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Shehrbano Khan 15020004 POL 462 Ali Khan December 16, 2013 FINAL PAPER: The Globalisation of the Illicit Arms Trade My country has suffered appallingly from the effects of the uncontrolled arms trade and continues to suffer We dont manufacture these guns, yet they end up in our country, erode our security and have terrible consequences for our development. (Florella Hazeley, Sierra Leone Action Network on Small Arms, 9 July 2006). (Oxfam.org, 2013) The impact of globalization on the illicit trade of arms has posed severe challenges threatening global peace and security and sustainable development. There are domestic as well as global impacts of arms trafficking and armed violence. This paper aims to highlight the crux of the problem, with respect to how globalization has aided arms trafficking and subsequent misuse, coupled with its connection to the wider network of criminal networks. This will be followed by an analysis of the traditional arms producers, the cost to humanity, steps taken in global governance and controls, and recommendations to combat the problem. Finally, the inevitability of the black market and the need for a global treaty to collectively fight the threat will be discussed. Globalised trade needs global controls. Globalization has revolutionized the arms trade completely. Arms companies are now outsourcing production of components, while operating from a number of locations. The problem arises when the weapons are assembled in countries with lax controls on the usage and export of guns. Nearly a third of a million people are killed yearly as a result of armed violence. The loopholes in national controls demonstrate where the problem begins and why action needs to be taken on an international level to manage this globalised trade, an effective International Arms Trade Treaty being the crucial step in this regard.

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The process of globalization has led to increasing political and socio-economic interdependence and has brought about global integration such that capital, persons, ideas and values have diffused across state boundaries. Popular consensus today suggests that globalization has led to the state losing its salience as an institution, its autonomy having been lost to multilateral lending institutions and the emergence of various other social, non-state actors. Globalization has spurred inequality and the polarisation of income, on a global as well as intrasocietal scale, has led to the curtailment of state functions, thereby encouraging privatisation. Deliberate focus is placed on this because while dealing with the illicit arms trade crisis in the context of globalisation, improving state regulatory functions is imperative. Weak states that are incapable of restraining the sale and leakage of firearm surplus and the inadequate protection and inventory surveillance measures such as those in the states of the former Soviet Union and Eastern Europe, are extremely vulnerable. This results in the state losing control over the de facto tools of violence. Forty years ago, it was the Cold War that led to the diffusion of small arms into various regions. Today, there are a multitude of actors with access to arms, ranging from states to guerrilla armies and rising warlords. Coupled with this is the problem of different types of violence based on political, criminal, communal or religious factors being linked to each other through vast networks and the very means to end or bring security are becoming traded commodities themselves. Globalization has reduced the restrictions on the movement of commodities across borders, including stockpiled as well as newly produced weaponry. The expansion of the global market has run parallel to reduced state capacity to oversee and maintain regulation over their borders. Free trade has done away with trade barriers, thus facilitating arms smuggling and trafficking. Arms dealers and brokers are capitalizing on these entrepreneurial opportunities where states are finding it increasingly difficult to police their frontiers. This can be attributed to the fact that globalization has led to the emergence of new and advanced financial channels as well as a new type of broker agents, unlike the traditional agents who worked in collaboration with the state apparatus. The creation of these intermediaries has allowed transactions to be conducted in dynamic business environments, evading national

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regulations and arranging for swift shipment of goods and funds transfer to increasingly diverse locations. Additionally, they carry out flexible production while working in close proximity with their suppliers and clients (in temporal as well as spatial terms). The existing over-capacity of arms production is exploited by dealers, benefitting from huge surpluses in producer states and deliberate stockpiling in weak states. Added to this is the issue of non-state actors being able to access financial resources through diaspora communities who actively engage in raising hard currency through the illicit trade of primary commodities , thus helping the arms brokers. Furthermore, evidence suggests that predatory commercial activity is often a catalyst in sustaining armed conflict. Empirical research has shown that such conflicts are more often driven by greed to gain control over natural resources rather than being grievance-motivated. Consequently, conflicts are often triggered by those who want secure economic profit and accumulate political status. The resources required to sustain war, such as weaponry and communication systems are inextricably tied to the global economy. A vulnerable region weakened by armed conflict is viewed by criminal networks as an ideal territory for various illicit activities such as money laundering, arms trafficking, exploitation of cheap labour and various other resources. Reforms in banking due to technological advancements has increased capital mobility, thus helping the black market to branch out internationally while being well linked to their network at all times. Offshore markets and tax shelters rise in this manner. For example, portable cards are used to access vast amounts of money and transactions are increasingly made online without necessarily involving the physical transfer of cash, thus simplifying all sorts of transactions. The developments in commercial airlines as well as those in the freight industry have assisted transportation such that it has facilitated penetration of arms into conflict zones. It is difficult to regulate corruption involved in air and water travel, especially given the global mergers of companies, supply chains, as well as shipping firms. Free trade has meant that there are minimized customs regulations and border control measures, and arms are often passed through smoothly without proper cargo checks. For example, in 2002, nearly 5,000 AK-47s from

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Yugoslavian army supplies were smuggled from Serbia to Liberia, all the while being portrayed as a legal transaction involving Nigeria. Abu Salem, am underworld criminal from India who was convicted in the 1993 bomb blasts in India, was able to evade being arrested by escaping to Portugal. Globalization has meant that it is easy to move to different regions and expand or relocate ones business operations. But these benefits are often put to negative use by those involved in criminal activities. Arms dealers and other criminals often relocate to places where they wont be extradited. In the case of Abu Salem, it took three years for India to have him extradited from Portugal after many legal disputes. The unprecedented growth in communication in the past two decades is a major reason for globalisation and vice versa, and has played a vital role in allowing dealers to communicate across time zones and geographical boundaries at very cheap rates, while keeping the cost to a bare minimum. Cloned cellular phones and unsecured broadband networks have both helped them in not getting traced. In areas where other means of communication are not possible, satellite phones have done away with that problem too, thus providing uninterrupted contact. For example, in 2004 over fifty people were arrested in raids conducted in Britain over illegal arms possession, all of which were purchased through the internet. It is important to discuss how the illicit trade of arms exists not in isolation from other crime networks, but is in fact intertwined within the larger, global criminal networks. Once small arms enter the black market, they do not necessarily have to be exchanged for money. Instead, they could be traded for drugs, illegally extracted and smuggled diamonds, endangered species of plants and animals, etc. This makes it even more difficult to distinguish a single chain of criminal activity from the network of transnational crime. Arms dealers are often linked with transnational criminal organizations (TCOs) such as human and drug traffickers, terrorists, smugglers and mafias. The siphoning of arms during the 1979 Soviet invasion of Afghanistan is an instance of how arms find their way to the black market. Furthermore, members of the alQaeda come from different countries bearing fake identities together with passports to secure functionality. The arms they carry often belong to the black markets of Afghanistan, Pakistan, Latin America and Uzbekistan, and are reliant on profits gained from the drug trade of Afghanistan.

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According to a United Nations report in 2008, the opium industry of Afghanistan has been a chief source of funding the Talibans war budget, while also providing other terrorist and criminal organizations with a rich source of revenue. Despite falling trends in poppy cultivation and opium production, the Taliban are still able to gain several million dollars through the drug trade, especially through imposing charges on such economic activity including drug processing and smuggling. With such huge funds, their insurgency machine has naturally been resilient in the face of attacks from Afghan and allied forces. The UN also reported that hoarding opium allows them to gain even more from reduced poppy cultivation because it drives up prices and helps re-evaluate stocks. The measures that have been taken to crack down on the drug trade, such as making sale and import of raw material difficult, are all meant to counter organized crime and militant insurgency so that the drug trade sustaining a part of the Afghan economy is disconnected to the rest of the world. The links between Afghan opium farming and heroin addiction in Europe need to be countered with swift action, especially since this drug production is also fuelling violence simultaneously with drug use and is providing one of the most dangerous criminal networks with funds that are making them stronger. This chain connecting different crimes is reflective of how globalisation has intricately woven diverse areas and industries into an inseparable network of production and exchange that could potentially be harmful such as in this case. The current trend in global military spending has surpassed the highest figures that were reached during the Cold War era, thus having expanded the arms trade market manifold. In 2005, the global spending on arms was estimated to be 34 percent higher than in 1996. The key drivers of this growth in recent years all seem set to continue, such as the war on terror, invasions of Afghanistan and Iraq and the conflicts in the Middle East, as well as the general increase in military spending by several developing countries. In 2002-03, Pakistan was amongst those states that spent a larger share on military than healthcare. The cost to humanity of this global crisis will be discussed further in the course of this paper. The growth in the arms trade has run parallel to that in military spending, an example being the sixty percent increase in domestic and international sales that the top 100 armsproducing companies reported. In 2003, out of the worlds top 100 producers, 85 were

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headquartered in the developed countries. Topping the list of arms sales were American companies Boeing and Lockheed Martin. All these top companies have been involved in exporting weapons from China, Egypt, India and South Africa to destinations with sensitive socio-political situations such as Sudan and Uganda. In all such destinations these weapons have been put to illegitimate use. It is becoming increasingly tough to determine whether certain companies are shifting production to overseas locations deliberately in order to avoid domestic checks over exports. For instance, Glock, which is an Austrian pistol company, has planned to set up manufacturing facilities in Brazil. It is interesting to note that Brazil would not be subject to export rules of the European Union. The irresponsibility of companies lies in not being able to ensure that weapons being marketed within their jurisdiction do not violate human rights and international law. Emerging companies often suffer from competitive disadvantage in adhering to strict regulation which then sets a disincentive to do so. Resources are often diverted away from sustainable growth when states accumulate more arms than they require for basic security needs. Additionally, with the emerging exporters such as Israel, India and South Korea gaining a larger market share, it is becoming increasingly necessary to set strict rules for arms transfer since they are not following a uniform and stringent system of checks and controls. Proof of this lies in the example of when India, in 2002, ceased to maintain a blacklist of states considered too sensitive to export arms to. It has sold weapons to Myanmar and Sudan, both of which have been subjected to arms embargoes by the UN and EU. The cumulative transformation of the industry since the 1990s has meant that the trade is not just larger, but more globalised than ever. This brings us to one of the key issues showing why such globalization has been problematic. Till the Cold war period, only the major powers were nationally self-sufficient in arms but today no country can rely just on its own production. None of the top arms producers manufacture all the parts on their own. Like commodities belonging to other industries in the secondary sector, equipment is now rarely manufactured in the same country. Instead, components are sourced out and offshore facilities are set up in developing countries to take advantage of the cheap availability of resources and absence of strict law enforcement and legal documentation, all of which is cumbersome and costly. Additionally, collaborating with partners in different geographical locations has allowed Western

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companies to tap into new markets, and in return the developing partners gain access to modern technology. In fact, it is not just western companies sourcing components from around the globe, but also Chinese and Korean companies. In fact, the current trend in the arms industry involves mergers of non-US companies so as to secure US orders and acquisition, and this is seen in how a minor but increasing part of the US arms industry is now foreign owned. Such companies have a global reach. The role of these emerging exporters is pertinent because they have not developed effective control measures to monitor responsible exports and usage of the arms the produce. To explain how this is a problem, it must be noted that a 2006 survey of the black market for arms in Baghdad revealed that ammunition found constituted of components from different factories across the globe, from China, Bulgaria, Romania, Hungary, Russia, etc. although it is legitimate for non-traditional, emerging producers to seek to establish a foothold in the global market, they do not practice careful management of the weapons produced which is why their participation in this industry could potentially lead to dangerous developments in different regions. Sourcing components from across the globe has made the production process so integrated and interdependent that it is often difficult to avoid misuse of arms otherwise meant for legitimate use. The Brazilian company Embraer, for instance, depends on several suppliers to produce the parts of weapons destined for areas with insufficient regulation. Also, the re-export of components must also be supervised in order to avoid them falling into the clutches of black market forces. The level of human suffering caused by rampant arms proliferation necessitates swift and effective governmental action. About a thousand people die daily as a result of armed violence. Numerous others are assaulted and injured by gangs and criminal activities. According to Amnesty International reports, about 85 percent of killings and 75 percent of serious human rights violations both involve the use of light weapons and small arms. The weaponry used by Palestinian and Israeli armed groups and those used by Hezbollah are all put to violent use in killing civilians thereby violating human rights and humanitarian law. It is important to mention that even though the global expansion of the arms trade has had several negative results, the domestic effects of illicit arms usage is highly damaging too. States that are irresponsible in arms exports, in all likelihood will also be ineffective in protecting the local community from the arms culture. When the use of weaponry is prevalent in a society, the

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law and order situation is bound to suffer greatly. The threat from organized crime increases greatly when they can easily access arms, especially small and light weaponry. For example, Austrian hand grenades produced under license in Pakistan have been employed by armed groups in violent crimes in India, Bangladesh and Pakistan, killing and injuring scores of individuals. The cost to society of governments diverting excessive funds to arms production is the lack of investment in education and health sectors, thus compromising the standard of living and jeopardizing harmony and security in the region. The global illegitimate small arms industry is valued at nearly US$ 1 billion. It needs to be realized that it is small arms that fuel crime and sustained armed conflicts throughout the world, the four decades of conflict in Columbia and the plight of Afghanistan being clear examples of how big a deal the matter is. Examples of other regions affected by terrorism and anarchism following civil wars, etc. are Burundi, Ghana, Yemen, Kyrgyzstan, Nepal and Pakistan-all having suffered the effects of black globalization, whereby black market forces are able to benefit from the effects of globalization. There are steps that have been taken to combat the problem through global governance. In July 2001, the UN initiated the United Nations Programme of Action to Prevent, Combat and Eradicate the Illicit Trade in Small Arms and Light Weapons in All Its Aspects. This was directed towards presenting solutions through conducting conferences to consider measures nations could take to combat the illegal trade of arms and transfer within their boundaries. The network that was made during this period has 700 members addressing arms abuse and proliferation, dealing with gun manufacture rules, maintaining relevant documentation, marking and tracing guns and enforcing strict laws on weapons sanctions. The Un Firearms Protocol, which commenced in July 2005, was a program structured to assist inter-state cooperation in dealing with the crisis. Despite the approval of 44 states, the program has been unsuccessful since the majority of states have not accepted it since it is not in line with their laws or interests. It needs to get the approval of the global community so as to ensure effective implementation of the proposed measures. The Control Arms Campaign and the Arms trade Treaty was a campaign launched in 2003 by Amnesty International. Its aim is to fight the irresponsible transfer of arms to countries

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that have been involved in human rights abuse. It endorses laws to prohibit the activities of the black market. So far, an International Arms Trade Treaty (ATT) to unite countries under a common set of legally binding laws that it has proposed has not yet come about despite massive support. However, this is not to discount the value of debate and discourse regarding the issue as it is important to highlight issues before dealing with them. The International Criminal Police Organisation (Interpol) facilitates the cooperation of international police and transnational crimes like terrorism and human, drug and arms trafficking are its area of focus. It has been aggressively involved in tracking down the business and its biggest success is the arrest of Victor Bout, the worlds biggest arms dealer allegedly engaged in supplying weaponry to the al Qaeda. The organization, comprising 186 member states, encourages multilateral cooperation amongst nations to counter the problem and collects/shares data regarding arms brokering to gain greater insights into the network. It is important to shed light on the regional cases that fuel the arms trade. In Latin America, to start with, the demand for illicit arms is high due to rising criminal and cross-border activities. Nearly ninety percent of illegal arms enter through Panama, Columbia and Guatemala. Illegally manufactured arms from North America pose a huge challenge too. The instability in conflict-laden South East Asia generates high demand for firearms. The region is considered to be a crossroads for the smuggling and trafficking of arms. There have been a number of intrastate conflicts plaguing the region which have been instrumental in creating a black market, the illicit trafficking of arms thereby adding to the security threat that region faces, the black markets of Thailand, Cambodia and Vietnam being important examples in this regard. The inter-state conflicts and ethno-religious disputes of Sub Saharan Africa create an environment conducive to the flow and usage of illegal arms. The conflicts in Liberia and Congo are prime examples in this regard. The involvement of Europe lies in its role as a chief arms exporter. Also, the flourishing arms trafficking business of Eastern Europe, which can be traced back to the Cold War is a major problem. The Arab world is facing two pressing issues. Firstly, The US-led invasion of Iraq in 2003 contributed to bringing more arms to a region already plagued by the issue as arms fell into the hands of the Taliban and militant insurgency rose manifold due to this. Secondly, the ongoing Israel-Palestine conflict has led to illicit arms proliferation in the region on an

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unprecedented scale. Coupled with these issues is the inadequate regulation in the region. The League of Arab States is working to monitor arms-related activities, the main issue being the Palestine issue which gave rise to arms trafficking and inevitably, terrorism. Despite the various steps that have been taken so far, they have been ineffective in addressing the problem such that it is eradicated completely. Countries all over the world are threatened by the illicit arms trade, despite the countless efforts made on a national scale. This brings us to certain recommendations to combat the problem. Firstly, an international standard needs to be set to mark and trace small arms. It needs to be uniformly abided to so as to avoid discrepancy in the markings across regions. This will be crucial to detect and trace the routes taken in the illegal transfer of weapons and where they fell into wrong hands. Secondly, the stipulation of a common model of stockpile management and security measures needs to be established so as to avoid cases of looting of stock meant for legal purposes. Another measure that is actively promoted is that surplus arms should be destroyed so they arent misused. Thirdly, arms licensing policies need to be tightened so as to restrict their availability to the civilian population. With tough requirements to be met for attaining weapons, it will be more difficult to avail these arms and put them to wrong use. Alongside that, the activities conducted in arms brokerage need to be closely monitored and the confines of the boundaries within which they can operate lawfully need to be established. The existing national laws regarding arms trade need to be bolstered, updated and reformed regularly in order to ensure that they are not outdated and manage to keep up pace with the rapidly globalizing world. The activities of private companies need to be supervised by state regulatory bodies so as to restrict them from supplying arms to sensitive regions or those with weak controls on arms management, since this allows dealers to siphon firearms. The most important step in dealing with the issue of globalization aiding illicit arms trade is strengthening multilateral agreements and integrated effort of all countries. These can be regionally altered to make them best suited to the circumstances of that area. Such collaboration would help bring about cooperation through sharing information and would ensure strict adherence to rules, such as not exporting to embargoed countries. With common international benchmarks set for export practices, the danger of misuse of arms can be avoided. The most important factor in the case of responsible exports is transparency. Negligence in dealing with arms transfer could very well

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lead to greater violence so tracing the arms along the entire chain of production and sale should be supervised. Mechanisms restricting irresponsible arms transfer and sales need to be evolved to reduce the negative effects of illicit firearms on the global society. A comprehensive study of the illicit arms trade is incomplete without studying the inevitability of the black market. It functions on the basic economic rules of the free market, i.e. demand and supply. Even though gun possession could be made illegal, there will still be groups and individuals such as terrorists and rebel groups who will uphold the demand for weaponry and keep the black market running. Engaging in such gun supply is risky business, but since those demanding them are ready to pay high prices to avail arms, dealers stand to gain heavy profits. To keep the supply running, dealers will be involved in siphoning guns from the legal market, selling abandoned ones from conflict zones and looting stocks meant for legitimate use. The supplier network is strengthened with the unbound profits that are gained through such deals and they become experts at circumventing laws and exploiting vulnerable loopholes in the system to their advantage, especially considering the resources they have accumulated. Despite embargoes and strict laws, if there is demand, the black market will continue to exist since there will always be forces trying to pursue their own agendas, through illicit means if necessary. Conclusively, it can be said that when measured up against the increasing need for better human security in the light of a completely transformed global arms industry, the current levels of state controls are painfully anachronistic and insufficient. There is absence of a global treaty binding all regions together under a common code of regulations that would avoid discrepancies and loopholes in the system being exploited by criminal networks. Effective conflict resolution and peacekeeping cannot be achieved without arms control. An International Arms Trade Treaty would be a major step in improving lives affected by armed violence and in curbing the growth of criminal networks that the illegal arms trade complements. The challenges that have accompanied globalization mean that governments can no longer rely on traditional national export rules and need to ensure that they dont contribute to human rights violations and fuelling armed conflict. Terrorism is a major threat to world security and gets intensive media coverage. However, it is important to realize that not enough attention is given to the driving force behind such crimes and the weaponry involved is probably the chief strength of rebel groups and criminals. It is therefore indispensible to control arms transfer if global peace is to be achieved.

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WORKS CITED Eurasia Review. 2013. Globalisation And The Illicit Trade Of Small Arms And Light Weapons. [online] Available at: http://www.eurasiareview.com/15012011-globalisation-and-the-illicittrade-of-small-arms-and-light-weapons/ [Accessed: 21 Dec 2013]. Arms Without Borders. 2013. [online] Available at: http://www.oxfam.org/sites/www.oxfam.org/files/Arms%20Without%20Borders.pdf [Accessed: 21 Dec 2013]. Gunpolicy.org. 2013. Guns in South East Asia: Small arms policy, firearm injury and gun law. [online] Available at: http://www.gunpolicy.org/firearms/region/south-east-asia [Accessed: 21 Dec 2013]. Unknown. 2013. [online] Available at: http://www.smallarmssurvey.org/fileadmin/docs/E-CoPublications/SAS-IDS%202001%20bulletin_32.pdf [Accessed: 21 Dec 2013]. Unknown. 2013. [online] Available at: http://controlarms.org/wordpress/wpcontent/uploads/2011/02/Arms-Without-Borders-Executive-Summary.pdf [Accessed: 21 Dec 2013]. UN News Service Section. 2013. UN News - Opium trade finances Taliban war machine, says UN drug tsar. [online] Available at: http://www.un.org/apps/news/story.asp?NewsID=29099&Cr=afghan&Cr1=unodc#.UrUIJ_S2aU M [Accessed: 21 Dec 2013].

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