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The arms industry is a global industry and business which manufactures and sells weapons and military technology and equipment. Arms producing companies, also referred to as defence companies or military industry, produce arms mainly for the armed forces of states. Products include guns, ammunition, missiles, military aircraft, military vehicles, ships, electronic systems, and more. The arms industry also conducts significant research and development.

It is estimated that yearly, over 1 trillion dollars are spent on military expenditures worldwide (2% of World GDP).[1] 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$32.9bn to US$14.3bn 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. The illegal trade in small arms is prevalent in many countries and regions affected by political instability.

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 US President Dwight D. Eisenhower described as a military-industrial complex, where the armed forces, commerce, and politics become closely linked. 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.

In the Cold War Era, arms exports were used by both the Soviet Union and the United States to influence their standings in other countries, particularly Third World Countries. Since the fall of the Soviet Union, global arms exports initially fell slightly, but have since 2003 grown again, and now come close to Cold War levels.[5] The United States is the overall top supplier of weapons. The United States is also the top supplier of weapons to the developing world, accounting for around 36% of worldwide weapons sales, followed by the United Kingdom, Russia, Germany and China.[6][7]

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[8].

Contents

Sectors

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

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 rebel forces, terrorists, or regimes under sanctions.[9]

Aerospace systems

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, with the United States easily in first place. Prominent aerospace firms include Dassault Aviation, EADS, Finmeccanica, Thales Group, Lockheed Martin, Boeing, and Britain's 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

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 defence budgets

This is a list of the ten countries with the highest defence budgets for the year 2008. The information is from the Stockholm International Peace Research Institute [10]. Total world spending amounted to $1.464 trillion USD in 2008.

Rank Country Spending ($ b.) World Share (%)
World Total 1464.0 100
1 United States United States 607.0 41.5
2 People's Republic of China China 84.9a 5.8a
3 France France 65.7 4.5
4 United Kingdom United Kingdom 65.3 4.5
5 Russia Russian Federation 58.6a 4.0a
6 Germany Germany 46.8 3.2
7 Japan Japan 46.3 3.2
8 Italy Italy 40.6 2.8
9 Saudi Arabia Saudi Arabia 38.2 2.6
10 India India 30.0 2.1
Note a: SIPRI estimate

World's largest arms exporters

The unit in this table are so-called trend indicator values expressed in millions of US 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. Ordered by descending 2007 values.

Current Rank Supplier 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
1 United States USA 7,505 5,801 4,984 5,581 6,616 7,026 7,821 7,454
2 Russia Russia 4,190 5,631 5,458 5,355 6,400 5,576 6,463 4,588
3 Germany Germany 1,622 825 910 1,707 1,017 1,879 2,891 3,395
4 France France 1,033 1,235 1,342 1,313 2,267 1,688 1,586 2,690
5 Ukraine Ukraine 280 649 440[11] 530[11] 600[12] 700 1,000[13] 1,395[13]
6 Netherlands Netherlands 259 192 243 342 218 611 1,575 1,355
7 United Kingdom UK 1,356 1,116 772 624 1,143 871 978 1,151
8 South Korea South Korea 100 240 140 140 410 260 260 844
9 Italy Italy 192 224 407 321 216 787 860 562
10 Sweden Sweden 46 7 120 158 73 116 803 529
11 Israel Israel 308 850 125 468 287 536 472 414
12 People's Republic of China China PR 228 498 544 553 271 223 564 355
13 Canada Canada 83 129 182 279 305 193 227 343
14 India India 4 6 18 17 35 75 105 242[14]
15 Czech Republic Czech Republic 80 54 73 94 112 109 117 238[15]
16 Spain Spain 321 298 365 309 533 244 258 238
17 Switzerland Switzerland 104 120 109 139 201 166 144 211
18 Bulgaria Bulgaria N/A N/A N/A 250[16] N/A 190[17] 149[18] 192[19]
19 Serbia Serbia N/A N/A N/A N/A N/A 176.4 346.3 299.8[20] 400 535[21]

The information is also from the Stockholm International Peace Research Institute or from the national defence commissions where available and is updated at least once a year.

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 US Congressional Research Service that includes data on arms exports to developing countries as compiled by US intelligence agencies. A list of such sources can be found at the SIPRI website. [2] 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.

List of major weapon manufacturers

Major arms industry corporations by nation

Control and international treaty

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.[22]

Institutes participating in weapon research and warfare simulation

Ethical dimension

For many people, arms exports pose an ethical challenge, as they see supplying the weapons for a conflict as morally akin to becoming involved with negligible personnel, national or corporate risk. Some view the arms industry as a means of profiting from war and death when failure to supply arms could lead to an early disengagement.

On the other hand, exporting arms to groups (or nations) with "laudable" goals—e.g. a rebel group overthrowing a fascist regime—can be an invaluable equalizer in the conflict. And there is no shortage of parties to a conflict that can wreak incalculable destruction without the assistance of modern armaments—for instance, the Hutus of the Rwandan Genocide conducted most of their carnage using simple machetes and other low-tech implements, but there are reports from IALANA that firearms were used together with machetes.

Of course—and this is endemic of nearly every debate over arms trade—the terminology used and the people it refers to can be frustratingly fluid. As years pass, governments decide on new "interests" and circumstances change accordingly. "Freedom fighters" become "insurgents". "Terrorists" become "invaluable allies", and "religious zealots" morph into "agents of stability". Entire nations, to use the parlance of the early 21st century, can go from the "Coalition of the Willing" to the "Axis of Evil" in very little time, and every change affects policy and the distribution of arms in the world.

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. Our regulations do not apply to arms transfers to individuals, even when the risk for wanton destruction is just as severe as in a transaction between states. Our regulations do not cover all conventional weapons, even though helicopter gunships and armed Humvees can be just as deadly as pistols and rifles. Many of the existing regional, sub-regional, and multilateral arrangements lack clear definitions of the arms to which they apply; they lack a framework for enforcement, monitoring, and verification; and most importantly, they lack consistent political will by signatory states.[23]

In popular culture

Numerous movies (for example Lord of War), TV shows, comics, video games, etc. have featured arms dealing. In the Marvel and DC universe, many companies (such as Stark International and Wayne Enterprises/Luthor Corp respectively) have an arms manufacturing division.

The character Destro in the G.I. Joe comics/toon/toyline has his own private army, The Iron Grenadiers and runs MARS (Military Armament Research Syndicate). MARS is the primary supplier to the Cobra and has sold weapons/vehicles to the US government. The GI Joe team has their weapons/vehicles supplied by the US government, and thus their weapons/vehicles are unknowningly made by MARS. In the comics, the scientist Dr. Mindbender his Battle Android Trooper was made from MARS parts.

See also

References

  1. ^ www.globalissues.org
  2. ^ Stockholm International Peace Research Institute
  3. ^ BBC
  4. ^ Defence sector deal-making is finding itself in a war zone, warns report. 12 March 2009. BriskFox
  5. ^ www.sipri.org
  6. ^ US drives world military spending to record high. 12/06/2006. ABC News Online
  7. ^ U.S. leads arms sales to developing countries
  8. ^ Debbie Hillier, Brian Wood (2003). "Shattered Lives - the case for tough international arms control" (PDF). Control Arms Campaign. pp. 19. https://www.controlarms.org/documents/arms_report_full.pdf. Retrieved 2009-03-28. 
  9. ^ a b c www.fpa.org
  10. ^ [1]
  11. ^ a b "Ukraine arms Cuba and Venezuela". Jane's. 16 September 2004. http://www.janes.com/defence/news/jid/jid040916_1_n.shtml. Retrieved 30 December 2008. 
  12. ^ "Ukraine's NATO aspirations cast a cloud over Russian arms export". BBC Monitoring. 14 February 2005. http://www.gateway2russia.com/st/art_268619.php. Retrieved 30 December 2008. 
  13. ^ a b Tsukanova, Anya (Tuesday, October 07, 2008). "Pirates shine spotlight on Ukraine arms-trafficking". Manila Times. http://www.manilatimes.net/national/2008/oct/07/yehey/opinion/20081007opi8.html. Retrieved 30 December 2008. 
  14. ^ http://www.pib.nic.in/release/rel_print_page.asp?relid=51470
  15. ^ Czech export of military material at record EUR 189.6m in 2008
  16. ^ Bulgaria's Arms Export Totals US$250 Million Annually
  17. ^ Official report for 2005 at the ministry of finance website
  18. ^ Official report for 2006 at the ministry of finance website
  19. ^ Bulgaria Denies Involvement in Arms Sales to Iraqi Kurdish Area, econ.bg, 24 Nov 2008
  20. ^ http://www.seesac.org/uploads/armsexport/Godisnji_izvestaj_2007.pdf
  21. ^ http://www.srpskadijaspora.info/vest.asp?id=12255
  22. ^ EU@UN - EU Presidency Statement - United Nations 62nd General Assembly: General Debate
  23. ^ 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

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