Arms industry

From Wikipedia, the free encyclopedia
  (Redirected from Arms dealing)
Jump to: navigation, search
Workers assemble Browning-Inglis Hi-Power pistols at the John Inglis munitions plant, Canada, April 1944

The arms industry is a global business that manufactures weapons and military technology and equipment. It consists of commercial industry involved in research, development, production, and the service of military material, equipment, and facilities. Arms producing companies, also referred to as defense contractors or military industry, produce arms mainly for the armed forces of states. Departments of government also operate in the arms industry, buying and selling weapons, munitions and other military items. Products include guns, ammunition, missiles, military aircraft, military vehicles, ships, electronic systems, and more. The arms industry also conducts significant research and development and provides other logistics and operations support.

It is estimated that yearly, over 1.5 trillion US dollars are spent on military expenditures worldwide (2.7% of World GDP).[1] This represents a decline from 1990 when military expenditures made up 4% of world GDP. Part of this goes to the procurement of military hardware and services from the military industry. The combined arms sales of the top 100 largest arms producing companies amounted to an estimated $315 billion in 2006.[2] In 2004 over $30 billion were spent in the international arms trade (a figure that excludes domestic sales of arms).[3] The arms trade has also been one of the sectors impacted by the credit crunch, with total deal value in the market halving from US$32.9 billion to US$14.3 billion in 2008.[4] Many industrialized countries have a domestic arms industry to supply their own military forces. Some countries also have a substantial legal or illegal domestic trade in weapons for use by its citizens. An illegal trade in small arms is prevalent in many countries and regions affected by political instability. The Small Arms Survey estimates 875 million small arms in circulation worldwide, produced by more than 1,000 companies from nearly 100 countries.[5]

Contracts to supply a given country's military are awarded by the government, making arms contracts of substantial political importance. The link between politics and the arms trade can result in the development of what U.S. President Dwight D. Eisenhower described as a military-industrial-congressional complex, where the armed forces, commerce, and politics become closely linked. The European defence procurement is more or less analogous to the U.S. military-industrial complex. Various corporations, some publicly held, others private, bid for these contracts, which are often worth many billions of dollars. Sometimes, such as the contract for the new Joint Strike Fighter, a competitive tendering process takes place, where the decision is made on the merits of the design submitted by the companies involved. Other times, no bidding or competition takes place.

Unimog truck at IDEF in 2007.

History[edit]

Painting shells in a shell filling factory during World War I.

Trade in arms and technological diffusion is as old as the history of war itself. During the early modern period, France, England, Netherlands and some states in Germany became self-sufficient in arms production, with diffusion and migration of skilled workers to more peripheral countries such as Portugal and Russia.

The modern arms industry emerged in the second half of the nineteenth century as a product of the creation and expansion of the first large military-industrial companies. As smaller countries (and even newly industrializing countries like Russia and Japan) could no longer produce cutting-edge military equipment with their indigenous resources and capacity, they increasingly began to contract the manufacture of military equipment, such as battleships, artillery pieces and rifles to foreign firms.

In 1854, the British government awarded a contract to the Elswick Ordnance Company of industrialist William Armstrong for the supply of his latest breech loading rifled artillery pieces. This decision galvanised the private sector into weapons production, with the surplus being increasingly exported to foreign countries. Armstrong became one of the first international arms dealers, selling his weapon systems to governments across the world, from Brazil to Japan.[6] In 1884 he opened a shipyard at Elswick to specialise in warship production—at the time, it was the only factory in the world that could build a battleship and arm it completely.[7] The factory produced warships for many navies, including the Imperial Japanese Navy—several Armstrong cruisers played an important role in defeating the Russian fleet at the Battle of Tsushima in 1905.

In 1885, France decided to capitalize on this increasingly lucrative form of trade and repealed its ban on weapon exports. The regulatory framework for the period up to the First World War was characterized by a laissez-faire policy that placed little obstruction in the way of weapons exports. Due to the carnage of World War I, arms traders began to be regarded with odium as "merchants of death", and were accused of having instigated and perpetuated the war in order to maximise their profits from arms sales. An inquiry into these allegations in Britain failed to find evidence to support these allegations. However, the sea change in attitude about war more generally, meant that governments began to control and regulate the trade themselves.

Stacks of shells in the shell filling factory at Chilwell during World War I.

The volume of the arms trade greatly increased during the 20th century and it began to be used as a political tool, especially during the Cold War where the United States and the USSR supplied weapons to their proxies across the world, particularly third world countries (see Nixon Doctrine).[8]

Sectors[edit]

The AK series of weapons have been produced in greater numbers than any other firearm and have been used in conflicts all over the world.

Land-based weapons[edit]

This category includes everything from light arms to heavy artillery, and the majority of producers are small. Many are located in third world countries. International trade in handguns, machine guns, tanks, armored personnel carriers, and other relatively inexpensive weapons is substantial. There is relatively little regulation at the international level, and as a result, many weapons fall into the hands of organised crime, rebel forces, terrorists, or regimes under sanctions.[9]

Small arms[edit]

The Control Arms Campaign, founded by Amnesty International, Oxfam, and the International Action Network on Small Arms, estimated in 2003 that there are over 639 million small arms in circulation, and that over 1,135 companies based in more than 98 different countries manufacture small arms as well as their various components and ammunition.[10]

Aerospace systems[edit]

A T-45 Goshawk on the assembly line at McDonnell Douglas.

Encompassing military aircraft (both land-based and naval aviation), conventional missiles, and military satellites, this is the most technologically advanced sector of the market. It is also the least competitive from an economic standpoint, with a handful of companies dominating the entire market. The top clients and major producers are virtually all located in the western world and Russia, with the United States easily in first place. Prominent aerospace firms include Dassault Aviation, Sukhoi, Mikoyan, EADS, Finmeccanica, Thales Group, Lockheed Martin, Northrop Grumman, Boeing, and BAE Systems. There are also several multinational consortia mostly involved in the manufacturing of fighter jets, such as the Eurofighter. The largest military contract in history, signed in October 2001, involved the development of the Joint Strike Fighter.[9]

Naval systems[edit]

All of the world's major powers maintain substantial maritime forces to provide a global presence, with the largest nations possessing aircraft carriers, nuclear submarines and advanced anti-air defense systems. The vast majority of military ships are conventionally powered, but some are nuclear-powered. There is also a large global market in second-hand naval vessels, generally purchased by developing countries from Western governments.[9]

World's largest defense budgets[edit]

This is a list of the ten countries with the highest defence budgets for the year 2013. The information is from the Stockholm International Peace Research Institute.

List by the Stockholm International Peace Research Institute (2013)[11]
Rank Country Spending ($ Bn.) % of GDP World share (%)
World total 1747.0 2.4 100
1 United States United States 640.0 3.8 36.6
2 China People's Republic of China 188.0 2.0 10.8
3 Russia Russia 87.8 4.1 5.0
4 Saudi Arabia Saudi Arabia 67.0 9.3 3.8
5 France France 61.2 2.2 3.5
6 United Kingdom United Kingdom 57.9 2.3 3.3
7 Germany Germany 48.8 1.4 2.8
8 Japan Japan 48.6 1.0 2.8
9 India India 47.4 2.5 2.7
10 South Korea South Korea 33.9 2.8 1.9
11 Italy Italy 32.7 1.6 1.9
12 Brazil Brazil 31.5 1.4 1.8
13 Australia Australia 24.0 1.6 1.4
14 Turkey Turkey 19.1 2.3 1.1
15 United Arab Emirates United Arab Emirates 19.0 4.7 1.1

World's largest arms exporters[edit]

The units in this table are so-called trend indicator values expressed in millions of U.S. dollars at 1990s prices. These values do not represent real financial flows but are a crude instrument to estimate volumes of arms transfers, regardless of the contracted prices, which can be as low as zero in the case of military aid. Ordered by descending 2013 values. The information is from the Stockholm International Peace Research Institute.[11]

2013 rank Supplier Arms exports
1  Russia 8283
2  United States 6153
3  China 1837
4  France 1489
7  United Kingdom 1394
5  Germany 972
6  Italy 807
8  Israel 773
9  Spain 605
10  Ukraine 589
11  Sweden 505
12  Belarus 338
13  South Korea 307
14  Netherlands 302
15   Switzerland 205


The units in this table are so-called trend indicator values expressed in millions of U.S. dollars at 1990s prices. These values do not represent real financial flows but are a crude instrument to estimate volumes of arms transfers, regardless of the contracted prices, which can be as low as zero in the case of military aid. Ordered by descending 2000–2010 values. The information is from the Stockholm International Peace Research Institute.[11]

2001–12 Rank Supplier 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
1  United States 5908 5229Decrease 5698 6866 6700Decrease 7453 8003 6288Decrease 6658 8641 9984 8760Decrease
2  Russia 5896 5705Decrease 5236Decrease 6178 5134Decrease 5095Decrease 5426 5953 5575Decrease 6039 7874 8003
3  Germany 850 916 1713 1105Decrease 2080 2567 3194 2500Decrease 2432Decrease 2340Decrease 1206Decrease 1193Decrease
4  France 1297 1368 1345Decrease 2219 1724Decrease 1643Decrease 2432 1994Decrease 1865Decrease 1834Decrease 2437 1139Decrease
5  China 499 509 665 292Decrease 303 597 430Decrease 586 1000 1423 1354 1783
6  Ukraine 700 311Decrease 442 200Decrease 290 553 728 330Decrease 320Decrease 201Decrease 484 1344
7  United Kingdom 1368 1068Decrease 741Decrease 1316 1039Decrease 855Decrease 1018 982Decrease 1022 1054 1070 863Decrease
8  Italy 880 191Decrease 526 314Decrease 538 432Decrease 366Decrease 454 383Decrease 806 1046 847Decrease
9  Spain 7 120 150 56Decrease 108Decrease 843 590Decrease 610 998 513Decrease 927 720Decrease
10  Israel 203 239 342 209Decrease 583 1187 1326 530Decrease 545 503Decrease 531 533
11  Sweden 216 426 341Decrease 212Decrease 774 502Decrease 684 417Decrease 514 806Decrease 686Decrease 496Decrease
12  Canada 129 170 263 265 226Decrease 226Steady 334 227 169Decrease 258 292 276Decrease
13   Switzerland 193 157 181 243 246 285 301 482 255Decrease 137Decrease 297 210Decrease
14  South Korea 165 N/A 100 29Decrease 48 94 220 80Decrease 163 95Decrease 225 183Decrease
Sgraffito at the Lambert Sevart weapons factory, in Liege (Belgium) (early 20th Century).

Next to SIPRI there are several other sources that provide data on international transfers of arms. These include national reports by national governments about arms exports, the UN register on conventional arms and an annual publication by the U.S. Congressional Research Service that includes data on arms exports to developing countries as compiled by U.S. intelligence agencies. A list of such sources can be found at the SIPRI website.[12] Due to the different methodologies and definitions used different sources often provide significantly different data. For example, according to Statistisk sentralbyrå (Norway state statistics), Norway exports a greater value (in USD) of arms than many of the nations listed above.

Some of the differences are possibly due to deliberate over- or under-reporting by some of the sources. Governments may claim high arms exports as part of their role in marketing efforts of their national arms industry or they may claim low arms exports in order to be perceived as a responsible international actor.

As of 2008, Britain has become the worlds leading developer of arms with British company BAE Systems.[13] Defence group BAE Systems is the first company outside the United States to reach the top position, thanks to a deal with the Pentagon for mine-resistant vehicles to be used in Iraq and Afghanistan. According to the Stockholm International Peace Research Institute, a defence think tank, the former British Aerospace group's arms sales are ahead of American market leaders Lockheed Martin and Boeing. The report reveals BAE's U.S. subsidiary was alone responsible for 61.5% of the group's arms sales and around 58.5% of total group sales. This demonstrates BAE's increasing reliance on orders for conventional weapons as the United States cuts back on its nuclear arsenal. The British figures were also boosted by orders for Eurofighter Typhoon jets from Saudi Arabia.

World's largest arms importers[edit]

The units in this table are so-called trend indicator values expressed in millions of U.S. dollars. These values do not represent real financial flows but are a crude instrument to estimate volumes of arms transfers, regardless of the contracted prices, which can be as low as zero in the case of military aid.

2013 rank Recipient Arms imports
1  India 8283
2  United Arab Emirates 6153
3  China 1534
4  Saudi Arabia 1486
7  Pakistan 1002
5  Azerbaijan 921
6  Indonesia 774
8  United States 759
9  Bangladesh 672
10  Taiwan 633
11  Turkey 604
12  Egypt 501
13  Oman 490
14  Venezuela 476
15  United Kingdom 438

List of major weapon manufacturers[edit]

For a complete list, see List of modern armament manufacturers.
For a Top-Ten list, see List of defense contractors.

Private military contractors are private companies that provide logistics, manpower, and other expenditures for a military force.

Major arms industry corporations by nation[edit]

Largest arms industry companies[edit]

This is a list of the world's top 10 arms manufacturers and other military service companies. The information is based on a list published by the Stockholm International Peace Research Institute for 2012.[14] The list provided by the SIPRI excludes companies based in China.

Rank Company Country Arms sales (US$ m.) Total company employment
1 Lockheed Martin  United States 36,000 120,000
2 Boeing  United States 27,610 174,400
3 BAE Systems  United Kingdom 26,850 88,200
4 Raytheon  United States 22,500 67,800
5 General Dynamics  United States 20,940 92,200
6 Northrop Grumman  United States 19,400 68,100
7 Airbus Group  European Union 15,400 140,000
8 United Technologies Corporation  United States 13,460 218,300
9 Finmeccanica  Italy 12,530 67,408
10 L-3 Communications  United States 10,840 51,000

Institutes participating in weapon research and warfare simulation[edit]

Arms control[edit]

Oscar Arias Sanchez President of Costa Rica (awarded the Nobel Peace Prize in 1987 for his efforts to end civil wars across Central America through the Esquipulas II Accords) has stated:

When a country decides to invest in arms, rather than in education, housing, the environment, and health services for its people, it is depriving a whole generation of its right to prosperity and happiness. We have produced one firearm for every ten inhabitants of this planet, and yet we have not bothered to end hunger when such a feat is well within our reach. Our international regulations allow almost three-quarters of all global arms sales to pour into the developing world with no binding international guidelines whatsoever. Our regulations do not hold countries accountable for what is done with the weapons they sell, even when the probable use of such weapons is obvious.[16]

International treaties for arms control[edit]

Global weapons sales from 1950-2006
  • The Arms Trade Treaty was adopted by the UN General Assembly on 2 April 2013. On entry into force it will establish legally binding international standards for the international transfer of conventional arms, ammunition and parts and components therefor.
  • The Missile Technology Control Regime (MTCR) is an informal and voluntary partnership between 34 countries to prevent the proliferation of missile and unmanned aerial vehicle technology capable of carrying a 500 kg payload at least 300 km.
  • The Limitation of Naval Armament included many separate treaties. In general, the treaties involved the United States, United Kingdom, Japan, and France.
  • The Convention on Cluster Munitions (CCM) is an international treaty that prohibits the use of cluster bombs, a type of explosive weapon which scatters submunitions ("bomblets") over an area.
  • The Outer Space Treaty, formally known as the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies, is a treaty that forms the basis of international space law.
  • The Ottawa Treaty or the Mine Ban Treaty, formally the Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Anti-Personnel Mines and on their Destruction, completely bans all anti-personnel landmines (AP-mines).
  • The New START Treaty (for Strategic Arms Reduction Treaty) (Russian: СНВ-III) is a bilateral nuclear arms reduction treaty between the United States and the Russian Federation that was signed in Prague on April 8, 2010.
  • The Protocol for the Prohibition of the Use in War of Asphyxiating, Poisonous or other Gases, and of Bacteriological Methods of Warfare, usually called the Geneva Protocol, is a treaty prohibiting the first use of chemical and biological weapons. It was signed at Geneva on June 17, 1925, and entered into force on February 8, 1928. It was registered in League of Nations Treaty Series on September 7, 1929.
  • The Chemical Weapons Convention (CWC) is an arms control agreement which outlaws the production, stockpiling and use of chemical weapons.
  • The Biological Weapons Convention (or Biological and Toxin Weapons Convention) was the first multilateral disarmament treaty banning the production of an entire category of weapons. It was the result of prolonged efforts by the international community to establish a new instrument that would supplement the 1925 Geneva Protocol.

The European Council stated to the United Nations General Assembly:

We are committed to upholding, implementing and further strengthening the multilateral disarmament and non-proliferation framework in the fight against threats which are tending to escape the control of national sovereignty, the challenges deriving from destabilising accumulation and spread of small arms and light weapons, from illicit or irresponsible arms trade, and from the proliferation of weapons of mass destruction, which are creating new and growing hot-spots of international tension. In this regard, the EU welcomes the growing support in all parts of the world for an International Arms Trade Treaty and is firmly committed to this process.[17]

See also[edit]

References[edit]

  1. ^ World Military Spending. www.globalissues.org. Retrieved on 2012-05-09.
  2. ^ Stockholm International Peace Research Institute. Sipri.org. Retrieved on 2012-05-09.
  3. ^ Arms trade key statistics. BBC News (2005-09-15). Retrieved on 2012-05-09.
  4. ^ Defence sector deal-making is finding itself in a war zone, warns report. 12 March 2009. BriskFox. Briskfox.com. Retrieved on 2012-05-09.
  5. ^ [1]
  6. ^ "William George Armstrong (1810–1900)". 
  7. ^ Dougan, David (1970). The Great Gun-Maker: The Story of Lord Armstrong. Sandhill Press Ltd. ISBN 0-946098-23-9. 
  8. ^ Stohl, Rachel; Grillot, Suzette (2013). The International Arms Trade. Wiley Press. Retrieved 2013-02-07. 
  9. ^ a b c International Defense Industry at the Wayback Machine (archived July 26, 2011). www.fpa.org
  10. ^ Debbie Hillier, Brian Wood (2003). "Shattered Lives – the case for tough international arms control" (PDF). Control Arms Campaign. p. 19. Retrieved 2009-03-28. 
  11. ^ a b c "The 15 countries with the highest military expenditure in 2013 (table)" (PDF). Stockholm International Peace Research Institute. Retrieved 14 April 2014. 
  12. ^ armstrad — www.sipri.org. Sipri.org. Retrieved on 2012-05-09.
  13. ^ The SIPRI Top 100 arms-producing companies, 2008 — www.sipri.org. Sipri.org. Retrieved on 2012-05-09.
  14. ^ "The SIPRI Top 100 arms-producing and military services companies in the world excluding China". Stockholm International Peace Research Institute. 2012. Retrieved February 9, 2014. 
  15. ^ TNO Defence, Security and Safety at the Wayback Machine (archived September 23, 2006). tno.nl
  16. ^ Anonymous. The Global Arms Trade: Strengthening International Regulations. Interview with Oscar Arias Sanchez. Harvard International Review Date: Tuesday, July 1, 2008 http://www.allbusiness.com/government/government-bodies-offices/11664335-1.html accessed 10 Feb 2010
  17. ^ EU@UN – EU Presidency Statement – United Nations 62nd General Assembly: General Debate. Europa-eu-un.org. Retrieved on 2012-05-09.

External links[edit]