Saudis, Indonesia Buy Arms From Russia

This story, about how are supposedly close allies are now buying weapons from Russia, most decidedly not one of our good buddies, has gotten.

It’s a sign that US power is waning. Economic historian Niall Ferguson, in his book The Cash Nexus, pointed out the importance of sound national finances to military standing. It had been conventional wisdom among historians that armed might correlated strongly with size of the economy. However, Ferguson showed how England was consistently able to punch above its weight, particularly relative to France, due to its professional tax gathering system (the French, by contrast, used “tax farmers” who were corrupt, disliked, and suspected of dipping heavily into their collections). As a result, England was able to raise funds in international markets at favorable rates, a key advantage in times of turbulence.

The article attributes the acquisitions to Russia’s ability to offer attractive financial terms, and the Saudi purchase was of helicopters, hardly advanced miltiary technology. However this may also come out of a desire of oil rich countries to hedge their security bets. Russia now has a foot in the door with both nations ; the lack of official criticism and press attention may be taken as tacit acceptance.

From :

No one should be surprised when Venezuela and Iran use their bursting oil revenues to close giant arms deals with Russia. The leaders of both countries hate the United States like poison and are engaged in ambitious, breakneck arms buildups to make their nations the dominant military powers in their respective regions: Who else are they going to buy decent weapons from on easy credit terms?

But when Saudi Arabia and Indonesia, both generations-long allies of the United States, independently conclude giant $1 billion arms deals with the Kremlin within a few weeks of each other, even the pundits of the American media should have sat up and taken notice.

As previously reported in these columns, Indonesia is buying a submarine and a large number of Sukhoi interceptor fighter jets from Russia. This is the first such order in well over 40 years since pro-communist President Sukarno, the nation’s founding father, was overthrown by Armed Forces of Indonesia, or TNI, leader Gen. Suharto in 1965-66.

Since then the country has been firmly in the U.S. camp, and that position seemed confirmed for another decade at least when President Megawati Sukarnoputri — Sukarno’s daughter — lost her re-election bid to former defense minister and TNI chief, current President Susilo Bambang Yudhoyono.

Yudhoyono had the reputation of being the strongest friend the United States had among his generation of leaders in Indonesia, and he appeared to confirm that at first by effectively stepping up the levels of anti-Islamist terror group security and intelligence cooperation between Jakarta and Washington, with gratifying successes for both sides. So why did he make such a bold move as to approve the arms deal with Moscow?

The arms deal just concluded between Saudi Arabia and Russia to an equally disdainful lack of interest in the American media is at first glance even more extraordinary: Saudi Arabia was a fierce ideological enemy of the Soviet Union for the first 70 or so years of the kingdom’s existence, and Riyadh’s strong close cooperation with the United States on supporting the mujahedeen guerrillas in Afghanistan and keeping global oil prices low and therefore Soviet revenues from their oil and gas exports extremely low played a crucial role in bringing about the economic collapse of the Soviet Union.

Since then, Riyadh under kings Fahd and Abdullah retained its traditional caution towards Russia, particularly as Russia retained good ties and continued to sell arms to Syria, Iran and Iraq under Saddam Hussein, three countries the Saudis understandably regarded with grave suspicion.

Yet now the Saudis have agreed to buy $1 billion worth of helicopters — and not even state-of-the-art Russian helicopters — from Moscow, rather than buy American Sikorskis. What gives?

The first thing that gives in both cases is that the current enormous global prices of oil are having the reverse effect that low global prices had a quarter century ago in the Reagan era. Far from going bankrupt because of collapsing export earnings and becoming unglued as the Soviet Union did, the Russian national state restored by current President Vladimir Putin is now awash with oil and gas export revenues and is therefore in a position to offer extremely easy credit terms to nations like Malaysia and India, and even to new perspective buyers of Russian aircraft, ships and weapons like Indonesia and Saudi Arabia. The cash-strapped U.S. Treasury, facing the largest annual budget deficit in U.S. history of at least half a trillion dollars annually, cannot begin to compete with that.

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3 comments

  1. CrocodileChuck

    Yves

    Indonesia doesn’t always purchase from the US-in fact, they were denied the right to purchase advanced fighters in the nineties from the USA; also, they purchased the Baltic fleet of East Germany after reunification. Unfortunately , these were not built for tropical conditions-they hulls rusted!

    CrocodileChuck

  2. Yves Smith

    CrocodileChuck,

    I dimly remember the advanced fighter row, now that you mention it. But buying from Germany still isn’t the same as buying from Russia.

    And by happenstance, this development becomes public around the time China is refusing to let our fleet anchor in their ports (not that they should, mind you, except that it had become accepted practice until the Chinese decided to have fun snubbing America).

  3. Manto

    It is a smart thing to do, see Pakistan’s purchase of F16s in the early 90s – full payment, no refund, delivery more than a decade later when the aircraft were obsolete!

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