Ukraine’s Defense Industry And The Prospect Of A Long War – Analysis

 September 24, 2022 

By Published by the Foreign Policy Research Institute

By Thomas Laffitte*

(FPRI) — After more than six months of war, Russia and Ukraine are now preparing for a long period of hostilities, forcing each side to find long-term solutions for their military supplies. Without Western military and financial assistance, Ukraine would be unable to sustain its military or continue fighting. Although the West has pledged to provide Ukraine with equipment for as long as it takes to win the war, Kyiv wants to procure as much equipment as possible to avoid any policy changes or delays in delivery.

What contributions could Kyiv expect from its homegrown defense industry? Ukraine inherited numerous defense enterprises from the Soviet era, so can these produce some of the wartime equipment Ukraine needs?

The fact that the Ukrainian Armed Forces destroyed the Russian flagship Moskva at the beginning of April using a missile designed and produced by the Ukrainian industry hints at an untapped potential. More recently, the announcement that Baykar, the Turkish manufacturer of the Bayraktar TB2 drones, intends to open a factory in Ukraine also propelled optimism about Ukraine’s military-industrial capacities.

The Ukrainian defense industry already fulfills an essential function with its ability to repair military equipment. Although only a marginal contributor to the country’s military supplies, Ukraine’s defense industry could prove significant if it manages to scale up. To do this, it will have to overcome many obstacles. No Ukrainian territory is spared from Russian strikes, and it is very difficult in these conditions to set up such strategic production lines. Above all, after years of underfunding and production problems, the Ukrainian military-industrial complex entered this war in a very poor condition.

The Slow Decline of the Ukrainian Defense Industry

A common mistake is to forget that Russia is not the sole heir to the Soviet Union. At the fall of the Soviet Union, Ukraine concentrated approximately 15 percent of both research, development, test and establishment, and factories of the former Soviet military production. This amounted to 700 dedicated plants and a workforce of approximately 500,000 people, making the defense industry one of the largest employers in the country.

Some of these enterprises were among the most strategic for the Soviet military. This was especially true for the navy, with the shipyards of Mykolaiv located on the Black Sea. These were the only ones able to accommodate an aircraft carrier, a severe loss for Moscow, which subsequently had to maintain its unique aircraft carrier in its northern ports, which freeze in winter.

Ukraine also inherited many assets in the aerospace industry. Pivdenne, based in Dnipro, was the heart of the Soviet intercontinental missile production; Motor Sich, based in Zaporizhzhia, equipped Soviet aircraft with its engines and gas turbines; and the most famous example certainly remains Antonov, the company behind the largest aircraft of all time, the Mriia A-225, which was destroyed in the first days of the war. In addition, the Malyushev factory in Kharkiv is the largest armor production center in the former Soviet Union and has been since World War II.

But as significant as it was in 1991, Ukraine’s defense sector faced massive economic headwinds following independence. Unlike Moscow’s ambition to remain a great power, Ukraine quickly chose neutrality. Perceiving no immediate security threat, the Ukrainian Armed Forces did not have a pressing need to acquire equipment, nor was it given the budget to do so. As a result, it purchased little from local producers, who had to rely on exports to stay alive. On top of that, lack of funding pushed away the country’s educated engineers, who were attracted by other, better-paid industries.

The Wake-Up Call of 2014

The annexation of Crimea in 2014 and the outbreak of the conflict in the Donbas was a wake-up call, forcing the Ukrainian army to re-equip itself, and in the process, place orders with local companies. Exports drastically decreased, to the benefit of the Ukrainian Armed Forces, who for example acquired a batch of T-64 and BTR-3 tanks originally ordered by Angola and Thailand.

But this sudden wave of orders came up against an industry that has lost its historical partners based in Russia, with whom the Ukrainian industry had until 2014 maintained vital links. The total disruption of trade has caused serial problems for these producers, who have suddenly had to find new suppliers. Often, they did not find any. Antonov, for example, has not produced a single plane since 2016.

In addition to the overall failure of the Ukrainian industry, there is the current damage caused by the invasion of Russia since February. Not surprisingly, Ukrainian production sites are targets for Russian strikes. Already by May, key facilities in Kyiv and Mykolaiv, as well as the giant Malyshev tank factory in Kharkiv, were destroyed or badly damaged. More recently, the Motor Sich factory in Zaporizhzhia was hit.

Limited Expectations 

What can be expected from the Ukrainian defense industry going forward? The sinking of the Russian flagship in the Black Sea, the Moskva, using surface-to-sea missile developed by the Luch Design Bureau in Kyiv, named “Neptune,” an update of a former Soviet technology that now equips the Ukrainian military, was a turning point in the war and a boost for the country’s defense sector. Luch, one of the few relatively successful Ukrainian producers, also builds the air-to-ground Stuhna missile, regularly used during the war. Nevertheless, procurement of high-tech weaponry remains overall very limited. In 2021, the general director of Luch, Oleh Korostelev, declared that his company was only able to provide “600 or 800” Neptune missiles to the Ukrainian Armed Forces, which requested at least 2,000.

However, high-tech weaponry is not the only field where the defense industry matters. Steven Zaloga, defense specialist and consultant at TEAL Group, explains that “the Ukrainian army [is] well provided with modern uniforms, small arms, and soldiers’ gear and a lot of this seems to be indigenous.” He also notes that “in the armored vehicle field, there seems to be a fair number of BTR-3/BTR-4 in use.” It is hard to know in more detail the contribution of the homegrown industry, he notes, as “Ukrainians are tight-lipped about their production capacity at the moment,” for fear of seeing them suffer air strikes.

This fear also casts doubt on the announcement of a future opening of a factory to build Bayraktar drones in Ukraine. Ukrainian President Volodymyr Zelensky confirmed the arrival of the Turkish company and its joint production with Ukrainian manufacturers. The land has reportedly already been purchased, but its location remains unknown. On the other hand, the Ukrainian drone maker UkrSpecSystems announced plans to relocate production to neighboring Poland. Considering this news, it is hard to imagine the Turkish producer investing in a new facility in Ukraine.

The Need for Maintenance

Given the challenges Ukraine faces in procuring weapons, it has no choice but to rely partly on domestic manufacturing. Talking to Ukrinform, Vladyslav Belbas, chief executive officer of the Ukrainian manufacturer UAV, summarized the situation:

Without waiting for lend lease, Ukraine is obliged to place orders with domestic producers. Will there be negative consequences for the Ukrainian defense industry from lend lease? Yes, there will, but the key word here is ‘Ukrainian.’ Because if there is no lend lease, then there will be no Ukrainian defense industry. There needs to be a healthy balance between import supplies capabilities and domestic manufacturing capabilities.

Given the state of Ukrainian finances, there is little hope that Kyiv will overload its local producers with orders. On the other hand, maintaining production lines capable of repairing equipment seems to be a more achievable goal. “Ukraine has a significant armored vehicle rebuild facilities, so this may account for their ability to recycle damaged/captured armored vehicles,” reminds Steven Zaloga. This aspect is also underscored by Vladyslav Belbas: “[the indigenous industry] should not stand aside and watch this process, because without domestic manufacturers, none of the equipment supplied to us will be promptly repaired. We cannot take, for example, an American howitzer to the USA for repairs.”

Gen. Valeriy Zaluzhnyi, the commander-in-chief of the Armed Forces of Ukraine, echoed these concerns in one of his rare public interventions. “Ukraine can consider acquiring the relevant weapons systems from partners only as a solution for the transition period. From the first days of the Russian full-scale aggression, the Ukrainian side has faced the acute problem of restoring and establishing its own design and production capacities to manufacture high-tech weapon systems,” says Zaluzhny. He added that “Ukraine’s national efforts to this end open up unlimited opportunities for international military-technical cooperation with partner countries.”

Despite its challenges, the Ukrainian defense industry still can play a decisive role in the war, if only through its ability to repair equipment. In the immediate future, Western arms deliveries will have the greatest impact, but if Ukraine can save its industry, both by protecting it from Russian strikes and by providing it with sufficient financing, it could make a valuable contribution.  

The views expressed in this article are those of the author alone and do not necessarily reflect the position of the Foreign Policy Research Institute, a non-partisan organization that seeks to publish well-argued, policy-oriented articles on American foreign policy and national security priorities.

*About the author: Thomas Laffitte is a Fellow in the Eurasia Program at the Foreign Policy Research Institute and a Ph.D. candidate enrolled in a double degree between Sciences Po, Paris and the Central European University, Vienna.

SEE LA REVUE GAUCHE - Left Comment: Search results for PERMANENT ARMS ECONOMY 

 

Shanghai Cooperation Organization in Samarkand, Uzbekistan 2022. Photo Credit: President.az

Wall St. Journal Columnist Too Easily Dismisses An Eastern-Led World Order – OpEd

 September 24, 2022  Eurasia Review  

By David C. Speedie

In his latest broadside in the Wall Street Journal, Walter Russell Meade takes aim at a body that most Americans have never heard of – the Shanghai Cooperation Organization [SCO] — and its annual summit in Samarkand, Uzbekistan.

Mead’s core message seems to be twofold: first, “the Eurasian power balance is shifting,” he argues— that is to say, China’s support for its friend and fellow charter SCO member, Russia is waning. To illustrate this he draws a head-scratching comparison between Presidents XI and Putin on the one hand and Hitler and Mussolini on the other.  Second, he damns the SCO with faint praise, noting that with the addition of India and Pakistan “the organization has become more significant”; but proceeding then to suggest why the opposite is the case: “Russia, China and Iran seek a new global system but propose no positive agenda.”

There follows a checklist of current crises across the extended SCO region that, for Mead, illustrate the SCO’s relevance vacuum: the “humanitarian nightmare” of Afghanistan (and at whose feet do we lay that?); the disastrous floods in Pakistan; food and energy deprivation “from Turkey to Kazakhstan,” collateral victims of US and EU-imposed sanctions on Russia.  This incongruous balance of natural disaster and Russian culpability  as somehow the fault of SCO is followed by a swipe at China, whose “saber rattling over Taiwan has galvanized a stronger alliance against it.” Does he mean NATO? On a recent trip to northern Europe I heard rumblings of intra-alliance discord over future conflict with China.

Mead’s central argument is that SCO’s agenda is clumsy and insubstantial: in a rather weak final paragraph he sums up the Samarkand summit thus: “If SCO nations seriously want a new international system, they will have to do better than this.”   This makes one wonder if Mead actually read, for instance, President  Xi’s keynote address to the summit.  In addition to some broad general principles: “consultation and cooperation for shared benefit”; “consensus-based decision making”; “commitment to the purposes and principles of the UN charter” and the like, the Chinese leader outlined specific SCO measures, ongoing or planned: joint anti-terrorism exercises; China’s commitment to train 2000 law-enforcement personnel in fellow SCO countries on counter-terrorism, drug and human trafficking; an SCO-Afghan contact group to address humanitarian needs, and pledging 1.5 billion remnimbi ($215 million) in emergency assistance; a regional development initiative and a five-year Treaty of Cooperation on trade and investment, infrastructure building and scientific/technical innovation; and a series of SCO forums on poverty reduction and sustainable development.  Finally, he proposed a series of “people to people and cultural exchanges on education, health, and science and technology.”

Lest all this be dismissed as cavalierly as Mead intends, let us remember that: SCO is the world’s largest regional organization, whose eight permanent members, including Russia, China and India, with Iran and Turkey in the wings, represent 40% of the world’s population over an area 60% of global geography and with 30% of global GDP.  While there are intra-group tensions, it is a forum for historic rival members such as Armenia and Uzbekistan, India and Pakistan, Iran and Saudi Arabia.  To quote Churchill: better to jaw-jaw than war-war.

In February 2010 I wrote an article on the SCO. I cautioned against dismissing the organization: “The conclusion is that the SCO, far from an empty vessel, is a regional force to be reckoned with … a neighborhood watch over some of the world’s most insecure places.”  Twelve years and several influential new members on, this seems all the more obvious.  One wonders if the reference in Walter Russell Mead’s title to “disrupting the world order” stems from an indignation over an institution that reflects a new world order and operates independently of the West?

David C. Speedie, a board member of ACURA, was the former chair on International Peace and Security at Carnegie Corporation. This article was produced by Globetrotter in partnership with the American Committee for U.S.-Russia Accord.

Argentine VP blames corruption trial for assassination attempt

This handout photo released by Cristina Fernandez de Kirchner’s Press Office shows Argentina’s Vice President Cristina Fernandez de Kirchner during a meeting with representatives of the Catholic Church who work in poor neighbourhoods, on September 15, 2022, at the National Congress, in Buenos Aires, during her first public appearance after an attempted murder against her on September 1 at the door of her house. 

— Charo Larisgoitia/Cristina Fernandez de Kirchner’s Press service/AFP pic

Saturday, 24 Sep 2022

BUENOS AIRES, Sept 24 — Argentina Vice President Cristina Kirchner on Friday blamed what she implied was a hostile environment created by her ongoing corruption trial for an assassination attempt against her earlier this month.

Kirchner is among 13 people accused of fraud and corruption that occurred during her two terms as president as well as her late husband Nestor’s term.

On September 1, Kirchner, 69, survived an assassination attempt as she mingled with supporters outside her home, when a gun brandished by a man in the crowd failed to fire.

Speaking by video link at her trial Kirchner said that before the attack she thought the procedure, which opened in August, was to “stigmatise” her “and to bar me” from politics.

The case involves bribes alleged to have been paid in her Patagonian political stronghold.

“But after September 1,” she said “I realised there could be something more.”

Kirchner, who is also implicated in several other corruption investigations, has always claimed to be the victim of political persecution.

“This is creating an environment,” she added. “I feel very vulnerable, worried.”

Four people have been arrested over the assassination attempt but only the 35-year-old man who pointed the gun and his 23-year-old girlfriend have been officially charged with aggravated attempted murder.

During her deposition, Kirchner said “no one could believe this gang came up with and planned this attack” alone, without explicitly pointing the finger at anyone in particular.

The attack has proved fertile breeding ground for Argentina’s polarised politics.

Those on the center-left government’s side have insisted the four young people must have been financed and directed by others, while liberal former president Mauricio Macri has dismissed any “political orchestration.”

As for her own trial, Kirchner accused prosecutors, who have requested she be jailed for 12 years and banned from politics for life, of “lies, slander and defamation.”

A verdict is due at the end of the year. — AFP

Argentina's vice president defends herself over corruption allegations

Cristina Fernandez de Kirchner denounces ‘incredible lies’ by federal prosecutors who want 12-year prison sentence

Bala Chambers |24.09.2022


LONDON

Argentina's Vice President Cristina Fernandez de Kirchner defended herself Friday against alleged graft charges in awarding public works and criticized the "incredible lies" by federal prosecutors.

De Kirchner spoke to the court via Zoom for an hour and 20 minutes from her office in the Senate as she raised questions about the "arbitrariness" of the trial and labeled the allegations "nonsense."

The vice-president also hit out at federal prosecutors, accusing them of lying and described the allegations as "profoundly unconstitutional, anti-republican and anti-federal. "She described the trial as "a clear case of malfeasance" and rebuffed claims of criminality during her and her husband's presidency.

"The people elected the governments, the three governments, the one headed by Nestor Kirchner and those headed by me -- we were elected by the people. We cannot be an illicit association," she said.

De Kirchner previously argued that the trial is a political witch-hunt and on Friday appeared to cast doubts on the judiciary. "From Sept. 1 (the day of the attempted assassination) I realized that there may be another thing behind all the stigmatization and attempts to ban me," said de Kirchner. "Suddenly, it's as if the judicial sphere is giving social license so that anyone can think and do anything."

Federal prosecutors accuse de Kirchner of awarding fraudulent and overpriced public works contracts in the southern province of Santa Cruz during her two-term tenure as president from 2007 - 2015 and have been pushing for a 12-year jail sentence and a lifetime ban from holding public office.

Many of the contracts allegedly benefitted close allies of the Kirchner family, with some already convicted of corruption.

The sentence against Kirchner is expected in months, although some say she could appeal to higher courts, which would likely extend the time considerably in reaching a final verdict.

HINDUTVA FEAR MONGERING
India warns nationals living in Canada of rising hate crimes, ‘sectarian violence’
By Camille Bains The Canadian Press
Posted September 23, 2022 

India's Foreign Minister Subrahmanyam Jaishankar answers a question from a reporter during a press conference in Bangkok, Thailand, Wednesday, Aug. 17, 2022. India's government is warning its citizens in Canada of a sharp increase in hate crimes, sectarian violence and anti-India activities. 

THE CANADIAN PRESS/AP-Sakchai Lalit.

The government of India is warning its citizens in Canada about what it calls a sharp increase in hate crimes, sectarian violence and “anti-India activities.”


But the head of a Sikh group based in Mississauga, Ont., said the allegations in a statement issued Friday by India’s External Affairs Ministry were directed at peaceful Sikh political activism in Canada, and were baseless.

The Indian government said in the statement that it has taken up the alleged incidents with Canadian authorities and requested an investigation.

“The perpetrators of these crimes have not been brought to justice so far in Canada,” said the statement, which does not provide information on where the alleged incidents occurred.

READ MORE: Police investigating after Hindu temple in Toronto reportedly vandalized

It said that in view of the “increasing incidences of crimes,” Indian nationals and students in Canada are advised to exercise due caution and remain vigilant.

No one from Global Affairs Canada was available to respond to a request for comment on the claim from India’s government, and RCMP headquarters in Ottawa did not immediately provide a response.

Balpreet Singh, spokesman for the World Sikh Organization, said the statement is “completely political” and there is no evidence of any rise in sectarian violence or extremism targeting Indian nationals or students in Canada.

He said a Hindu temple was vandalized with graffiti in Toronto last week, but police there have so far not linked that incident to “anti-India activities.”

“My organization and other organizations condemn any vandalism of any place of worship. It’s unacceptable, so we hope that whoever is responsible is brought to justice,” Singh said.

Sikh Canadians celebrate Sikh Heritage Month – Apr 10, 2022

He said the Indian government’s claims may be in response to a so-called “Khalistan referendum” held in Brampton, Ont., on the creation of an independent Sikh homeland.

Singh said tens of thousands of Sikhs cast their votes in that effort, organized by Sikhs for Justice.

Similar referendums are being held around the world, he said, with votes expected to take place in Vancouver and Calgary.

Singh said the referendums were a threat to the Indian government as Sikhs gathered to support their goal of an independent homeland.

“Jews in America played a key role in the formation and support of Israel,” he said, adding that India broke from British rule following activism that involved people in North America in the early 1900s.

Singh said other recent gatherings organized by Sikhs have been maligned.

In June, members of Ottawa’s Sikh community called for an investigation after Parliament Hill was evacuated and two men were arrested at an event to commemorate the 1984 massacre of Sikhs in India.

Police apologized and released the members of a group that organized the event after concluding no public safety threat had been made.

The massacre of Sikhs in India was linked to the assassination of prime minister Indira Gandhi by her Sikh bodyguards, after the Indian army raided the Golden Temple in Amritsar, where militants had occupied Sikhism’s holiest shrine.

 

Republicans unveil 90s-throwback midterm election agenda

By David Smith in Washington

THE GUARDIAN

September 23, 2022

Republican Kevin McCarthy, the House minority leader, unveiled his party’s "Commitment to America" agenda on 23 September. Photograph: Barry Reeger/AP

Republicans have unveiled a midterm election agenda heavy on critiques of Joe Biden but light on specific policies – and with a throwback theme to the mid-1990s.

After a primary season dominated by extremist “Make America great again” (Maga) candidates and deniers of the 2020 election result, Friday’s launch also represented an effort to tone down rhetoric and win back independent voters.

Kevin McCarthy, minority leader in the House of Representatives, introduced the party’s “Commitment to America” at an event near Pittsburgh, Pennsylvania, a crucial battleground in November’s vote.

The memo of principles underlined how Republicans are hoping to make the midterms a referendum on the presidency of Biden rather than his predecessor, Donald Trump, who continues to suck up media oxygen as a target of several criminal and civil investigations.

“I challenge the president to join with us – let’s go across the country and let’s debate what his policies have done to America and our plan for a new direction,” McCarthy told supporters. “And let’s let America make the decision for the best way for this country to go forward.”

The one-page commitment carried unavoidable echoes of the “Contract With America”, a statement of intent in 1994 that helped Newt Gingrich’s Republicans gain the House majority during Bill Clinton’s presidency, for the first time in more than four decades. But McCarthy’s version offered less detail and, critics said, less ambition.

Its defining message was that Democrats have failed the American people. McCarthy, who hopes to replace Nancy Pelosi as House speaker, said: “The Democrats, they control Washington. They control the House, the Senate, the White House. They control the committees, they control the agencies. It’s their plan but they have no plan to fix all the problems they’ve created.”

Taking a leaflet from his jacket pocket, McCarthy added: “So you know what? We’ve created a commitment to America.”

The four pillars are “an economy that’s strong”, “a nation that’s safe”, “a future that’s free” and “a government that’s accountable”.

The first point reflects Republicans’ hope that stubbornly high inflation will lead voters to punish Democrats on election day.

McCarthy said a strong economy means “you can fill up your tank, you can buy the groceries, you have enough money left over to go to Disneyland and save for a future – that the pay cheques grow; they no longer shrink”.

A safe nation, he added, “means your community will be protected, your law enforcement will be respected, your criminals will be prosecuted”.

McCarthy also emphasised the scourge of the opioid fentanyl and the need to secure the US-Mexico border, an issue recently dominated by a stunt in which the Florida governor, Ron DeSantis, relocated migrants to Martha’s Vineyard in Massachusetts.

Indeed, Friday’s launch was notable for what McCarthy did not talk about: abortion rights, voting rights and the climate crisis, all of which are seen as political liabilities for his party. Democrats have been energised by June’s supreme court decision to overturn the constitutional right to abortion.

McCarthy sought to project party unity despite the uneasy coalition that makes up the House minority. It remains uncertain whether the House Freedom Caucus, including far-right members loyal to Trump, will support McCarthy for speaker.

Democrats dismissed the Commitment to America as a Trump platform in disguise. Pelosi said: “Today’s rollout is the latest evidence of House Republicans’ wholehearted commitment to Maga: going all in on an extremist agenda designed to greatly diminish Americans’ health, freedom and security.”

The House majority leader, Steny Hoyer, distributed a list of eight questions Democrats have for Republicans about their platform. It took aim at many House members’ staunch defence of Trump.

“Who won the 2020 Presidential Election?” the list asks. “Like President Trump, do you believe that the January 6 insurrectionists were engaged in ‘legitimate political discourse’ and should not be prosecuted for their violent actions? … Do you support defunding the FBI in retaliation for executing a search warrant at Mar-a-Lago?”

The list also seizes on other Republican policies. Hoyer asked:“Will Republicans pursue a nationwide abortion ban? … If given the chance, will you try again to repeal the Affordable Care Act and strip health-care access away from millions of Americans?”

Others joined the criticism. Reed Galen, co-founder of the Lincoln Project, an anti-Trump group, said: “This agenda is meaningless. Kevin McCarthy wants everyone to think he has a positive agenda for America – which nothing could be further from the truth.

“The ultra-Maga has total control of the party and is only interested in a national abortion ban and impeaching Joe Biden. The GOP is no longer interested in governing, they just want to obtain power and use it to destroy their enemies.”

McCarthy’s initiative contrasts with the Senate, where the minority leader, Mitch McConnell, has declined to put forward an agenda, preferring to simply run against Biden.

Republicans remain the favourites to win back the House and have history on their side: since the second world war, the president’s party has on average lost 29 House seats in each president’s first midterm election, according to the Council on Foreign Relations.

ICYMI

World markets plunge on growing recession fears

September 23, 2022

The pound fell to a 37-year low against the dollar. ©AFP

London (AFP) - Stock markets tumbled, the pound crashed against the dollar and oil prices slumped Friday on growing recession fears after central banks this week ramped up interest rates to fight decades-high inflation.

With price rises showing no solid sign of letting up, monetary policymakers have gone on the offensive, warning that short-term hits to economies are less painful than the long-term effects of not acting.

The Federal Reserve's decision Wednesday to lift borrowing costs by 0.75 percentage points for a third successive meeting was followed by a warning that more big rises were in the pipeline and that rates would likely come down only in 2024.

There were similar moves by central banks in other countries including Britain, Sweden, Norway, Switzerland, the Philippines and Indonesia -- all pointing to a dark outlook for markets.

Wall Street extended losses Friday while European equities sank in afternoon deals and Asia finished lower.

"A negative end to the week in Asia, and Europe has quickly followed as the prospect of much more tightening and a recession weighs on sentiment," said Craig Erlam, analyst at trading platform OANDA.

In a sign that recession expectations are rising, the 10-year US Treasury yield jumped to its highest level in a decade.

"It's a messy situation in the Treasury market to be sure and that is creating a messy situation for stocks.However, it's not just a US situation.Things are messy elsewhere," said Briefing.com analyst Patrick O'Hare.

The UK 10-year yield struck an 11-year high on Friday.

The British pound tumbled to a 37-year low under $1.10 as a tax-cutting budget sparked public finance concerns while recession fears mounted.

"Equity markets are also plunging on concerns that this (UK) package could further push inflation even higher, and thus make it more difficult to bring back down," said Michael Hewson, chief market analyst at CMC Markets UK.

In the eurozone, recession fears deepened as data showed its economic activity fell once again in September.

The S&P eurozone PMI dropped to 48.2 in September -- with a score under 50 representing economic contraction.

The euro hit a new two-decade low at $0.9751.

"A eurozone recession is on the cards as companies report worsening business conditions and intensifying price pressures linked to soaring energy costs," said Chris Williamson, chief business economist at S&P Global Market Intelligence.

He added that falling UK business activity this month indicates that the British economy is likely already in recession.

Recession fears also caused oil prices to fall, with the main US contract, WTI, falling below $80 for the first time since January.

Traders were keeping a close eye as well on developments following the Japanese finance ministry's intervention to support the yen, after it hit a new 24-year low of 146 against the dollar.

The first such intervention since 1998 helped strengthen the yen but it remained above 140.

Analysts warned the move was unlikely to have much long-term impact and the yen remained vulnerable owing to the Bank of Japan's refusal to tighten policy -- citing a need to boost the economy.

Key figures at around 1435 GMT

New York - Dow: DOWN 1.4 percent at 29,644.98 points

London - FTSE 100: DOWN 2.3 percent at 6,997.50 

Frankfurt - DAX: DOWN 1.9 percent at 12,294.22

Paris - CAC 40: DOWN 2.3 percent at 5,782.79

EURO STOXX 50: DOWN 2.3 percent at 3,349.75

Hong Kong - Hang Seng Index: DOWN 1.2 percent at 17,933.27 (close)

Shanghai - Composite: DOWN 0.7 percent at 3,088.77 (close)

Tokyo - Nikkei 225: Closed for a holiday

Pound/dollar: DOWN at $1.0972 from $1.1252 Thursday

Euro/dollar: DOWN at $0.9726 from $0.9839

Euro/pound: UP at 88.65 pence from 87.40 pence 

Dollar/yen: UP at 143.12 yen from 142.35 yen

West Texas Intermediate: DOWN 4.9 percent at $78.61 per barrel

Brent North Sea crude: DOWN 4.6 percent at $84.95 per barrel

burs-lth/ach  

Arms Makers Target Kids to Boost Sales

By Jonathan Ng

September 23, 2022

Originally published by Truthout.

In August, authorities in Hondo, Texas, revoked a permit for an NRA-affiliated group to hold its fundraiser on city property. The event featured a raffle for an AR-15, the same assault rifle that slaughtered 21 people in nearby Uvalde last May. At a city council meeting, families of the victims read the names of the slain, cradled their portraits, and denounced the arms lobby’s audacity. “It is a slap in the face to all of Uvalde,” explained Jazmin Cazares, who lost a sister in the massacre.

As gun ownership in the U.S. declines, arms makers have embraced the youth market to avoid industry contraction. Trade magazines such as Junior Shooters openly market rifles to children. And a recent lawsuit revealed that Remington sales tactics target minors.

The confrontation between Uvalde families and the NRA highlights the polarizing strategy and political heft of arms makers. Yet it also reveals their irreducibly economic interests. Although the industry claims to defend the Constitution and individual liberty, it has spawned a gun violence epidemic by liberalizing markets and aggressively pursuing profits.

The Political Turn

For half a century, arms makers have mobilized to destroy barriers to the industry’s growth and profits. Indeed, the modern gun lobby coalesced in response to mounting pressure for gun control.

In 1963, Lee Harvey Oswald assassinated President John F. Kennedy with a Mannlicher-Carcano, a surplus rifle that he purchased through the NRA’s American Rifleman magazine. Three years later, a sniper at the University of Texas at Austin killed 14 people, further fueling calls for reform and inspiring Peter Bogdanovich to film his classic thriller, Targets.

After shooters felled Martin Luther King Jr. and Robert Kennedy, President Lyndon Johnson signed the Gun Control Act (1968), imposing regulations on mail order purchases and prohibiting those with felony convictions, drug users and people with intellectual disabilities from buying arms.

Its passage triggered fierce industry resistance. In reaction, arms makers converted their economic clout into political power by wading into the nascent culture wars. They turned guns into potent symbols of American masculinity, grassroots democracy and rugged individualism by evoking the mythos of the frontier and feeding nostalgia for an imagined past of consensus, tradition and harmony.

By the late 1970s Harlon Carter led the NRA, while pioneering the brand of reactionary populism that Donald Trump later adopted. In particular, he employed the coded rhetoric of “law and order” to talk about race and promote arms sales in the same breath. Before joining border patrol, Carter murdered a Latino boy in Texas, brutally enforcing the color line.

Under his leadership, the industry propounded an “individual rights” interpretation of the Second Amendment, claiming that the Constitution enshrined the right of all citizens to own guns—a novel argument that held little water in legal circles.

Populist Gunslingers

In 1980, the NRA entered the electoral fray by endorsing Ronald Reagan for president. The decision had layers of symbolism; Reagan was a former actor who previously starred in the very Westerns that gave American gun culture much of its ideological content and allure.

Over the next two decades, the NRA became the vanguard of the New Right, as conservatives waged cultural warfare, mobilizing voters over topics such as gun control, abortion and gay marriage. To maintain popular militancy, the lobby fostered a sense of permanent crisis. NRA ads were shrill, featuring headlines like “How Much Tape Is Too Much When He Threatens to Kill You?”

Privately, officials bragged that they “pour gasoline on the fire.”

But their words have sown firestorms. In the spring of 1995, Vice President Wayne LaPierre claimed that “jack-booted Government thugs” are poised to “take away our constitutional rights, break in our doors, seize our guns, destroy our property and even injure and kill us.” Shortly afterward, the veteran NRA member Timothy McVeigh bombed a federal building in Oklahoma City, killing 168 people. McVeigh believed the government conspired to confiscate his guns.

The NRA navigated the fallout by naming Charlton Heston president. Under Heston, membership soared to 4 million, and the organization helped elect George W. Bush in 2000 by a razor-thin margin. The election instilled fear of the NRA among Democrats, who remained silent on gun control for the next decade.

Best known for starring in The Ten Commandments, Heston perfectly fused religious zeal with nationalist conviction. To the NRA faithful, he was an American Moses. He represented the endangered America that heartland conservatives saw in themselves; the leader guiding the remnant of the nation that remaine —like ancient Israel—exiles in their own country, while clinging to the Second Amendment as sacred scripture.

Indeed, Heston depicted gun owners as a threatened minority. “I remember when European Jews feared to admit their faith. The Nazis forced them to wear yellow stars as identity badges. So,” Heston asked, “what color star will they pin on gun owners’ chests?”

Industry Capture

Under his leadership, the lobby launched a legislative offensive. In 2003, the NRA guided passage of the Tiahrt Amendment, which inhibits the Bureau of Alcohol, Tobacco, Firearms and Explosives from publicly identifying crime weapons and sharing evidence with law enforcement. The next year, corporate pressure blocked renewal of the assault rifle ban. Then in 2005, the industry rammed the Protection of Lawful Commerce in Arms Act (PLCAA) through Congress, shielding companies from lawsuits when crimes involve their guns.

Ultimately, the industry’s biggest victory occurred in 2008, when the Supreme Court accepted its ample reading of the Second Amendment in D.C. v. Heller. Its fingerprints were all over the ruling. The case’s mastermind, Robert Levy, was a fellow at the Cato Institute, a conservative think tank co-founded by Charles Koch of the Koch brothers. And only months before the ruling, Charles Koch hosted Justices Antonin Scalia and Clarence Thomas at his personal retreat.

Arms makers had already embedded Scalia in their camp. In 2007, the World Forum on the Future of Sport Shooting Activities (WFSA), an international offshoot of the NRA, awarded him its “Sport Shooting Ambassador Award” — turning him into an honorary lobbyist. His majority opinion in Heller heavily cited scholarship that the NRA funded.

Meanwhile, the industry invested in lobbying. Between 2005 and April 2011, “corporate partners” contributed between $14.7 and $38.9 million to the NRA. While publicly denying the nonprofit received industry funds, LaPierre informed executives that it was “geared toward your company’s corporate interests.” Beretta, Glock, Ruger, and other firms generously contributed to its coffers. CEO James Debney of Smith & Wesson explained that the NRA is “our voice.”

Targeting Children

Yet gradually, a trail of mass shootings shifted public opinion and drained the industry’s legitimacy. In 2012, the Sandy Hook Elementary shooting in Newtown Connecticut became one of the deadliest in U.S. history, while gripping the community with muted symbolism: The sleepy town was the headquarters of the National Shooting Sports Foundation (NSSF)—the official industry lobby. A future NRA director, Joshua Powell, recalls preparing for combat. As “the bodies… were still bleeding,” Powell admits, he and his colleagues “quickly moved into fighting mode…. The adrenaline and seductive intensity of the fight was palpable. It was all I could focus on.”

Powell describes the immediate and growling response of Ackerman-McQueen, the NRA’s publicity firm: “We’re not giving a fucking inch.” Under its guidance, Vice President LaPierre assured the country, “The only thing that stops a bad guy with a gun is a good guy with a gun.”

Yet the massacre was a turning point, galvanizing a movement for gun control, fracturing faith in the industry line, and driving a wedge between cautious Democrats and the NRA. By then, the effects of gun violence were graphically clear. Between Columbine in 1999 and 2021, over 240,000 students were on campuses during shootings. In the 2017-2018 school year alone, at least 4.1 million children—and possibly up to 10 percent of the country’s student body—participated in lockdowns. Across the nation, kids scribbled out wills and texted loved ones goodbye.

Incredibly, Thompson/Center Arms had previously debuted a tiny gun for six-year-olds.

To temper public anger after Sandy Hook, the NRA promoted its Eddie Eagle program, which teaches children proper gun etiquette. The American Academy of Pediatrics concluded that it was ineffectual. Still, the NRA hired education specialist Lisa Monroe of Oklahoma University to revamp it in 2015. She only learned afterward that the industry proposed it as an alternative to child access laws. “If they had,” Monroe stressed, “I wouldn’t have anything to do with it.”

Founder Shannon Watts of Moms Demand Action asserts that Eddie Eagle is “a propaganda tool, similar to Joe Camel in marketing cigarettes to kids.” Her critique is painfully plausible. In recent decades, gun ownership has fallen drastically in the United States. While claiming to promote child safety, companies aggressively market to young customers, in order to ensure the social reproduction of the industry and its political base.

“What market isn’t tied to juniors?” Junior Shooters stressed the year of Sandy Hook. The NSSF and NRA sponsor the magazine, which targets children and features advertisements for assault rifles. One sponsor, Bushmaster Firearms, produced the AR-15 that tore apart Newtown; the title of one article was “Why I Love Bushmaster AR-15s… You Should, Too.”

Incredibly, Thompson/Center Arms had previously debuted a tiny gun for six-year-olds. Marlin appealed to children with a real-life “Marlin Man” (again the Joe Camel comparison beckons), while introducing a new rifle line. “These rifles are not just sized for kids,” the company boasted, “they’re completely designed for kids.”

Leading firms, such as Smith & Wesson and Beretta even offer “youth model” assault rifles, favoring plastic components that minimize recoil and flashy colors that attract children. And while making customers, they spread gun culture. Advertising imbues the weapons with emotional heft, fostering the fanatical attachment and easy access to arms that shooters from Columbine to Newtown have made notorious.

Simply put, children with assault rifles are not an anomaly. Rather, they embody two main industry trends. For decades, firms have both expanded and militarized the civilian market. In a country already saturated with guns, companies boost lethality to artificially stoke demand and attract new customers—including children. Firms rely on their orders to achieve economies of scale for military-grade weapons. And perversely, they sell arms to law enforcement to enhance their appeal in the larger and more profitable civilian market.

Globalizing the Second Amendment

Most media coverage focuses on domestic shootings, but the gun violence epidemic bleeds across borders. Beyond children, the industry vigorously pursues foreign clients. Under Secretary of State John Bolton and NRA officials led the U.S. delegation to the UN talks that culminated in the Arms Trade Treaty (2013), opposing any attempt to restrict arms flows. Later, Bolton himself became an NRA director and oversaw an export boom as national security advisor.

Industry officials even pursued the Russian market. In 2015, the NRA funded a trip to Russia for its directors, who illegally exploited it to pursue business deals and meet officials on the U.S. Treasury’s Specially Designated Nationals and Blocked Persons list.

Future NRA president Peter Brownell emphasized that he came seeking “an import or export opportunity.” Russian liaisons assured him that the trip “would DEFINITELY be profitable.” Afterward, a congressional investigation concluded that Russia manipulated the NRA to penetrate conservative circles and conduct espionage.

Yet the industry’s shadow hangs heaviest south of the border. Approximately 70 percent of gun crimes in Mexico involve U.S. arms, which flow in an iron torrent over the Rio Grande. Even European firms like Glock and Beretta exploit U.S. law to circumvent export controls in their own countries and inundate the region with bullets. When the U.S. assault weapons ban elapsed in 2004, homicide rates in Mexico skyrocketed. That year, only one-fourth of homicides involved a gun; by 2019, the figure was 72 percent.

As cartels and authorities pursued a relentless arms race, Mexico’s homicide rate topped 164,000 people in seven years. In 2014, U.S. guns notoriously facilitated the disappearance of 43 students in Ayotzinapa, who were about to commemorate the Tlatelolco Massacre—another atrocity involving U.S. arms.

Still, the industry blocked reform. The NRA announced a “battle” to guarantee legislators “do not use Mexico as an excuse to sacrifice our Second Amendment rights.” That fight is ongoing. Last year, Mexico sued 11 arms firms in federal court in Boston, claiming they knowingly fuel the violence.

In sum, the industry has fostered violence in the Americas, where six countries alone accounted for over half the globe’s gun-related deaths in 2018. Yet while dismantling barriers to accumulation, the NRA’s conservative base constructs border walls for the very refugees fleeing the bloodshed.

Value in Motion

In 2018, a teenager at Marjory Stoneman Douglas High School in Florida followed a worn-out script, slaughtering 17 people with an AR-15. But common sense had evolved, and the country was in a boiling mood. The next month, students in 90 percent of voting districts protested arms violence. Gun control activists outspent the industry for the first time that year in elections.

By then, the organization was in shambles, facing bankruptcy, sex scandals and corruption charges. Powell admits that the “waste and dysfunction” was “staggering.” Despite the organization’s nonprofit status, directors practiced nepotism, siphoned funds and funneled contracts to friends. A former senior IRS official called its case “extraordinary”—“one of the broadest arrays of likely transgressions that I’ve ever seen.”

The disgraceful saga reached its climax on January 6, 2021, as protesters converged on the Capitol to contest the presidential election and reinstall Donald Trump, who received massive industry donations. Days before, LaPierre warned about “armed government agents storming your house,” while exhorting conservatives to “STOP GUN CONFISCATION.” In response, gun rights activists invaded the Capitol, including Richard Barnett, who seized House Speaker Nancy Pelosi’s office, and William Calhoun, who declared he would sling “enough hot lead” to stack bodies “like cordwood.”

Since then, the January 6 coup and an interminable string of mass shootings has electrified demands for reform. This summer, President Joe Biden signed a bill that bolsters background checks, mental health care and school security. And a judge ruled that a lawsuit against the NRA for violations of its nonprofit status can continue.

Yet the industry’s political base remains powerful, and the race for accumulation persists. For if the subtext of gun rights includes white nationalism and virulent anti-statism, it also includes profit. From the industry’s standpoint, shattering bullets are simply value in motion. In many ways, this history is a withering commentary on the corrosive power of capitalism; the mirror of a society where child sacrifice is tribute to the Second Amendment, and the Second Amendment protects corporate profit. As the U.S. further polarizes, the gun debate illuminates dividing lines with fire and lead.

The author would like to thank Sarah Priscilla Lee of the Learning Sciences Program at Northwestern University for reviewing this article.

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