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Weapons: A Trillion-Dollar Trade

8/28/2005 - 6:30 AM PST

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Spending on Arms Continues to Rise

STOCKHOLM, Sweden, AUG. 28, 2005 (Zenit) - Armaments remain a big business worldwide. On June 7 the Stockholm International Peace Research Institute released its annual report on the arms industry. According to the "SIPRI Yearbook 2005: Armaments, Disarmament and International Security," world military expenditure in 2004 is estimated to have been $1.03 trillion in current dollars.

The average annual rate of increase in military expenditure during 1995-2004 was 2.4% in real terms. This period, however, can be divided into two: first, the post Cold War reduction in military spending which culminated around 1998; second, an increasing trend since 1998, accelerating to an annual average increase of around 6% in real terms over the three-year period 2002-2004.

The report notes that as a global average, 2004 military expenditures correspond to $162 per capita, or 2.6% of the world's gross domestic product. But there is a wide variation between regions and countries.

Military expenditure by the United States makes up 47% of the world total. U.S. spending increased rapidly during 2002-2004 as a result of the fight against terrorism, and the military operations in Afghanistan and Iraq. According to the SIPRI report, there was a growing debate about the sustainability of the current U.S. military efforts, due to its impact on the federal budget deficit and on economic growth.

5 big sellers

SIPRI data show that the value of the combined arms sales of the top 100 companies in the world, excluding China, rose 25% in 2003, to $236 billion (in current dollars). Of these 100 companies, 38 are U.S.-based. One is based in Canada. These 39 accounted for 63.2% of arms sales by the top 100, while 42 European companies (including six based in Russia) accounted for another 30.5% of sales.

The report noted that only limited information is available on commercial arms sales worldwide. "This lack of data," it said, "makes it difficult to establish a firm foundation for political and public discussion of issues relating to arms production and arms sales."

Overall arms sales were concentrated in a small group of countries. France, Germany, Russia, the United Kingdom and the United States made up 81% of all deliveries in 2000-2004. In the realm of international trade in conventional arms, Russia replaced the United States as the main supplier of major weapons during 2000-2004. But SIPRI speculated that the Russia's lead could diminish in the future, due to the old technology of its equipment.

The top buyers of arms in 2004 were China and India. China, though almost completely dependent on Russia for its arms imports, is now developing its own weapons. And India, another major Russian client, is looking at buying from other suppliers, including the United States.

The European Union maintains an arms embargo against China, imposed after the 1989 Tiananmen Square crackdown, but is now considering lifting the restrictions. In fact, the report said, the embargo has not stopped several European countries from supplying military technology to China. The United States strongly opposes lifting the embargo, in order to prevent a Chinese military buildup, and it has threatened the EU with sanctions if the embargo is lifted.

Nuclear stalling

Arms control is still fraught with problems. Regarding illegal nuclear, biological and chemical weapon programs, the SIPRI report states: "For almost a decade there has been little progress in multilateral arms control in general, and some processes have suffered severe setbacks." Moreover, states in a number of instances have violated their obligations under arms control treaties, the report adds.

The SIPRI considers that developments in relation to nuclear arms during 2004 "raised serious questions about the future of the nuclear non-proliferation regime and its principal legal foundation, the 1968 Treaty on the Non-Proliferation of Nuclear Weapons."

Evidence surfaced about a clandestine network supplying Pakistan's nuclear program. The network reportedly involved supplying nuclear technology to Iran and Libya and possibly to other states. As well, controversy continued over the nature of Iran's nuclear program. And there was little progress made in the international talks on the future of North Korea's nuclear program.

In addition, the states that are party to the 1968 treaty are deadlocked over the continuing implementation of its provisions and have failed to even agree on an agenda for the 2005 Review Conference.

There was some positive news, with the decision by Libya to implement its December 2003 pledge to abandon and dismantle its weapons of mass destruction and ballistic missile programs.

The situation was better regarding chemical weapons, as countries continued to ...

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