Arms industry

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The arms industry is a massive global industry. Its products include guns, ammunition, missiles, military aircraft, and their associated consumables and systems. The arms trade is the exchange of arms or weapons among two or more parties, except for exclusively sovereign nations.

Global impact

It is estimated that yearly, over 900 billion dollars ($900B) is spent on arms.

Almost every industrialized country in the world has a domestic arms industry to supply its own military forces. Some countries also have a substantial domestic trade in weapons for legal civilian use by its citizens. Illegal trade in small arms is prevalent almost everywhere, especially where civilian ownership is banned. There is also a substantial international trade in arms, both legal and illegal. Frequently, there are links between the legal arms trade and the illegal arms trade, with legally purchased weaponry being re-sold for illegal purposes. The arms industry can thus pose problems related to its lack of transparency, as both legal and illegal contracts are often made in secret.

Ironically enough, those who profit most from the global arms trade are also the five permanent members of the UN security council – the USA, UK, France, Russia and China. According to controlarms.org, these five countries are responsible for more than 80% of all reported conventional arms exports.

The biggest arms buyers in 2004 were India, China and Egypt.

Massive contracts for weapons are awarded by governments, making arms contracts of substantial political importance for the politician and firm in question. There are often allegations of political corruption in regard to large arms contracts.

The link between politics and the arms trade can result in the development of what General Eisenhower described as a military-industrial complex, where the armed forces, commerce, and politics become unhealthily close.

Amnesty International, Oxfam, and the International Network on Small Arms say that roughly 500,000 people are killed each year by the use of small arms, and that there are over 600 million of such arms in circulation. It is even estimated that today over 1135 companies based in more than 98 different countries are manufacturing small arms as well as their various components and ammunition.

Ethically, the arms trade is problematic for many as they see supplying the weapons for a conflict as morally akin to becoming involved oneself, but at less risk to one's own nation or company. Essentially, they see the arms industry as means of profiting from war and death when failure to supply arms could lead to an early disengagement.

Top 15 arms exporters in 1999

United States, $33bn
United Kingdom, $5.2bn
Russia, $3.1bn
France, $2.9bn
Germany,$1.9bn
Sweden, $700m
Australia, $600m
Canada, $600m
Israel, $600m
Ukraine, $600m
Italy, $400m
Belarus, $300m
People's Republic of China, $300m
Bulgaria, $200m
North Korea, $100m

Source: Federation of American Scientists, [1]

United States arms trade

The United States is by far the largest exporter of weapons in the world, selling almost twice as many weapons as the next 14 countries combined. Military sales account for about 18 percent of the national budget, far and away the greatest proportion of any other nation. (Estimated budget authority as presented in the President's budget.) Some say American governments cannot reduce arms sales because of the consequent fall in GDP. (See John Ralston Saul's The Collapse of Globalism, 1995)

U.S. arms are sold either as foreign military sales (FMS), in which the Pentagon is an intermediate negotiator, and direct commercial sales (DCS), where a company directly negotiates with its buyer. Many sales require a license from the State Department. The Defense Department manages the excess defense articles (EDA), weapons from the US military given away or sold at bargain prices, emergency drawdowns, assistance provided at the discretion of the President, and international military education and training (IMET).

From 1989 to 1996, the global value of direct commercial arms sales was US$257 billion, of which 45% was exported from the US. According to the 2005 annual US congress reports, 58% of all US arms trade contracts are made with developing countries.

International military education and training

In fiscal year 2002, $70 million USD was spent on IMET for 113 countries. During this same year, $46 million worth of drawdowns were provided to Nigeria ($4 million), Afghanistan ($2 million), Georgia ($25 million), the Philippines ($10 million) and Tunisia ($5 million).

Defense contractors are weapon manufacturers or companies participating in weapon research and warfare simulation.

List of major weapon manufacturers

Institutes participating in weapon research and warfare simulation

External links