and healthier foodsBack to top

Addressing Obesity Globally, Nationally, Locally, Individually

British celebrity-chef-turned-food-activist, Jamie Oliver, recently won the prestigious TED Prize for his campaigning in the UK to fight obesity. His “wish” that the TED Prize speech asks him to share was to “help to create a strong, sustainable movement to educate every child about food, inspire families to cook again and empower people everywhere to fight obesity.” He explained this in his video:

Jamie Oliver’s TED Prize wish: Teach every child about food, TED, February 2010

Given the complex, inter-related causes of obesity, addressing it also requires a multi-pronged approach:

Dealing with inequalities in obesity requires a different policy agenda from the one currently being promoted. Action is needed that is grounded in principles of health equity.

…

Missing in most obesity prevention strategies is the recognition that obesity—and its unequal distribution—is the consequence of a complex system that is shaped by how society organises its affairs. Action must tackle the inequities in this system, aiming to ensure an equitable distribution of ample and nutritious global and national food supplies; built environments that lend themselves to easy access and uptake of healthier options by all; and living and working conditions that produce more equal material and psychosocial resources between and within social groups. This will require action at global, national, and local levels.

— Sharon Friel, Mickey Chopra, David Satcher, Unequal weight: equity oriented policy responses to the global obesity epidemic, British Medical Journal, Volume 335, December 15, 2007, pp. 1241-1243

The BMJ criticizes traditional methods to address obesity as typically trying to change individual’s behavior. While important, on its own, they feel it is not sufficient; there is “limited evidence for sustainability [of this direct approach] and transferability to other settings,” for example.

Furthermore, “the recent UK Foresight Report makes clear the complexity of drivers that produce obesity; it highlights that most are societal issues and therefore require societal responses.”

The BMJ therefore describes some examples of initiatives at these various levels:

Addressing obesity at the global level

This involves international institutions, agreements, trade and other policies. For example,

The World Health Organization (WHO) is a key institution at this level. It’s global strategy in this area focuses on developing food and agricultural policies that are aligned to promoting public health and multisectorial policies that promote physical activity, as well as generally being an information provider.A joint program of the United Nations Food and Agriculture Organization and the World Health Organization, the experience of the Codex Alimentarius Commission highlights the challenges at international level. The Commission was set up to help governments protect the health of consumers and ensure fair trade practices in the food trade.But challenges and obstacles persist. For example, “industry representatives hugely outnumber representatives from public interest groups, resulting in an imbalance between the goals of trade and consumer protection.”

In addition,

“Ensuring that global food marketing does not target vulnerable societies” the BMJ feels there needs to be “binding international codes of practice related to production and marketing of healthy food, supported at the national level by policy and regulation.”This is preferred over voluntary guidelines, typical of the industry’s response to threats of regulation, because such responses “may result in differential uptake by better-off individuals or institutions and provides little opportunity for public and private sector accountability.” (Emphasis added)For example, “regulating television advertising of foods high in fat or sugar to children is a highly cost effective upstream intervention.” (This is also discussed in more detail on this site’s section on Children as Consumers.)Addressing obesity at the national level

National policies typically aimed at healthier food production include targeted and appropriate domestic subsidies. For example,

“Norway successfully reversed the population shift towards high fat, energy dense diets by using a combination of food subsidies, price manipulation, retail regulations, clear nutrition labelling, and public education focused on individuals.”Mauritius relatively successful program includes price policy, agricultural policy, and widespread educational activity in various settings.

Ireland is an example of the also-needed multi-agency approach with their Healthy Food for All initiative seeking to promote access, availability, and affordability of healthy food for low income groups.

Addressing obesity at the local level

Examples of local level action the BMJ mentioned include

The success of the Brazilian population-wide Agita Sao Paulo physical activity program which “successfully reduced the level of physical inactivity in the general population by using a multi-strategy approach of building pathways; widening paths and removing obstacles; building walking or running tracks with shadow and hydration points; maintaining green areas and leisure spaces; having bicycle storage close to public transport stations and at entrances of schools and workplaces; and implementing private and public incentive policies for mass active transport.”The London Development Agency plans to establish a sustainable food distribution hub to supply independent food retailers and restaurants.

However, a key challenge they note is the “lack of systematic evaluation of initiatives, particularly with an equity focus, [which] makes it difficult to generalize policy solutions in this field.”

So while there are many measures possible at many levels, a cultural shift in attitude is needed.

The benefits of a healthier diet is obvious. Yet, as Dr. Dean Ornish, a clinical professor and founder of the Preventive Medicine Research Institute, explains, the large number of cardiovascular diseases that kill so many around the world is not only preventable, but reversible, often by simply changing our diets and lifestyle:

Dean Ornish on the world’s killer diet, TED Talks, December 2006

Another BMJ article notes in a prognosis in obesity that we need to move a little more and eat a little less:

New economic analyses help dispel the myth of people getting fatter but eating less. The first 20 years of our adult obesity epidemic, from the 1970s to 1990s, was explained mainly by declining physical activity: Americans believe they have less time to do things but in reality are spending more time watching television and being inactive. Subsequently, the obesity epidemic appears to have been fuelled by largely increased food consumption. A paradoxical increase and deregulation of appetite during inactivity has been matched by an increasing supply of food at lower real cost. Consumption of “supersize” food portions will accelerate this process, reflecting a failure of the free market that demands government intervention.

— Professor M E J Lean, Prognosis in obesity; we all need to move a little more, eat a little less, British Medical Journal, Volume 330, 11 June 2005, p.1339

Award-winning journalist Michael Pollan argues in an interview that not only is what you eat important, but how you eat, as well:

At the end of the industrial food chain, you need an industrial eater. What you eat, and how you eat are equally important issues. There is a lot of talk and interesting comparisons drawn between us and the French on the subject of food. We’re kind of mystified that they can eat such seemingly toxic substances—triple crème cheeses and foie gras, and they're actually healthier than we are.

They live a little bit longer, they have less obesity, less heart disease. What gives? Well, according to the people who study this: It’s not what they eat, it’s how they eat it. They eat smaller portions; they do not snack as a rule; they do not eat alone. When you eat alone, you tend to eat more. When you’re eating with someone there’s a conversation going on, there’s a sense of propriety; you don’t pig out when you’re eating at a table with other people.

So the French show you can eat just about whatever you want, as long as you do it in moderation. That strikes me as a liberating message. But it’s not the way we do things here. We have a food system here that is all about quantity, rather than quality. So how you eat is very, very important, and to solve the obesity and the diabetes issue in this country, we’re going to have change the way we eat, as well as what we eat.

— Blair Golson, America’s Eating Disorder, Alternet.org, April 19, 2006

Perhaps a more bizarre suggestion in UK has been by a doctor (or scientist — I heard this on the radio and did not have time to get the exact details) who suggested that McDonald’s should narrow their doors so that fat people cannot get in. Maybe this hints at how extreme the problem might be for a medical doctor to be so extreme in a possible solution, as there are problems with this type of suggestion. For example,

This sounds like an extremist and reactionary measure to deal with the issue, and raises concerns about rights of individuals to make their own choices.Furthermore, it could lead to a form of prejudice and hostility towards certain types of people.More effective could be to address the deeper issues discussed further above and below.For example, the fast food industry is not effectively charged for their contribution to environmental destruction around the world, or even their indirect contribution to world hunger by making poor people grow food for export rather than to feed themselves. (See this site’s section on beef, and hunger for more on these aspects.)These examples just touch the surface, but these all add up to hidden costs for society but savings for the fast food companies.Pricing beef, for example, based on true cost of production would make these inefficient and unhealthy foods more expensive, and a deterrent for the majority of people, who might turn to healthier options (though this itself isn’t an automatic given).

But the underlying concern of the doctor is still important. At the end of April 2004, the British government urged the public to exercise five times a week. Levels of physical activity among the general population have fallen significantly over the past 25 years the government had also noted. Compelling scientific evidence shows that more active people are less likely to become obese and develop heart disease.

Another major determinant in people’s preferences and habits, especially in a consumer society, is marketing.

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Healthy versus Unhealthy Food Marketing; Who Usually Wins?

Of course, obesity is not an easy challenge to overcome, as today’s commercial markets include a very wide variety of foods that are unhealthy, but attractively marketed to kids, as also mentioned in the children section. And many resources are deployed to support that industry. This is another example of hidden “waste”.

Soaring diabetes rates are inextricably tied to the global obesity epidemic, as Inter Press Service (IPS) notes. Yet, the political will to be able to change certain cultural habits and to take on powerful industries promoting such habits that lead to these problems, is where the challenge lies.

In theory were it not for these political and cultural challenges, the cost of addressing the problem could be quite low (regular exercise, sensible eating habits, for example). But, “There is not enough resolve to take on these monster industries and to force changes that will make our environment promote healthy rather than unhealthy choices when it comes to food and physical activity” says Dr. David Schlundt, a psychology professor at the Diabetes Center of Vanderbilt University in Tennessee state, in that IPS article.

“The WHO [World Health Organisation] is basically powerless to do anything about the problem other than draw attention to it and perhaps develop some recommendations that will be very difficult for governments to implement” Schlundt also notes.

Talk of banning ads to kids met with resistance from industry

As a small example, in November 2003, another UK government member of Parliament had suggested a bill to ban TV ads promoting food and drink high in fat, salt and sugar aimed at young children. This received a lot of support as well, as groups and other members of Parliament felt that self-governing by the industry was not working. However, the bill didn’t get anywhere due to lack of time although it is repeatedly being called for.

The BBC noted in March 2004 that “over 100 of the UK’s leading health and consumer groups have urged the government to ban junk food ads, saying they are fueling rising rates of obesity.” Some of these groups are leading medical and related organizations in Britain.

However, as the BBC also noted, a UK government minister said she was skeptical about the merits of banning junk food ads and, in concert with what the food and drink industry said, “sound science” was needed to ensure that this was indeed a major cause of health problems. Encouraging healthier living and eating would be better it was noted.

Ironically, it is the food and drink industry that has the advertising muscle and clout, and, as a campaigner from one of the groups commented, “Huge profits are at stake, so we don’t believe that they will voluntarily stop promoting junk foods to kids. For the sake of children’s health, statutory controls are urgently required.”

As also mentioned on this site’s section on Children as Consumers, industry raises fears that ad bans will result in job losses, but also a loss in quality programming for children, because those ads fund programs.

Industry attempts at self-regulation not working, sometimes reversing

Many groups have long been raising urgent concerns because a conservative estimate from experts suggests that over 40% of the UK population could become obese within a generation. The food and drink industry are on the defensive because of the potential loss in sales. As a result, they tend to suggest blaming the individual; it is the individual’s choice at the end of the day. However, while true, advertising is so much part of culture that it would be overly simplistic to say ads do not have an effect and that it is only through exercise and personal discipline that these issues can be overcome. Furthermore, if it is individual choice, then food companies would not need to market and create perceived food needs; the necessity to eat would be enough to drive the market.

Side Note

Oversimplifying a bit,

Were it not for advertising, how would companies including those in the food and drink industry advertise their products? (See for example, the sugar and beef sections later on this site on how luxury products were turned into almost unhealthy “necessities”.)Furthermore, how would the unhealthy food and drinks become so popular when parents — the other major influence — would typically discourage excessive unhealthy eating and drinking?But, saying that, with parents themselves having grown up with these same advertising influences, they can indirectly or directly encourage more unhealthy eating for their children.With the health services typically under strain, the resources to counter-advertise effectively, is limited.In that context, then, while an important aspect, blaming the individual and parents alone does not address all the issues and influences.

The above example about pressure to ban advertising and the associated skepticism on its merits comes from the UK. In the US, industry has offered to self regulate. However, it looks as though pledges to reduce junk food advertising have not been met:

As detailed further on this site’s section on children and consumption, a number of food companies in the US said they would volunteer to cut ads directed towards children, as reported by the International Herald Tribune (December 11, 2007). The companies, Coca-Cola, Groupe Danone, Burger King, General Mills, Kellogg, Kraft Foods, Mars, Nestlé, PepsiCo, Ferrero and Unilever, “agreed not to advertise food and beverages on television programs, Web sites or in print media where children under age 12 could be considered a target audience, except for products that met specific nutrition criteria.”

However, 3 years on from the above announcement, The Food Advertising to Children and Teens Score (FACTS) — an organization developed by Yale University’s Rudd Center for Food Policy and Obesity to scientifically measure food marketing to youth — found that some of the pledges to reduce marketing had actually reversed.

It found that “the fast food industry continues to relentlessly market to youth.” For example,

The average preschooler (2-5) sees almost three ads per day for fast food; children (6-11) see three-and-a-half; and teens see almost five.Children’s exposure to fast food TV ads is increasing, even for ads from companies who have pledged to reduce unhealthy marketing to children.Children see more than just ads intended for kids. More than 60% of fast food ads viewed by children (2-11) were for foods other than kids’ meals.

Some $4.2 billion was spent in 2009, a fifth of which was by McDonald’s alone. TV accounted for the bulk of the advertising (86%) though Internet marketing was increasing. (See p.51 of their main report, Evaluating Fast Food Nutrition and Marketing to Youth (November 2010), for the details)

The organization suggested changing the industry-defined definition of television programs that require restrictions on the type of advertising aimed at children. Rather than restrictions only applying when the program is created solely for children, it wants a broader standard, such as the total number of children that watch a program. That would extend the reach of child friendly advertising guidelines to such broadly popular shows as American Idol and Glee. (See p.14 of the report)

Taxing junk food; a popular idea, but realistic?

If media regulation is proving challenging, then other ideas may too, such as some notion of tax on junk foods. The industry will of course be against such measures, instead preferring things like exercise and individual responsibility instead (though an individual — often poor on time — versus professional marketing usually suggests an imbalance in available information and decision-making).

Some studies suggest that economic instruments (such as price rises or taxation) of unhealthy foods might have an effect, but it is not guaranteed. For example,

This review found no direct scientific evidence of a causal relationship between policy-related economic instruments and food consumption, including foods high in saturated fats. Indirect evidence suggests that such a causal relationship is plausible, though it remains to be demonstrated by rigorous studies in community settings.

— C. Goodman, A. Anise, What is known about the effectiveness of economic instruments to reduce consumption of foods high in saturated fats and other energy-dense foods for preventing and treating obesity?, Health Evidence Network, World Health Organisation, July 2006

In mid-November, 2010, the BBC’s Panorama explored this notion of “taxing the fat”, saying that Britain is the fattest nation in Europe, and wondered whether it was time to consider such a tax as it may help the National Health Service afford the various costs associated with this problem.

The documentary also went to Denmark — the first country in the world to implement such a tax — to see how it was working there, and to the US, where it explained how a proposal to tax sugary drinks like Coca Cola has met with fierce opposition.

It found that there were signs of young people losing weight in the already heavily taxed Denmark, although older adults were still gaining weight.

One potential use of the tax would be to subsidize healthier foods such as fruits and vegetables. But, a potential problem with taxing junk food is that many fruits and other healthy ingredients are often used in unhealthy foods such as sweets and sugary drinks, and even cosmetics and other products such as shampoos. So how can you ensure the tax proceeds are used appropriately?)

The documentary also implied that the current UK Health Secretary wasn’t keen on the idea and that his view was in line with the fast food industry, as targets and other measures may be lowered, as well as funding for current health campaigns for more active lives.

Exercise and individual responsibility has been the food industry’s preferred alternative to regulation (it avoids extra costs on the industry, which industry representatives claim would cost jobs and competitiveness, and while it transfers extra burden and cost onto consumers, they are often ready to sell more in relation to that as described further below).

However, the documentary also noted that more and more studies are showing that while both diet and exercise are crucial to healthy lives, the balance isn’t necessarily 50-50. Instead, diet appears to have a much larger bearing on people’s health and obesity. In addition, the numerous amounts of calories now available in fast foods are so high that the levels of exercise needed to burn the excess off is immense. Many people wouldn’t have that time.

And possibly as an example of a more bizarre sounding use of resources to get children to become more active, in Britain, a chocolate company was promoting sports equipment in return for vouchers and coupons from chocolate bars. The more you ate, the more sports equipment you would get, presumably to burn off the excesses eaten! The UK’s Food Commission called this “absurd and contradictory” and pointed out that if children consumed all the promotional chocolate bars they would eat nearly two million kilos of fat and more than 36 billion calories.

The BBC, reporting on this (April 29, 2003), commented the following, amongst other things:

One set of posts and nets for volleyball would require tokens from 5,440 bars of chocolateThis would require spending £2,000 (about $3,500) on chocolate and wolfing their way through 1.25 million calories, some 2 million kilos of fat.A basketball would be 170 bars of chocolate, which, if it were to be burned off, a 10-year-old child would need to play for 90 hours.

While the confectionary companies suggested that children were going to eat these anyway, others raised concerns that this is promoting more unhealthy eating. The chairman of the UK government’s obesity task force, Professor Phil James, said: “This is a classic example of how the food and soft drink industry are failing to take on board that they are major contributors to obesity problems throughout the world. They always try to divert attention to physical activity.”

What is more, as most British media outlets also highlighted, then Minister for Sport, Richard Caborn, endorsed it.

But this is not the only example. For years, other companies have linked their foods to such schemes for educational or sports equipment for schools. What they get for selling this is branding and future consumers.

This has also been an example of controversial school commercialization which was unanimously condemned at a large teachers union conference in England around the same time.

This site’s section on Children as Consumers also notes that towards the end of 2007, additional efforts started in the UK to understand the effect of advertising on children. It also has more details on efforts to address issues related to obesity and the challenge parents (often the ones who are blamed) when going up against marketers.

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This is another example of how this can have all sorts of knock-on effects to society and to resource requirements to deal with these issues. And that results in further expenditure and use of resources which, from this perspective, can be seen as costly and wasteful.

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Global Arms Sales Decreases in 2009 compared to 2008

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The world spends some $1,000 billion annually on the military. How is this so?

This web page has the following sub-sections:

World Military Spending Out Does Anything ElseArms sales figuresGlobal Arms Sales By Supplier NationsGlobal Arms Sales Trends 2002-2009Developing nations are top recipientsWhat is sold?As world trade globalizes, so does the trade in armsHidden Corporate Welfare?Arms Trade Post September 11, 2001It does not seem to matter who arms are sold toThe arms trade is corruptGeopolitical and Economic AgendasGovernment Military Budgets and SpendingWorld Military Spending Out Does Anything Else

As detailed further on the next page on military expenditure, world military spending has now reached one trillion dollars, close to Cold War levels.

As summarized from the Military Balance, 2000/2001, by the International Institute for Strategic Studies (October 2001), for the larger arms-purchasing nations each year:

Arms procurement is normally 20-30% of their military budgetsThe main portion is usually on operations, maintenance and personnelSome 40 to 50 billion dollars are in actual deliveries, (that is, the delivery of sales, which can be many years after the initial contract is signed)Each year, around 30-35 billion dollars are made in actual sales (agreements, or signing of contracts).

In more recent years, annual sales of arms have risen to around $50-60 billion.

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Arms sales figures

Every year, the U.S. Congressional Research Service releases a report looking at arms transfers to the developing world.

The latest report (as of writing), released September 10, 2010, is titled Conventional Arms Transfers to Developing Nations, 2002-2009 .

These reports are also known as the Grimmett Report, after the author, Richard F. Grimmett. They provide insight into where the arms are going. The following breakdowns are based on this report.

Note about the data

The report typically follows the trends of major arms suppliers, but as was noted in the 2007 Grimmett Report , there has been an increase in participation of other non-traditional suppliers, such as Israel, Spain, Sweden and Ukraine. While some general data are provided on worldwide conventional arms transfers by all suppliers, “The principal focus of this report is the level of arms transfers by major weapons suppliers” and in addition, “to nations in the developing world — where most of the potential for the outbreak of regional military conflicts currently exists.”

The earlier 2006 Grimmett report also explained that, “These [non-major] arms suppliers also are more likely to be sources of small arms and light weapons, and associated ordnance, rather than routine sellers of major military equipment. Most of these arms suppliers are not likely to consistently rank with the traditional major suppliers of advanced weaponry in the value of their arms agreements and deliveries.” (p. 8)

As such, the breakdowns of suppliers in the Grimmett Reports typically include the major suppliers with non-major suppliers grouped. In a given year, some of the non-major suppliers may sell more than the lower-end major suppliers, but over the longer term the top 5 are fairly consistently from this smaller group of major suppliers.

Global Arms Sales By Supplier Nations

The 5 UN Security Council permanent members are generally the largest arms dealers:

As a bar chartAs a pie chartAs a bar chartArms sales (agreements), by Supplier, 2002-2009 (in billions of constant 2009 U.S. dollars)SupplierTotal Sales in US Dollars (billions)Percent of total sales

Source: Richard F. Grimmett, CRS Report for Congress; Conventional Arms Transfers to Developing Nations, 2002-2009 . September 10, 2010

Notes: Percentages are rounded; Each country shown as follows:

developing countriesindustrialized countriesIf you are viewing this table on another site, please see http://www.globalissues.org/article/74/the-arms-trade-is-big-business for further details and context.

United States166.27840%Russia73.96518%France35.1758%United Kingdom29.3797%China13.6523%Germany19.7425%Italy12.5313%Other European43.75210%Others22.4595%As a pie chart

Get the Flash Player to see this data as a pie chart.

Global Arms Sales Trends 2002-2009

Developing countries are the main recipients of arms sales:

As a ChartRaw dataAs a Chart

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Raw dataArms sales (agreements), 2002 to 2009, (in billions of constant 2009 U.S. dollars)YearTotal DollarsPercentage of total

Source: Richard F. Grimmett, CRS Report for Congress; Conventional Arms Transfers to Developing Nations, 2002-2009 . September 10, 2010

Notes: Percentages are rounded; Each country shown as follows:

developing countriesindustrialized countriesIf you are viewing this table on another site, please see http://www.globalissues.org/article/74/the-arms-trade-is-big-business for further details and context.

200235.1019%200336.9249%200449.21612%200551.14813%200660.91215%200763.27116%200862.83816%200957.5114%Developing nations are top recipients

The Grimmett Report also notes that,

Developing nations continue to be the primary focus of foreign arms sales activity by weapons suppliers.Despite the global economic climate, major purchases continue to be made by a select few developing nations in these regions, principally China and India in Asia, and Saudi Arabia in the Middle East.Saudi Arabia and India’s large spending reflects their modernization efforts since the 1990s.The strength of individual economies of a wide range of nations in the developing world continues to be a significant factor in the timing of many of their arms purchasing decisions.Increases in the price of oil, while an advantage for major oil producing states in funding their arms purchases, has, simultaneously, caused economic difficulties for many oil consuming states, contributing to their decisions to curtail or defer new weapons acquisitions.A number of less affluent developing nations have chosen to upgrade while reducing new purchases.

Just ten developing nation recipients of arms sales accounted for 59% of the total developing nations arms market between 2002 and 2009:

As a ChartRaw dataAs a Chart

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Raw dataArms sales (agreements) by the Leading Recipient Developing Nations, 2002-2009 (in billions of current U.S. dollars)RankCountryAmount spentPercent of total

Source: Richard F. Grimmett, CRS Report for Congress; Conventional Arms Transfers to Developing Nations, 2002-2009 . September 10, 2010

Note: Percentages are approximate.

If you are viewing this table on another site, please see http://www.globalissues.org/article/74/the-arms-trade-is-big-business for further details and context.

1Saudi Arabia 39.914%2India 32.411%3UAE 17.36%4Egypt 13.95%5Venezuela 12.74%6Pakistan 12.54%7China 11.74%8South Korea 9.83%9Brazil 8.63%10Iraq 8.13%11All other developing countries 117.71741%What is sold?

The Grimmett Report describes items counted in the weapons categories as follows:

Tanks and Self-propelled Guns:This category includes light, medium, and heavy tanks; self-propelled artillery; self-propelled assault guns.Artillery:This category includes field and air defense artillery, mortars, rocket launchers and recoilless rifles — 100 mm and over; FROG launchers — 100mm and over.Armored Personnel Carriers (APCs) and Armored Cars:This category includes personnel carriers, armored and amphibious; armored infantry fighting vehicles; armored reconnaissance and command vehicles.Major Surface Combatants:This category includes aircraft carriers, cruisers, destroyers, frigates.Minor Surface Combatants:This category includes minesweepers, subchasers, motor torpedo boats, patrol craft, motor gunboats.Submarines:This category includes all submarines, including midget submarines.Guided Missile Patrol Boats:This category includes all boats in this class.Supersonic Combat Aircraft:This category includes all fighter and bomber aircraft designed to function operationally at speeds above Mach 1.Subsonic Combat Aircraft:This category includes all fighter and bomber aircraft designed to function operationally at speeds below Mach 1.Other Aircraft:This category includes all other fixed-wing aircraft, including trainers, transports, reconnaissance aircraft, and communications/utility aircraft.Helicopters:This category includes all helicopters, including combat and transport.Surface-to-air Missiles:This category includes all ground-based air defense missiles.Surface-to-surface Missiles:This category includes all surface-surface missiles without regard to range, such as Scuds and CSS-2s. It excludes all anti-tank missiles. It also excludes all anti-ship missiles, which are counted in a separate listing.Anti-ship Missiles:This category includes all missiles in this class such as the Harpoon, Silkworm, Styx and Exocet.

— Richard F. Grimmett, Conventional Arms Transfers to Developing Nations, 2002-2009 , A Congressional Research Service Report for Congress, September 10, 2010, p.86

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As world trade globalizes, so does the trade in arms

Control Arms is a campaign jointly run by Amnesty International, International Action Network on Small Arms (IANSA) and Oxfam. In a detailed report titled, Shattered Lives, they highlight that arms are fueling poverty and suffering, and is also out of control. In addition,

The lack of arms controls allows some to profit from the misery of others.

While international attention is focused on the need to control weapons of mass destruction, the trade in conventional weapons continues to operate in a legal and moral vacuum.More and more countries are starting to produce small arms, many with little ability or will to regulate their use.Permanent UN Security Council members—the USA, UK, France, Russia, and China—dominate the world trade in arms.Most national arms controls are riddled with loopholes or barely enforced.Key weaknesses are lax controls on the brokering, licensed production, and 'end use' of arms.Arms get into the wrong hands through weak controls on firearm ownership, weapons management, and misuse by authorised users of weapons.

— The Arms Bazaar, Shattered Lives, Chapter 4, p. 54, Control Arms Campaign, October 2003

The top five countries profiting from the arms trade are the five permanent members of the United Nations Security Council: the USA, UK, France, Russia, and China.

From 1998 to 2001, the USA, the UK, and France earned more income from arms sales to developing countries than they gave in aid.

The arms industry is unlike any other. It operates without regulation. It suffers from widespread corruption and bribes. And it makes its profits on the back of machines designed to kill and maim human beings.

So who profits most from this murderous trade? The five permanent members of the UN Security Council—the USA, UK, France, Russia, and China. Together, they are responsible for eighty eight per cent of reported conventional arms exports.

“We can’t have it both ways. We can’t be both the world’s leading champion of peace and the world’s leading supplier of arms.” Former US President Jimmy Carter, presidential campaign, 1976

— The Arms Industry, Control Arms Campaign, October 2003

The third world is often the destination for arms sales as the Control Arms Campaign also highlights graphically:

Source: http://www.controlarms.org/the_issues/movers_shakers.htm© Control Arms Campaign

In order to make up for a lack of sales from domestic and traditional markets for military equipment, newer markets are being created or sought after. This is vital for the arms corporations and contractors in order to stay afloat.

Respect for human rights is often overlooked as arms are sold to known human rights violators.

Heavy militarization of a region increases the risk of oppression on local people. Consequently reactions and uprisings from those oppressed may also be violent. The Middle East is a current example, while Latin America is an example from previous decades, where in both cases, democracies or popular regimes have (or had) been overthrown with foreign assistance, and replaced with corrupt dictators or monarchs. Oppression (often violent) and authoritarianism rule has resulted. Sometimes this also itself results in terrorist reactions that lash out at other innocent people.

A deeper cycle of violence results. The arms trade may not always be a root cause, because there are often various geopolitical interests etc. However, the sale of arms can be a significant contributor to problems because of the enormous impact of the weapons involved. Furthermore, some oppressive regimes are only too willing purchase more arms under the pretext of their own war against terrorism.

In quoting a major international body, six basic points harshly criticizing the practices and impacts of the arms industry are listed below, by J.W. Smith:

That the armament firms have been active in fomenting war scares and in persuading their countries to adopt warlike policies and to increase their armaments.That armament firms have attempted to bribe government officials, both at home and abroad.That armament firms have disseminated false reports concerning the military and naval programs ofvarious countries, in order to stimulate armament expenditure.That armament firms have sought to influence public opinion through the control of newspapers in their own and foreign countries.That armament firms have organized international armament rings through which the armament race has been accentuated by playing off one country against another.That armament firms have organized international armament trusts which have increased the price of armaments sold to governments.

— J.W. Smith, The World's Wasted Wealth II, (Institute for Economic Democracy, 1994), p. 224

But, this was not of the arms industry of today. Smith was quoting the League of Nations after World War I, when “Stung by the horrors of World War I, world leaders realized that arms merchants had a hand in creating both the climate of fear and the resulting disaster itself.”. And unfortunately, it also summarizes some of the problems of today, too. Justification for arms and creating the market for arms expenditure is not a new concept. The call to war and fear-mongering is an old tradition.

This rush to globalize arms production and sales ignores the grave humanitarian and strategic consequences of global weapons proliferation. Already, profit motives in the military industry have resulted in arms export decisions that contravene such U.S. foreign policy goals as preserving stability and promoting human rights and democracy.

— Globalized Weaponry, Foreign Policy In Focus, Volume 5, Number 16, June 2000

Hidden Corporate Welfare?

Industrialized countries negotiate free trade and investment agreements with other countries, but exempt military spending from the liberalizing demands of the agreement. Since only the wealthy countries can afford to devote billions on military spending, they will always be able to give their corporations hidden subsidies through defence contracts, and maintain a technologically advanced industrial capacity.

And so, in every international trade and investment agreement one will find a clause which exempts government programs and policies deemed vital for national security. Here is the loophole that allows the maintenance of corporate subsidies through virtually unlimited military spending.

— Stephen Staples, Confronting the Military-Corporate Complex, presented at the Hague Appeal for Peace, The Hague, May 12th 1999.

Vast government subsidies are sought after in the pursuit of arms trading.

US and European corporations receive enormous tax breaks and even lend money to other countries to purchase weapons from them. Therefore tax payers from these countries end up often unknowingly subsidizing arms sales.

While there are countless examples, a recent one that made a few news headlines was how Lockheed managed to get US subsidies to help sell a lot of fighter planes to Poland at the end of 2002/beginning of 2003. This was described as the biggest deal ever in Europe at that time.

Arms Trade Post September 11, 2001

To counter the horrific act of terrorism in the United States, on September 11, 2001, George Bush has started a War on Terrorism. However, Human Rights Watch has argued that in the pursuit of military policies which include selling arms or providing assistance to other countries, the U.S. has “expressed minimal concern about the potential side effects”. That is, the increase in militarism itself is risking both the restriction of people’s rights, and the entrenching of power of those who violate human rights.

See also Post Sept. 11 Arms Sales and Military Aid Demonstrate Dangerous Trend from the Washington D.C.-based Center for Defense Information. They list a compilation of post-Sept. 11 pending and approved U.S. arms sales. One concerning trend that the Center raises is that “The United States is more willing than ever to sell or give away weapons to countries that have pledged assistance in the global war on terror.” And in order to do this the United States has revised the list of countries that are ineligible to receive U.S. weapons so that “a significant number of countries … are now receiving military aid that would have been denied before Sept. 11.” Side NotePending and approved sales from other countries are not listed. If such information is known, please let me know, so it can be listed here as well.

In addition, the Federation of American Scientists also raise the issue that U.S. military aid has been justified around the world on the grounds of the war on terror, even though that has at times been a dubious reason. In addition, previous restrictions or conditions for military aid are being “jettisoned”:

The relentless assault on [U.S.] military aid restrictions that began shortly after the September 11th attacks … has continued unabated. This spring the [Bush] administration attempted yet again to win blanket exemptions for aid distributed as part of the “war on terror” by including language in the FY2002 supplemental appropriations bill that waives most existing restrictions and reporting requirements. The administration’s second attempt was more successful. Two key Defense Department funding allocations—$390 million to reimburse nations providing support to U.S. operations in the war on terror and $120 million “for certain classified activities”—can now be delivered “notwithstanding any other provision of the law.” This means there will be none of the normal restrictions placed on this large sum of military aid.

The provision on “classified activities” is especially troubling because it permits “projects not otherwise authorized by law,” in other words, covert actions. Not only is the language in the Supplemental opaque, attempts to get more information from a defense committee staffer led nowhere. He refused to answer questions about the intended use of the funds, the applicability of foreign aid restrictions, and reporting requirements on the grounds that all of that information is “classified.” In other words, there will be no public scrutiny of this aid, and that’s just fine with Congress.

The Bush administration may also be successful in its campaign to ease restrictions on military aid and training to Indonesia despite that country’s utter failure to improve its military’s human rights practices. In May, Defense Secretary Donald Rumsfeld proclaimed that it is “time for [the restrictions] to be adjusted substantially.” If the results of the Senate Appropriations committee mark up are any indicator, Mr. Rumsfeld is likely to get his wish.

… This latest round of military aid has made one thing clear: the U.S. military has found a new excuse to extend its reach around the globe, arming regimes that had previously been blacklisted for human rights abuses, weapons proliferation, or brutal conflict. What remains to be seen is how long Congress and the American public will accept this formula, especially when they see no concrete results in return.

— Military Aid Post September 11th, Arms Sales Monitor, Federation of American Scientists, No. 48, August 2002

Furthermore, Lip Magazine highlights that “the U.S. has sold weapons or training to almost 90% of the countries it has identified as harboring terrorists.”

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It does not seem to matter who arms are sold to

Last year [2000] the U.S. controlled half of the developing world’s arms market…. This dominance of the global arms market is not something in which the American public or policy makers should take pride in. The U.S. routinely sells weapons to undemocratic regimes and gross human rights abusers.

— Uncle Sam World’s Arms Merchant Again; In 2000 U.S. Sells $18.6 Billion Worldwide, $12.6 Billion to Developing Countries, Arms Trade Insider—#53, Arms Trade Oversight Project, Council for a Livable World, August 20, 2001

As mentioned above, the “War on Terror” has seen the U.S. selling weapons or training to almost 90% of the countries it has identified as harboring terrorists. Yet, for decades, a lot of the arms that the West has sold has gone into the hands of military dictatorships or corrupt governments. This can have the additional intention or effect of hampering any form of democracy in those countries.

Sometimes, these arms sales are made secretly and sometimes, arms are sold to human rights violators (such as one third of all sales by the US, in 1998, as the previous link notes).

According to a report, from the Council for a Livable World’s Arms Trade Oversight Project, “[s]ince the end of the Cold War, the United States has been the world’s largest arms dealer … Consequently, governments with some of the worst human rights records [have] received American weapons and training.”

In November 2001, The Center for Defense Information, a military watch-dog in Washington D.C., provided a detailed list of the 18 countries and 28 terrorist groups cited by the U.S. State Department as hotbeds of terrorist activity. Included in the list is a chronology of U.S. arms sales and training from 1990-1999 and information on use of child soldiers by governments and non-state actors in each country. The U.S. supplied arms to a number of these nations:

In the period of 1990-1999, the United States supplied 16 of the 18 countries on the [U.S.] State Department list with arms through the government-to-government sales under the Foreign Military Sales (FMS) program, or through industry contracted Direct Commercial Sales (DCS) programs, or with military assistance. Recipients included Algeria, Iraq, Lebanon, and Sri Lanka …, where, arguably, the risk of diversion is high. In addition, the U.S. military (and the CIA) has trained the forces of many of these 18 countries in U.S. war fighting tactics, in some cases including individuals now involved in terrorism.

— A Risky Business; U.S. Arms Exports To Countries Where Terror Thrives, Center for Defense Information, November 29, 2001

A report from the World Policy Institute released mid-2005 has found that the U.S. is routinely funneling military aid and arms to undemocratic nations. In 2003, for which the most recent data was available at the time,

The United States transferred weaponry to 18 of the 25 countries involved in active conflicts;More than half of the top 25 recipients of U.S. arms transfers in the developing world (13) were defined as undemocratic by the State Department;When countries designated by the State Department’s Human Rights Report to have poor human rights records or serious patterns of abuse are factored in, 20 of the top 25 U.S. arms clients in the developing world in 2003—a full 80%—were either undemocratic regimes or governments with records of major human rights abuses.The arms trade is corrupt

As noted in this site’s section on the arms trade code of conduct, many nations are often against measures to improve transparency of international arms.

Part of that reason might be the benefits involved. The international arms trade is also considered to be one of the three most corrupt businesses in the world, according to Transparency International, the leading global organization monitoring corruption.

Professor Robert Neild of Cambridge University writes extensively about corruption, and notes the following with regards to the arms trade:

The Cold War arms race enhanced the opportunities for corruption in the arms trade…. It is not just the buccaneering arms salesmen of the USA or the méchant French who have resorted to bribery. The leading arms firms in virtually every major arms-producing country have been implicated, including reputable firms from most respectable countries…. Nor have bribes been paid only to buyers in the Third World….

— Robert Neild, Public Corruption; The Dark Side of Social Evolution, (London: Anthem Press, 2002), pp. 139-140, 142

Neild notes how some of the top most people in rich countries, from ministers, to even a prince, have been implicated in such corruption. The end of the Cold War, Neild also observes, has not led to a let up of corruption in the arms trade:

Bribery in the arms trade has not subsided since the end of the Cold War. On the contrary, as military spending has been cut back the arms firms have been seeking markets abroad more fiercely than before…. One recent estimate reckons that in the international arms trade “roughly $2.5 billion a year is paid in bribes, nearly a tenth of turnover.”

…

[With regards to corruption,] the relevant feature of arms trade is that … government ministers, civil servants and military officers have become so intimately involved in the arms export business that they must have been unable to avoid condoning bribery (for example, by turning a blind eye to it), if not encouraging it (for example, by providing advice when serving in embassies overseas about which members of the local hierarchy it was best to approach and how); or obtaining funds from it for the benefit of themselves, or in the case of politicians, for their political party.

The OECD Convention and the new English law against bribing foreigners are steps in the right direction, but its success will depend on how far the exporting countries, led by the United States, manage jointly and sincerely to enforce restraint and deal with such problems as the payment of bribes through foreign subsidiaries. Part of the arms trade is as elusive and rotten as the drugs trade.

— Robert Neild, Public Corruption; The Dark Side of Social Evolution, (London: Anthem Press, 2002), pp. 139-140, 142-143, 195

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Geopolitical and Economic Agendas

With the arms trade, governments and corporations can “cooperate” to meet their different political and economic agendas. The military industrial complexes of the powerful countries also help influence and shape foreign and military policies in a way that enhances their bottom line of profits. For governments though, selling arms can help other geopolitical and strategic interests. Consider, for example, the following:

A number of years ago, the United States had agreed to sell 80 advanced F16s to the United Arab Emirates. The deal was estimated to be around $15 billion. In return, the US was to be able to build military bases there with improved access to the only deep-water port capable of housing carriers in the Persian Gulf. This led to concerns about the resulting stability in the region and the possibility of an arms race this could start with neighbors. It is of course hard to know if subsequent arms purchases in the region has been precisely because of this.Many US weapons are also sold to Turkey. These have been used against the Kurds, in what some have described as the worst human rights violations and ethnic cleansing since the second World War. The US turns a blind eye to these atrocities because they are able to set up bases in such a key geopolitical location, giving access to places in the Middle East, and because Turkey could be one of the main receivers of oil headed to Western countries, from the Caspian sea.There are also many arms trade-related interests in the Middle East. By having pro-US monarchies and other regimes (not necessarily democracies) at the helm and promoting policies that often ignore democracy and human rights, arms deals are often lucrative and help continue US foreign policy objectives.The British arms manufacturer, BAE was being investigated for bribing Saudi officials to buy fighter planes, but the government intervened in the investigation citing national interests. The Guardian also reported that BAE gave a Saudi prince a £75 airliner ($150m approx) as part of a British arms deal, with the arms firm paying the expenses of flying it. This seemingly large figure is small compared to the overall deal, but very enticing for the deal makers, and it is easy to see how corruption is so possible when large sums are involved.Furthermore, the Middle East is the most militarized region in the world procuring more arms than anywhere else. When combining authoritarian regimes and dictatorships, with arms sellers willing to sell weapons to those regimes, the people of the regions are often repressed, and this is a partial (not the only) explanation for why there is so much fanaticism and extremism. (That is, severe and extreme measures in governance and religion, etc has resulted in counter reactions that are also extremist. The majority of ordinary people that want neither of these extremities are the ones that pay the real price.)

As mentioned later in this web site’s section on arms trade, selling advanced weapons is often accompanied by the same sellers and the military industrial complex pointing out how the new world is getting more dangerous due to an increase in the sophistication of weapons. As a result, they inevitably recommend more research and development to stay ahead! This is a nice circular argument that also serves to keep the military industry in business, largely paid for by the tax payers. The Council for a Livable World’s Arms Trade project shows an example of this, in an article, where the title alone summarizes this situation quite well: U.S. in arms race with itself. The article describes how the U.S. Pentagon allows the U.S. Navy to export its newest jets. As a result, they note that:

A pattern is developing wherein U.S. weapons exports and new weapons procurement are driving each other.

After, and occasionally even before, new weapons roll off the assembly line, they are offered to foreign customers.Each overseas sale of top-line U.S. combat equipment represents an incremental decrease in U.S. military superiority.This gradual decline in military strength spurs politicians, the military and the defense industry to press for higher military spending to procure increasingly sophisticated equipment superior to weapons shipped overseas.This latest technology is again offered to foreign customers, and the cycle begins anew.

— U.S. in arms race with itself, Council for a Livable World, Arms Trade Insider—#51, August 9, 2001 (Text is original, bulleted formatting it mine)

As another example, consider India. Since September 11, 2001, there has been even more volatility in terms of Muslim/Hindu relations, India/Pakistan/Kashmir tensions and other issues. As a result, India is seeking to increase their military spending, while arms dealers are only too willing to help both India and Pakistan. Furthermore, government officials from major arms dealing nations are major actors in attempting to see deals through, as there are obvious political dimensions.

The Financial Times in UK reported (February 27, 2002), that “While the international community calls for restraint on the Indo-Pakistan border, governments led by the UK and the US are jockeying as never before for a bigger slice of India’s growing arms budget.” Further, they also reported that, “Industry officials were unabashed in admitting that the current regional tension between the nuclear-armed neighbors is a unique selling opportunity.” (Emphasis Added).

One could point out that as a business an arms company’s main objective is to make profit so they can remain in business. However, for governments that host these arms industries, it would seem that security issues would be an important part of their foreign policy objective.

In that context then, when even very senior government officials are taking part in procuring contracts, it suggests that while this helps achieve economic objectives of arms firms, it doesn’t really address the issue of achieving political stability or not, or even if it is really a major concern as touted. For sure, it is no easy task for such governments because there can be powerful domestic interests and issues and concerns from related industry and other groups, who can argue that continuing to sell arms will help maintain or even create jobs, etc. (This is discussed in more detail a bit later in this section on propaganda for arms trade).

For example, in reference to India holding so-called talks with various governments on easing India-Pakistan tensions (while pitching for defense contracts), the same Financial Times report also points out that Jack Straw, Britain’s Foreign Secretary, is “also expected to use the opportunity to lobby for a Pounds 1bn (Euros 1.6bn, Dollars 1.43bn) deal to sell BAE Systems Hawk jets to India”. An official of no less stature than Foreign Secretary (somewhat similar to U.S. Secretary of State) is involved in “marketing” for a weapons company.

But it can go even higher than that. Yahoo world news quoted (February 22, 2002), Praful Bidwai, an Indian journalist and commentator who specializes on defense issues who commented on British Prime Minister, Tony Blair, “It’s disgraceful that Blair should have spent more than half his time in India [during his last visit] urging India to buy the jets.” (The sale of jets Bidwai is referring to is 66 British-made hawk jets, at a cost equivalent to US$1.4 billion.)

While public relations departments of such governments can say that their leaders are going on humanitarian or peace missions to urge some nations not to go to war, they are also selling arms at the same time, often to both parties. Geopolitically, this is “divide and conquer” still at work, while economically, this proves beneficial to the armament firms. Corrupt leaders of recipient governments are only too happy to take part as well.

Unfortunately, these are not isolated occurrence (nor is it usually even reported as sensational or questionable), as for a long time, public officials and leaders have been involved in such issues.

As an example of how long this has been going on, consider J.W. Smith’s research:

The forerunners of today’s corporate arms manufacturers (Krupp of Germany, Armstrong and Vickers of England, and others) were originally rejected by their governments and had to depend upon foreign sales for survival. They often furnished arms to both sides in conflicts and even to their own country’s potential enemies. Their practice of warning different countries of the aggressive intentions of their neighbors, who were supposedly arming themselves through purchases of the latest sophisticated weapons, yields a glimpse of the origins of today’s mythical missile gaps.

— J.W. Smith, World’s Wasted Wealth II, (Institute for Economic Democracy, 1994), pp. 223–224

It isn’t just the UK that appears to target each side. The World Policy Institute reports in its 2005 report about U.S. routinely funneling military aid and arms to undemocratic nations that, “As in the case of recent decisions to provide new F-16 fighter planes to Pakistan, while pledging comparable high-tech military hardware to its rival India, U.S. arms sometimes go to both sides in long brewing conflicts, ratcheting up tensions and giving both sides better firepower with which to threaten each other.”

On September 28, 2005, the Guardian reported that Britain “agreed in secret” to expel two Saudis dissidents during a £40 billion (about $70 billion) arms talks. With such massive amounts of money criticism has been raised again that profit comes before people.

And, as J.W. Smith adds,

Centuries of experience in the arms trade have matured into a standard procedure for farming the public treasures through arms sales. As the riches and most powerful country in the world, it is only logical that the United States is where the most money is to be earned procuring and selling arms. With each seasonal arms authorization and appropriation voted on in Congress, there are the predictably cadenced warnings of … dangerous gaps.… It was the recognition of this political control of public (and official) perception that led President Eisenhower to issue his stern warning to the American people in his farewell address: “In the councils of government we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military/industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.”

— J.W. Smith, World’s Wasted Wealth II, (Institute for Economic Democracy, 1994), p.225

A cycle of violence is a real concern. Though the arms trade may not always be a root cause, their impacts are of course significant. Some countries resort to oppression as the way to address problems, and are only too willing to accept new arms. But the arms industry is also willing to help, while some governments may often encourage such regimes to purchase weapons from them, rather than from “competing” nations.

The Stockholm International Peace Research Institute (SIPRI) released a report about wars in 1997 that suggests progress had been made as the conflicts and their impact were less than previous years. But judging by events in recent years, we have a very long way to go before peaceful co-existence is realized and armed conflicts and expenditure are significantly reduced.

The UN has long called for a “creative partnership” with the arms industry saying that such an arrangement would help promote greater transparency, help curb illicit arms trafficking and ensure legitimate use of the purchased weapons. In some respects, this is would be a welcome step forward (as assuming a transition to a real world peace without arms and weapons etc seems highly unlikely, even though it is probably desired by most people.) The U.N. as well as various public groups are in essence pressuring governments of major arms producing and selling countries, to be more responsible and accountable for who arms are sold to and for what purpose.

However, it could be argued that it is under under such rhetoric, combined with the powerful lobbying of the military industries that governments can intentionally or unintentionally end up aiding military industrial complexes more than other governments. As a result, many are concerned that seeking “peace via war” is a questionable foreign policy to say the least. Indeed, military expenditure in major countries seem to be rapidly increasing, as we turn to next.

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Government Military Budgets and Spending

The next page in this section discusses these numbers.

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