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The world's military supermarket

Guns: The world currently spends about 16 billion kroner on the military. While covid-000 sticks sticks in the wheels of most of the world's merchandise trade, the trade in munitions seems to be an exception.

(Note: The article is machine-translated from Norwegian by Gtranslate)

Alexander Harang
Harang is the editor of "Fredsnasjonen", the magazine MODERN TIMES published in the summer of 2021.

Stockholm International Peace Research Institute (SIPRI) compiles the most recognized global statistics on military consumption and international arms trade in the world. Their figures are also used in the Storting when Norwegian arms exports are discussed. Therefore, we give here a review of the latest figures SIPRI has to offer.

Despite the pandemic, world military spending or consumption grew by 2,6 percent in 2020.[1] Thus, the world spends a total of approximately 16 billion kroner on the military. This is based not only on the adopted budgets, but on how much of what was set aside for military consumption was actually used.

Both buyer and seller thrive best with extensive secrecy in the arms trade.

What SIPRI defines as military consumption is far more than just expenditure on weapons. This includes all available information on public spending on the military, such as salaries, costs of training and exercises, all kinds of equipment, spending on all military infrastructure, military research and administrative expenses.

Even though the world's total value creation fell by more than four percent in 2020, the world's states chose to spend far more of their resources on the military this year. Although countries such as Brazil, Chile, Russia and South Korea spent significantly less on their respective defense budgets in 2020, precisely because funds from there were reallocated to pandemic control, most other countries chose to increase their military spending.

The states that increased their military spending by the most dollars in 2020 were the United States (4,4 percent growth) and China (1,9 percent growth). The United States' share of the world's military consumption now amounts to as much as 39 percent. Measured in 2019 dollars, this means a consumption of as much as NOK 6500 billion. China's military spending is the world's second largest in 2020. China's military spending is also the one that has increased the most over time, with as much as 26 percent growth over the past decade. In each of the last 26 years, China has increased its military spending.

Secrecy and corruption

It is difficult to estimate the value of the world arms trade. Procurement of munitions is characterized by secrecy, corruption and the absence of free competition. SIPRI still makes an attempt, but limits itself to the export and import of "whole weapon systems". They have been doing this since 1950 and have therefore developed an impressive database.[2]

But when you only count whole weapon systems, there is a lot of munitions exports that do not come with. SIPRI's figures do not include, for example, the export of ammunition, components for weapons, or other war material such as night optics and weapon platforms. Most of the Norwegian munitions exports are just such exports – and Norway produces few complete weapons systems.

Secondly, it is not as meaningful to calculate the value of the arms trade from year to year, as one does with military consumption. This is because delivery of entire weapon systems takes time, and the time of transfer may differ by several years from the conclusion of the contract. The value of exports and imports one year thus does not say much about actual trends in the arms market. SIPRI therefore uses five-year intervals to describe developments in the international arms trade.

Thirdly, valuation of the arms trade is difficult, since the price of the arms systems sold internationally is usually secret. This is security-sensitive information, as arms-importing states rarely want other states to know exactly what kind of military capabilities they are acquiring. The arms industry also has no interest in letting the world know exactly what price they charge for which weapons.

Both buyer and seller thus thrive best with extensive secrecy in the arms trade. In this market, of course, a lot of weapons are also transferred both illegally and in gray areas, which not even SIPRI can detect with its method.

Arms exports and imports

With the limitations explained above, SIPRI nevertheless makes the best attempt to describe the global trends for entire weapon systems – including both sales, military assistance and licensed production of weapons. SIPRI's latest data in this area compares the period 2011–2015 with 2016–2020,[3] which also provides a basis for drawing some conclusions about the state of the international arms trade.

SIPRI's data show that the world arms trade is dominated by a few large exporters, and a few large importers. The world's largest arms exporter over the last five-year period is the United States, which accounts for 37 percent of exports. US exports have increased by 15 percent from the previous five-year period (2011–2015). About half of US exports go to the Middle East, and Saudi Arabia alone is the importer of 24 percent of all weapons systems the United States exports.

China is number five on the list of major exporters – with over five percent of the world's arms exports.

Russia is the second largest arms exporter for the last period (2016–2020) with approx. 20 percent. But Russia's share of arms exports is falling. Although Russia supplies sub-Saharan Africa with 30 percent of its weapons systems, they sell far less to Asia than before. France and Germany are the third and fourth largest exporters in the period, respectively, which has increased its exports dramatically from the previous period. France's export growth is as high as 44 percent, while Germany's is 21 percent. Together, these two now serve almost 14 percent of the world market for entire weapon systems.

China is number five on the list of major exporters – with over five percent of the world's arms exports, and almost the same on the import side. But the Middle East is increasing the most, where the market for the arms industry has increased by a quarter between the two five-year periods. Saudi Arabia is now the world's largest arms importer, with an import increase of 61 percent. Egypt and Qatar have increased their arms imports by 136 percent and 361 percent, respectively. And the United Arab Emirates is following suit. The region will remain a hot market for the arms industry for years to come.

"Peace Nation" Norway

Norwegian arms exports also continue to increase. In Norway, the arms exporters are organized in the Defense and Security Industry Association, which can tell that the Norwegian arms industry was not hit hard by the pandemic last year. This is because the authorities listened to the needs of the industry and quickly implemented measures to mitigate the effects of the crisis on the industry – production is maintained through the pandemic.

About half of US exports go to the Middle East.

However, the Norwegian arms industry is concerned about an upcoming pandemic effect in the industry. They are concerned that military budget money will be transferred for action against the pandemic, that the costs of the pandemic measures will be covered by defense
budgets. However, SIPRI's data indicate that the Norwegian arms industry can aim for even more growth in the time to come.

The global market for munitions is growing, and Western arms exporters are increasingly taking the cake. The Norwegian arms industry largely supplies its munitions to major American and European weapons systems. With more money from the Middle East, North Africa and Asia, which will be used on Western weapons systems in the time to come, large contracts will also accrue to the Norwegian contributors to this rearmament we are witnessing.

[1]   SIPRI data for world military consumption 2020, published 26 / 4-21. See https://www.sipri.org/media/press-release/2021/world-military-spending-rises-almost-2-trillion-2020

 

[2]   Se https://sipri.org/databases/armstransfers

 

[3]   SIPRI Data for international arms trade, published 15 / 3-21. See https://www.sipri.org/media/press-release/2021/international-arms-transfers-level-after-years-sharp-growth-middle-eastern-arms-imports-grow-most

 

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