Global Issues
DISARMAMENT: Developing World Lags in Arms Manufacture
The world's developing nations are still far behind Western industrial countries in the latest Top 20 rankings in one of the most lethal industries: arms manufacture.
With the exception of Russia, 19 out of the 20 largest arms-producing companies are from the Western world, including Britain, the United States, Italy and France, according to a study released Monday by the Stockholm International Peace Research Institute (SIPRI).
British Aerospace Systems (BAE) became the first non-U.S. company to lead SIPRI's top 100 list, with sales totaling over 32.4 billion dollars in 2008, according to the latest figures available.
The UK-based company was followed by four U.S. defence contractors: Lockheed Martin (29.8 billion), Boeing (29.2 billion), Northrop Grumman (26.1 billion) and General Dynamics (22.8 billion).
As part of the gradual globalisation of the world's arms industry, BAE Systems, however, depends on components manufactured in several locations outside the UK, including Australia, South Africa, Sweden and the United States.
Still, some of the world's developing nations with thriving domestic weapons industries, including China, Brazil, South Africa, India and Singapore, are mostly outside the major league.
But Almaz-Antei, a producer of S-300 and S-400 air defence systems, is the first Russian arms manufacturing company to enter the top 20, with 4.3 billion dollars in sales. The company has also tripled its arms sales since 2003.
In 2008, the world's 100 largest arms-producing companies sustained the upward trend in weapons sales, which reached 385 billion dollars, an increase of 39 billion dollars compared with 2007, according to SIPRI, an independent international institute dedicated to research into conflict, armaments, arms control and disarmament.
The SIPRI study said this is more than three times the size of total development aid (120 billion dollars) provided by industrial nations in 2008.
Asked about the chances of any arms manufacturer from the developing world making it to the top 20, SIPRI's Susan Jackson told IPS that several of these companies are already in the Top 100 arms-producing companies for 2008.
These companies include Bharat Electronics, Hindustan Aeronautics and Ordnance Factories (India) and ST Engineering (Singapore).
In the past, Denel from South Africa made an appearance in the Top 100 and has been close at other times, while Embraer from Brazil also has been close, said Jackson, researcher and head of the arms production project at SIPRI's military expenditure and arms production programme.
At least two countries, Israel and South Korea, who are outside of Western Europe but part of the industrial world, are also key players in arms production - specifically Elbit Systems, Israel Aerospace Industries and Rafael (Israel) and LIG and Samsung (South Korea).
She also pointed out that part of the current debate centres on the role of the BRICKS (Brazil, Russia, India, China, Korea/South and South Africa) and whether their increasing competitiveness is enough to outright challenge the arms industries in the Western industrialised countries or to provide avenues for collaboration in arms production.
Jackson said Chinese companies would almost certainly appear in the SIPRI Top 100 (and most likely in the top 50), if satisfactory data were available.
Apart from the omission of China, analysis of the companies in the Top 100 is sufficient to capture the major trends in the global arms industry.
'As far as calculating chances for any of the companies from countries such as Brazil and South Africa to generate arms sales at the level to reach the top 40 or 50, it is difficult to say since it remains to be seen whether, and to what degree, technology will impact their indigenous arms industries and therefore their competitiveness in the international arms market,' she added.
Asked why Western nations still have an edge over developing countries, she said the arms industries in the Western industrialised countries have a clear competitive advantage because of the level of technology in their arms industries, which in turn is related to their overall industrial and technological standards.
'This advantage is apparent not only in the international arms market, but also in much of the domestic procurement outside of the Western industrialised countries,' Jackson said.
She said it is important to keep in mind that SIPRI's list of Top 100 arms-producing companies includes only the largest ones, and those generate such high levels of arms sales because they produce big, sophisticated and expensive weapons systems.
There are many smaller arms-producing companies outside this group, even if they are not major in terms of the financial value of their arms sales, Jackson pointed out. Many of the developing countries, and in particular the industrialising countries, do have significant production in small arms and light weapons (SALW).
Although volume in this type of arms production might be high, she said, its low technological level means the financial value is low, especially compared to the financial value of the weapons produced by the companies in the SIPRI Top 100.
© Inter Press Service (2010) — All Rights Reserved. Original source: Inter Press Service