Economic crisis and the arms race
Real estate sales weapons has always been a very profitable business. Tracing carefully the situation in this market, it is possible, with a rather large degree of confidence, to predict the emergence of new hot spots in the world or possible changes in the existing balance of forces.
In order to monitor issues of peace and conflict, as well as the issues of arms control that are inextricably linked with them, the Stockholm Peace Research Institute (SIPRI) was established in 1966 year. From 1969, this international institute, based on the results of its research, publishes an analytical yearbook (the Russian edition, with the participation of IMEMO RAN, is issued from 1995). SIPRI has been collecting data on all military industry objects since 1989. The data bank contains information on financial performance and employment in companies producing weapons.
Recently, in the next expert report of SIPRI, attention was focused on a significant reduction in arms sales in the past year. Experts believe that the main reason for the decline in arms sales was the global economic crisis, which forced many countries to cut their military spending and postpone indefinitely new weapons purchase plans. Especially from these decisions, according to SIPRI data, major manufacturers of gunsmiths in North America and the EU countries suffered. And although it would seem that the reduction by 5% of the sales of weapons by the main manufacturers does not seem so significant, but in monetary terms, the losses amounted to about $ 410 billion.
Experts also mention important circumstances that contributed to the fall in arms sales. Among them, the reduction of military operations in Afghanistan and Iraq, as well as the imposition of sanctions on the supply of arms to Libya.
Large gunsmiths are trying to take measures to preserve their business. They are developing new strategies that in this situation will allow them to keep production and skilled personnel. But, all the same, manufacturers of weapons had to go to such measures as the reduction of personnel and production. Partially, the arms business moved its units to countries in the Middle East, Asia and Latin America to gain new sources of revenue.
Manufacturers of weapons to maintain their competitiveness went to the development of the market of innovative technologies. For example, some of them have begun to provide cybersecurity services. Among such companies, successfully operating in the military and civilian sectors of the economy, the most famous are the British company BAE System, the American Raytheon and the European EADS Cassidian.
Military-industrial companies offer their services in the field of software development, data protection, maintenance of information networks, provide training, provide consulting services and administrative support.
The SIPRI published materials list one hundred of the largest and most influential military-industrial companies for the previous year. Among them are dominated by suppliers of weapons from North America and Europe. Most likely, China could take the last place in this list, but there is no confirmed information about Chinese manufacturers and suppliers of weapons. From the SIPRI report, it follows that 44 US companies (from TOP-100) captured 60% of the global arms sales market. Their colleagues from Europe managed to occupy a niche of arms sales equal to 29%. The first place in the list of SIPRI is occupied by the American corporation Lockheed Martin, the second is given to the concern Boeing, and the British BAE Systems closes the three of the most successful gunsmiths.
The fact that the situation on the arms sales market has worsened is confirmed by the fact that in the recent past (2011 year) the US military concerns held 78% of the global arms export market in their hands.
Such successful 2011 performance of the year was due to the fact that large batches of American weapons were purchased by the countries of the Persian Gulf, including financially stable countries such as Oman, the United Arab Emirates and Saudi Arabia. Experts believe that the demand for weapons in this region was associated with the escalation of the conflict around the Iranian nuclear program. Interestingly, the conflict itself was provoked by the United States: Washington organized the imposition of sanctions against Iran, and in all possible ways forced the countries of the region to begin military actions to destroy Iran’s dangerous objects. This US policy has forced many countries to think about ensuring their security, and, consequently, about strengthening their defense capabilities. Due to these circumstances, the sales of American fighters and missiles increased significantly.
The “hype” raised by the Americans over the Iranian nuclear program provoked massive purchases by the Gulf countries of weapons from the United States, including sophisticated anti-missile systems. In turn, Iran, concerned about the increasing military power of the external environment, is taking measures to increase its weapons. Given the explosive situation in the Middle East, the supply of US weapons to countries in the region, fueling an arms race, leads to conflicts and violent confrontation.
According to analysts, the Americans will continue to be able to retain their leading positions in the highly competitive arms market due to the fact that it is difficult to stop a fire in the Middle East. American politicians always remember the interests of their military corporations in this huge armaments market during their work in this region. By supporting its military-industrial complex, Washington solves many internal problems - for example, revitalizing the labor market in its own country. In pursuing its economic and strategic interests in the Middle East, the United States can lead the difficult situation in this region into a dead end in security.
But the Middle East is not the only consumer of American weapons. The United States sells its weapons to other regions, heating up the situation there. It was American weapons that played a practically decisive role in conflicts in Sudan, Mexico, Sri Lanka, the Philippines, Colombia, Indonesia, the Balkans, and Africa.
The global arms market has a complex political and military-economic system of relations and ties. Arms manufacturers not only receive huge profits from their business, but also unceremoniously intervene in the internal and external policies of the countries that buy weapons from them and force them to increase their military potential. It is at the expense of the countries-importers of weapons that these military-industrial concerns test new types of weapons and maintain production capacities at an appropriate level.
Weapon manufacturers have powerful levers of influence on countries that buy weapons from them: military equipment requires regular maintenance, buyers are interested in the timely receipt of spare parts and ammunition, it is necessary to modernize previously acquired weapons.
In addition to the legal sale of weapons, there is gray (when the sale is carried out with the consent of the government of the country, but these transactions are not advertised) and the black market for the arms trade. According to rough estimates, sales in the gray market reach $ 2 billion. The profitability of the black market is not widely known, since supplies of weapons and military equipment are carried out bypassing all international agreements.
As noted above, in order to overcome the effects of the economic crisis, many countries reduce spending on health care, education and social programs, but they are trying to allocate funds for military needs in full.
According to the SIPRI report, European governments are in no hurry to reduce their military arsenals or join forces to reduce the cost of maintaining defense capability. This is confirmed by the fact that since 2008, Germany, Great Britain and France have reduced their defense budget by only 5%.
The plans of the British government to reduce the military budget in 2014 year by 7,5%. But all other expenditure items of the UK budget are expected to be reduced by 10%. (for reference: in 2011, the British military budget was $ 62,7 billion.)
France has kept the military budget at the same level, despite the fact that it has lost its AAA credit rating and has zero economic growth. France's military spending is $ 62,5 billion.
However, European countries such as Spain, Ireland, Italy and Greece had to revise the military budget items in the direction of reduction, but these cuts are insignificant.
Despite the difficult economic situation in Greece, it retained the first place among the EU countries to provide defense industry quotas: 2,7% to GDP (in 2008, the quotas were 3,1%). For a long time Greece bought airplanes and submarines from its strategic partners - Germany and France. Even the complete absence of medicines in Greek hospitals did not force the authorities to take a decision on a drastic reduction in military spending.
In Italy, the situation is no better: the crisis of power, the complete decline of business, suicide, strikes, etc. But despite this, the military budget increased to 20,93 billion euros, i.e. by 5% compared with the previous year. The Italian Air Force will not be without the new fighter-bombers F35.
In the pre-crisis period, the Spanish government significantly increased its military spending. Now Madrid has to pay a debt of $ 26 billion for the arms modernization programs that were held earlier.
German military spending is $ 46,7 billion - ninth in the SIPRI ranking.
It should be noted that the military contingent of the European Union, participating in UN or NATO operations, far exceeds the number of US troops. Twenty-seven EU member states spend $ 360 billion on their military programs annually.
But the first place in the SIPRI military expenses level ranking is occupied by the United States of America: $ 711 billion.
According to the Sbilanciamoci Association, the American military apparatus numbers 2 million military and civilians. The European military contingent is 7 million.
Experts of the Sbilanciamoci Association believe that the formation of a single European army could save about 100 billion euros.
By the way, the only existing pan-European military unit of seven thousand troops - Eufor - took part in military conflicts in the Congo and the Balkans. Unfortunately, in other joint operations, European armies behave as isolated units.
German Foreign Minister G. Westerwelle at the Munich Security Conference in 2010 confirmed participation in the program to create a unified European army as a kind of long-term goal. Consequently, neither European nor American arms manufacturers, even during the global crisis, will lose their super-profits.
I must say that eight Russian manufacturers are included in the TOP-100, prepared by SIPRI experts. On the 18-th place of the list of "United Aircraft Corporation." 22-place took the concern "Almaz-Antey" "Helicopters of Russia" is on the 40-th line of this rating. These places say that after the collapse of the USSR, Russia lost its leading position in the global market for trade in armaments and military equipment, and, consequently, lost a significant source of income to the state treasury. To return the lost position will require not only significant financial costs, but also the time that now works against Russia.
Materials used:
http://ria.ru/defense_safety/20130218/923398328.html
http://kramtp.info/news/474/full/id=26181;
http://blogs.voanews.com/russian/us-russia/2013/02/26/%D0%BC%D0%B8%D1%80%D0%BE%D0%B2%D1%8B%D0%B5-%D0%B7%D0%B0%D0%BA%D1%83%D0%BF%D0%BA%D0%B8-%D0%BE%D1%80%D1%83%D0%B6%D0%B8%D1%8F-%D0%B8%D0%B4%D1%83%D1%82-%D0%BD%D0%B0-%D1%81%D0%BF%D0%B0%D0%B4/
http://www.inosmi.ru/world/20130305/206599384.html
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