A year ago, India and Pakistan stood on the verge of what many feared would be a nuclear war. Tony Blair and other world leaders pleaded with both governments to pull back from the brink. Although relations between the two sides have improved recently, the risk of a war triggered by events in the Kashmir Valley remains. In this context, the imminent announcement of a deal between BAE Systems and the Indian government for 66 Hawk jets is a source of great concern. Contrary to previous denials, the British government has admitted that an export licence for some Hawk components and production equipment was approved in September 2001, and it is now certain to pass the remaining licence to secure the deal. Of the 66 Hawks, 22 will be directly exported to India and 44 will be manufactured there.
The government's defence for the deal will be twofold. First, it will say the Hawks are merely training aircraft. However, the BAE Systems website states that Hawks can be adapted for more offensive use and can "deliver a comprehensive array of air-to-air and air-to-surface weaponry with pinpoint accuracy". Indonesia certainly used British-supplied Hawk "trainers" aggressively in East Timor in 1999. Furthermore, India's air force plans to use the Hawks to train pilots to fly Jaguar fighter aircraft that are being upgraded with Israeli avionics to make them nuclear-capable.
The British government's published criteria state that an export licence should not be granted if "there is a clear risk that the intended recipient would use the proposed export aggressively against another country or to assert by force a territorial claim". That risk clearly exists, but the government has chosen to play it down. By supporting this deal, Britain will significantly enhance India's offensive capability and contribute to further military build-up in the region. Instead, it should be working with the United States, the European Union and others to urge India and Pakistan to de-escalate and demilitarise, and to begin serious negotiations over Kashmir.
The government's second defence for the deal will be that it is good for the economy and jobs. But such an assertion is contested by The Economic Costs and Benefits of UK Defence Exports, a report first published in November 2001 and updated last year. The authors, Neil Davies and Chris Wilkinson (senior economists at the Ministry of Defence) and Malcolm Chalmers and Keith Hartley (independent academics), looked at the likely economic effect of a 50 per cent reduction in arms exports. They estimated that it would lead to the loss of 49,000 jobs in the defence sector, but that this would be offset by the creation of about 67,000 jobs in non-defence employment over a five-year period. They also argued that, overall, national income would be substantially the same after five years. The report concluded that "the economic costs of reducing defence exports are relatively small and largely one-off", and that "the balance of argument about defence exports should depend mainly on non-economic considerations".
The Hawk deal raises questions about the way the government makes policy on arms export issues. The Prime Minister, Deputy Prime Minister, Foreign and Defence Secretaries have all been involved in lobbying for the deal. Each licence application is supposed to be considered impartially against agreed criteria, but the ministers' promotion of the deal makes it almost inconceivable that a licence would be refused.
Clear limits should be established on ministerial involvement in the promotion of arms exports. The government should scrap the Defence Export Services Organisation - which Denis Healey set up as defence minister in the 1960s with the remit of promoting arms sales to the developing world - and phase out the support given to arms exports by the Export Credits Guarantee Department. There should also be greater parliamentary involvement on arms export issues. Four select committees, covering defence, foreign affairs, international development and trade, have called for a prior parliamentary scrutiny committee.
For too long, the moral case against some arms exports has been trumped by the apparently invincible economic case in favour. But the findings of the government's own economists suggest that a more responsible approach is not a question of economic loss versus moral gain. The government, first elected on a pledge to clean up the arms trade, is running out of excuses for not doing so.
David Mepham is the head of the international programme at the Institute for Public Policy Research