Global arms sales surged in pandemic – International

The global arms industry proved immune to Covid-19 and continued to expand its business and grow despite border closures, crumbling supply chains and difficulties in international trade caused by the outbreak. pandemic.

The latest report on the world’s 100 largest arms manufacturers, made by the Stockholm International Peace Research Institute (Sipri), shows that the arms industry had its 6th consecutive year of growth and, if it weren’t for the fall of sales of Russia and gives Francewould have broken a record since 2015.

The total value of sales was US$ 531 billion (about R$ 3 trillion), after six straight years of increases. The trade volume of the top 100 weapons manufacturers has grown by more than 15% in the last five years.

The flourishing of the arms industry was spurred by regional tensions and ongoing military campaigns. American and European companies dominate the sector, accounting for 82.4% of all arms sales, and the highlight was the Chinese military industry growth.

You USA maintained their global hegemony: the 41 US companies included among the world’s 100 largest represented 54% of total sales last year, with US$ 285 billion (R$ 1.6 trillion), up 1.9%.

As has been the case since 2018, the top five companies are American: Lockheed Martin, Raytheon, Boeing, Northrop Grumman and General Dynamics, in descending order. The US arms industry going through a wave of mergers and acquisitions, mainly in the space sector, highlights Sipri, citing the example of Northrop and KBR.

In the report, Sipri researcher Alexandra Marksteiner said she was especially surprised by the data for 2020, the first year of the pandemic: “We saw an overall increase of 1.3%”. According to her, “the giants of the industry were largely protected by the demand of governments for military goods and services”. She adds that “in many parts of the world, military spending has increased and some governments have accelerated payments to industry to mitigate the impact of the crisis”.

delays

Despite the widespread increase, the pandemic has caused some companies to experience supply chain disruptions and delivery delays. Others, such as the French company Thales, which specializes in electronic systems, suffered drops in sales due to the confinement decreed in dozens of countries.

Sipri is a study center dedicated to conflict research, armament and disarmament, in addition to arms control. Founded in 1966, it collects information from open sources to provide data, analysis and recommendations. The institute understands “weapons sales” as the marketing of military products and research and development services to military customers at home and abroad.

“Military spending is very much related to conflicts and the concerns of countries,” Aude Fleaurant, director of Sipri’s weapons and military spending program, told the BBC. “The growth in arms sales was expected and was driven by the implementation of major new weapons programs, ongoing military operations in several countries and persistent regional tensions. All of this leads to greater demand,” she said.

Intern consumption.

This estimate concerns only a part of the business. Sales to the domestic market are not included. “The world arms trade represents only a minority of the total production of the arms industry on the planet. Although companies from smaller countries are more dependent on exports, the reality is that most of the sales made by large US manufacturers and other powers are to their own countries”, explains Samuel Perlo-Freeman, from Sipri.

According to him, these large local contracts between industry and the State encompass not only the sale of equipment, but also the provision of military services. “Therefore, the companies’ total sales figures for equipment and services are much higher than any estimates for the global arms trade,” says Perlo-Freeman. Sipri estimates that military expenditures for all countries have exceeded US$1.7 trillion, on average, in the last three years – about US$260 for every inhabitant on the planet.

Chinese growth.

Experts say the surprising thing about the new report is how the arms companies of emerging powers are becoming increasingly important, India and China especially. Indians have three companies in the top 100whose combined sales total 1.2% – on par with South Korea. India has not signed the international non-proliferation treaty.

In China, there are even more weapons coming out of factories. Sales by Chinese manufacturers have continued to grow since Sipri began including data on Chinese companies in its 2015 annual report. The five Chinese companies on the list are benefiting from the Chinese Armed Forces modernization program, and their shipments now account for 13% of the top 100 sales.

Marksteiner, one of the authors of the survey, says that the American and Chinese hegemony in the 2020 ranking is due to “the two countries currently implementing large-scale military modernization programs and have increased their military spending in recent years”.

The five Chinese companies included in the ranking sold US$ 66.8 billion, which represents 1.5% more in the annual comparison. Researcher Nan Tian explains in the study center’s report that “Chinese companies have benefited from the modernization programs promoted by Beijing and the focus on civil-military fusion”, becoming “one of the most advanced producers of military technology in the world”. .

Tian cites China’s largest arms conglomerate as an example. “There was a sale of a satellite system that Norinco developed and is used for both military and civilian purposes,” he says.

Simone Wisotzki, a weapons control specialist at the Peace Research Institute Frankfurt (Prif), notes that the boundary between civil and military technologies is becoming increasingly blurred. “Information technology can no longer be separated from weapons technology,” she said.

In its new report, Sipri specifically looks at the growing role tech companies play in the arms business. The document says that, in recent years, some giants of the Silicon Valleylike Google, Microsoft and Oracle, sought to deepen their involvement in the arms business and were rewarded with lucrative contracts.

The best example is the $22 billion deal between Microsoft and the US Department of Defense. The company was contracted to supply the U.S. Army with a type of super goggles, called the Integrated Visual Augmentation System, that will provide soldiers with real-time strategic information about the battlefield.

The US military’s interest in Silicon Valley is easy to explain. “They realize that in these enabling new technologies, whether it’s artificial intelligence, machine learning or cloud computing, the experience of these companies is far beyond what you would see in traditional companies in the arms industry,” said Marksteiner. “There is a chance that some of these companies will end up in the top 100 at some point.”

Russia.

Along with France, the biggest drop in arms sales was recorded by Russia. Joint sales by the nine Russian companies in the top 100 fell 6.5% a year to $28.2 billion, following the downward trend that began in 2017, mainly due to the end of the state’s weapons program. Analysts believe that this drop, to just 5% of total sales among the top 100 companies, is directly related to the fact that India and China have developed promising weapons factories. Both countries were formerly major buyers of Russian weaponry.

Markus Bayer, a political scientist at the Bonn International Center for Conflict Studies (BICC), told Deutsche Welle that the first Chinese aircraft carrier was based on a Soviet ship purchased by Beijing in 1998. The Chinese vessel, called the Liaoning, entered in service in 2012.

“A lot has happened since then,” Bayer said. “Over the past 20 years, China has not only caught up with Russia in terms of aircraft carrier production capacity, it has surpassed it. Russia did not put a single aircraft carrier into service at that time. And now India has also developed its own aircraft carrier, based on what was originally Soviet technology.”

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