In a world where China is establishing its power and other nations, backed by the United States, are asserting their rights in the Indo-Pacific region, the battle for military supremacy figures is high on the political agenda of nations.
The rivalry on the world stage is getting fiercer by the day and to the ‘big guns’ the principle that ‘might is right’ remains evergreen. Where comes the global peace and security permanent members of the United Nations Security Council pledge to uphold?
Counting the cost of human conflict from the Sahel in West Africa to Sanaa in Western Asia, world powers are poles apart in redressing the balance.
The Russia-Ukraine fierce military combat further widens the gulf and topped the table of talks in the 5-day World Economic Forum held in Davos, Switzerland, between May 22 – 26, 2022.
Rocket-fuelled spending
From F-16 fighter jets and Hypersonic missiles to the S-400 missile defense systems among array of heavy weaponry, the global arms race hits up the polity. Increasingly, state actors are strengthening their combat potential on multiple fronts.
Estimably, almost 4 billion US dollars have been spent on weapon purchase and delivery to Ukraine by the Joe Biden-led US administration and the prospects are high for more.
Hardly will a month go by without a major military aid package delivery to Kyiv by the West. Other powers such as Beijing, Moscow, Seoul, Pyongyang, and many more are stepping up the ante.
The tug-of-war between the West and the “Rest” continues with increased military operations becoming the norm in the Indo-Pacific and across continental Europe.
Who are those reaping the windfall?
Behind the scenes, the business of war turns in good profits for some and arguably defense companies and contractors are the largest beneficiaries of the war economy.
With the United States President, Joe Biden, sure-footed of a swift American response if Beijing decides to mount a full-scale takeover of the self-ruled island of Taiwan, it appears business as usual for the military industry, American defense companies in particular and all others across the globe.
More conflicts, increased production and sales, more money.
“We are seeing, I would say, the opportunity for international sales, the tensions in Eastern Europe, the tensions in the South China Sea, all of those things are putting pressure on some of the defense spendings over there, said Gregory J. Hayes, Chairman, and CEO of United States defense giant – Raytheon Technologies. “So I fully expect we’re going to see some benefit from it”. He added. That came twenty-nine days before Russia’s invasion of Ukraine.
Top gainers: Arms production league
Sales of arms and military services by the 100 largest arms companies totaled US$531 billion for 2020, according to data published in December 2021, by the defense think tank – Stockholm International Peace Research Institute (SIPRI). From 2016 to 2020, the United States, Russia, France, the United Kingdom, and Germany exported 80 percent of the world’s weapons.
Washington is home to 41 and the top five highest-ranked dealers of arms and weaponry globally, and together they accounted for 54 percent (US$285 billion dollars) of weapon sales based on the data by the research institute for 2020.
The United States has the largest military budget in the world and from Kabul to Kyiv, as Washington exit and enters wars, it profits significantly from the war economy than any other country.
The arms industry is also a pillar in Europe and 26 European companies accounted for 21 percent (US$109 billion dollars) of global weapon sales. Companies in China are not left out as the combined arms sales of five Chinese companies included in the top 100 amounted to an estimated US$66.8 billion.
Currently, the share price of the largest Russian arms company has risen by 45 percent since the Russia-Ukraine war began. European companies such as German’s Rheinmetall are also turning in good profits.
By the end of the Russia-Ukraine conflict and amid the high military tensions globally, the stock prices of the world’s leading exporters in the global arms bazaar are sure to soar high.
Who are the top five dealers?
From Lockheed Martin to General Dynamic, all based in the United States, here is a brief look into the profile of the top five dealers in the global arms bazaar, and their sales income based on data published by SIPRI for 2020.
Lockheed Martin
Founded in March 1995, and currently, under the leadership of James D. Taiclet, Lockheed Martin is one of the largest defense companies on the planet.
It produces weapons ranging from C-130 J Super Hercules to F-35 Lightning II and leads the global supply chain. As the biggest exporter, it accounts for US$58.2 billion of global arms exports.
Raytheon Technologies
Formed in April 2020 by a merger of the United Technologies Corporation and Raytheon Company, Raytheon Technologies is one of the largest defense manufacturers in the world by revenue and market capitalization.
Currently, under the leadership of Gregory J. Hayes, its advanced defense technology products include guided missiles, air defense systems, and drones. With arms sales of US$36.7 billion, the defense company is the world’s second-largest.
Boeing
A multinational corporation founded in July 1916, Boeing ranks top among the largest global aerospace manufacturers and produces weapons ranging from missiles and rockets to military aircraft.
Organized into four primary divisions, its revenue from arms sales and military services totaled US$32.1 billion. Presiding over the aerospace and defense company is Dave Calhoun.
Northrop Grumman
Founded in 1994, Northrop Grumman is one of the largest manufacturers of weapons and also specializes in information technology, software engineering, advanced technologies, and a host of others.
Currently led by Kathy Warden, it manufactures among other weapons: rocket launch systems, military aircraft and unmanned aerial vehicles. It ranks fourth in the global arms bazaar with arms sales of US$30.4 billion.
General Dynamics
Founded in 1952 and currently under the chair of Phebe Novakovic, General Dynamics is one of the largest defence contractors by sales and globally, it accounts for US$25.8 billion of arms export.
The aerospace and defense company produces among other weapons: nuclear-powered submarines, guided missiles, tanks and armoured fighting vehicles.
Where should the world go from here?
To the American arms dealers and all others across the globe, reaping from the war economy, the absence of war appears bad for business and amidst the current political climate, the quest for a peaceful, stable, and secured world appears a great deal.
Humanity is left with the question: when will the planet be free from wars? The ‘big guns’ remain locked on in several conflicts with that of Eastern Europe between Moscow and Kyiv topping the horrible list.
Civilians are always at the edge of the precipice with recurring military tensions between the ‘powers that be’ and one cannot but emphasize the rocky relations playing out on the world stage.
Stemming the tide of destructive conflict all over the world is not beyond the realms of possibility and can largely come by way of pacific settlement through diplomacy even as the production of destructive weapons of war is curtailed and ultimately diminished.
But not until the above comes to play in conflict resolution, the war economy will remain much more profitable to the top beneficiaries.
