10 October 2008 : Daily Telegraph
Iran is evading United Nations sanctions by running a global network of merchants prepared to supply equipment that could be of military use.
By Damien McElroy in Dubai
The global financial crisis is unlikely to have any immediate impact on Western military operations in Iraq and Afghanistan, but analysts say US and European defence budgets face deep long-term cuts.
The allocation of hundreds of billions of dollars from state budgets to bail out banks hit by the credit crunch will make expensive long-term defence projects particularly hard to justify, defence analysts in the United States and Europe say.
But the crisis could strengthen calls for closer defence integration in the European Union to avoid costly duplication of the 27 member states’ limited resources.
“I can’t see defence is going to escape any kind of austerity measures,” said defence economist Mark Stoker of London’s International Institute for Strategic Studies.
“It would be very difficult for any government to justify cutting health and education in favour of, say, building two aircraft carriers and buying a load of planes to stick on them.”
US Defense Secretary Robert Gates predicted last month U.S. military spending would level off in coming years but said he did not expect severe cuts.
Defence analysts said they expected no big change in spending on military operations in Iraq and Afghanistan, billed as part of the war on terror.
“There wouldn’t be an appetite to cut back on the pursuit of an important objective to the United States in the name of near-term economic gain,” said Lieutenant-Colonel Nathan Freier of the Center for Strategic and International Studies think tank in Washington.
But he said spending cuts were likely later on, adding: “You will see downstream impacts on the defence budget on the areas of procurements, research and development, modernisation.”
Whoever wins next month’s US presidential election could find it hard politically to make cuts that undermine the operations in Afghanistan or Iraq, but the crisis may provide an incentive to finish the campaigns there earlier than foreseen.
“I don’t think people are going to be transparent about that. It’s not a winning political argument to say that in order to bail out Wall Street bankers we’d rather accept defeat in an ongoing war,” said Stephen Biddle, Senior Fellow for Defense Policy at the Council on Foreign Relations.
“What is likelier is that other parts of the defence programme not as immediately and directly connected with an ongoing war are going to have a lot more pressure put on them.” The United States spends more on defence than the rest of the world put together — with a base budget of some $500bn submitted for the coming year — and a total of $12bn a month in Iraq and Afghanistan.
The US Navy’s top uniformed officer, Admiral Gary Roughead, said last month the financial crisis would not lead to a “gutting” of the U.S. defence budget but would increase pressure to review big weapons programmes.
Biddle said plans to boost US Army and Marine Corps by 100,000 personnel would be especially difficult to maintain.
The financial crisis is no help to US efforts to persuade European states in the North Atlantic Treaty Organisation to boost defence budgets.
“I don’t know...the impacts, but everything concerns me when it portends possible impacts on budgets or nations’ defence establishments,” NATO’s top operations commander, General John Craddock, said.
French Defence Minister Herve Morin, whose country favours a stronger EU defence capability as a balance to US influence, said last week the crisis showed the EU must pool resources.
Michael Codner, director of Military sciences at London’s Royal United Services Institute, said closer EU defence integration was still a long way off. “But regardless of individual nations’ wishes for autonomy or reluctance to joint a pan-European defence arrangement they could be forced to do so by events,” he said.
“One such event, one could argue, would be if there was an economic decline across Europe.”
