Who Are the Ultimate Winners in the World’s Ongoing Military Conflicts?

WAR RACKET--CATASTROPHE CAPITALISM, 9 Dec 2024

Thalif Deen | IPS/Human Wrongs Watch – TRANSCEND Media Service

2 Dec 2024 – If and when the devastating military conflicts in Ukraine and Gaza come to an end, the ultimate winners will not be the Russians, the North Americans or the Israelis but the world’s arms manufacturers—contemptuously described as “merchants of death”.

Credit: US National Archives

And so will be the winners in a rash of conflicts and civil wars in Syria, Myanmar, Lebanon, Yemen, Sudan and Afghanistan.The latest report from the Stockholm International Peace Research Institute (SIPRI) points out revenues from sales of arms and military services by the 100 largest companies in the industry reached $632 billion in 2023, a real-terms increase of 4.2 per cent compared with 2022.

The new data, released today, says arms revenue increases were seen in all regions, with particularly sharp rises among companies based in Russia and the Middle East.

Overall, smaller producers were more efficient at responding to new demand linked to the wars in Gaza and Ukraine, growing tensions in East Asia and rearmament programmes elsewhere.

In 2023, according to SIPRI, many arms producers ramped up their production in response to surging demand. The total arms revenues of the Top 100 bounced back after a dip in 2022.

Almost three quarters of companies increased their arms revenues year-on-year. Notably, most of the companies that increased their revenues were in the lower half of the Top 100.

“There was a marked rise in arms revenues in 2023, and this is likely to continue in 2024,” predicted Lorenzo Scarazzato, a Researcher with the SIPRI Military Expenditure and Arms Production Programme.

“The arms revenues of the Top 100 arms producers still did not fully reflect the scale of demand, and many companies have launched recruitment drives, suggesting they are optimistic about future sales,” he said.

Dr. Simon Adams, President and CEO, the Center for Victims of Torture, told IPS the number of people in the world displaced by persecution, conflict and atrocities has more than tripled in the past decade to over 120 million.

The people who have gained the most from this expansion in human misery, he said, are the war criminals, torturers and human rights violators of the world.

“But they can’t survive without the weapons manufacturers who arm and enable them. And it is the arms manufacturers who have directly profited the most”.

“Wherever we see civilian suffering, bombed buildings, death and destruction in the world, there is some arms trader who sees a fresh business opportunity and increased profit margins.”

This is an industry whose economic livelihood is bloodshed,” declared Dr Adams.

In an article titled “War Profiteering” in the July issue of The Nation, David Vine and Theresa Arriola single out the five biggest US companies thriving off the war industry: Lockheed Martin, Northrop Grumman, Raytheon, Boeing and General Dynamics.

And it was US President Dwight Eisenhower, who in 1961, warned Americans about the might of the “military industrial complex” (MIC) in the US.

According to Brown University’s Costs of War project, cited in the article, “the MIC has sowed incomprehensible destruction globally, keeping the United States locked in endless wars that, since 2001, have killed an estimated 4.5 million people, injured many millions more, and displaced at least 38 million.”

Dr M.V. Ramana, Professor and Simons Chair in Disarmament, Global and Human Security, School of Public Policy and Global Affairs, and Graduate Program Director, at the University of British Columbia, Vancouver, told IPS the latest statistics published by SIPRI shows how military industries and investors in these producers of the means of killing and maiming people are thriving economically even as their role in perpetuating slaughter of civilian populations and the violation of the human rights among peoples in multiple countries becomes clearer by the day.

“Leading this ignominious list is the United States, which sells roughly half of all the weapons sold; the top five arms merchants are U.S. companies, which together account for around a third of all sales.”

This state of affairs, he argued, is tragic, not only because of the human toll extracted by these weapons in places around the world, ranging from Gaza and Lebanon to Ukraine, but also because this money could be used to meet pressing human needs around the world.

To offer but one example, the United Nations World Food Program, he said, estimates that it would cost $40 billion every year “to feed all of the world’s hungry people and end global hunger by 2030”.

That’s less than 40 percent of the revenues of the top two corporations involved in the arms business. In all, the data meticulously produced year after year by SIPRI is a really sad commentary on the priorities of governments and powerful institutions that control decisions on spending, Dr Ramana declared.

According to SIPRI, the 41 companies in the Top 100 based in the United States recorded arms revenues of $317 billion, half the total arms revenues of the Top 100 and 2.5 per cent more than in 2022. Since 2018, the top five companies in the Top 100 have all been based in the USA.

Of the 41 US companies, 30 increased their arms revenues in 2023. However, Lockheed Martin and RTX, the world’s two largest arms producers, were among those registering a drop.

‘Larger companies like Lockheed Martin and RTX, manufacturing a wide range of arms products, often depend on complex, multi-tiered supply chains, which made them vulnerable to lingering supply chain challenges in 2023,’ said Dr Nan Tian, Director of SIPRI’s Military Expenditure and Arms Production Programme. ‘This was particularly the case in the aeronautics and missile sectors.’

Meanwhile, the combined arms revenues of the 27 Top 100 companies based in Europe (excluding Russia) totalled $133 billion in 2023. This was only 0.2 per cent more than in 2022, the smallest increase in any world region.

However, behind the low growth figure the picture is more nuanced. European arms companies producing complex weapon systems were mostly working on older contracts during 2023 and their revenues for the year consequently do not reflect the influx of orders.

‘Complex weapon systems have longer lead times,’ said Scarazzato. ‘Companies that produce them are thus inherently slower in reacting to changes in demand. That explains why their arms revenues were relatively low in 2023, despite a surge in new orders.’

At the same time, a number of other European producers saw their arms revenues grow substantially, driven by demand linked to the war in Ukraine, particularly for ammunition, artillery and air defence and land systems.

Notably, companies in Germany, Sweden, Ukraine, Poland, Norway and Czechia were able to tap into this demand.

For instance, Germany’s Rheinmetall increased production capacity of 155-mm ammunition and its revenues were boosted by deliveries of its Leopard tanks and new orders, including through war-related ‘ring-exchange’ programmes (under which countries supply military goods to Ukraine and receive replacements from allies).

The SIPRI Arms Industry Database, which presents a more detailed data set for the years 2002–23, is available on SIPRI’s website at <https://www.sipri.org/databases/armsindustry>.

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Thalif Deen, Director, Senior Editor, UN Bureau, Inter Press Service (IPS) news agency, has been covering the United Nations since the late 1970s. As the former UN Bureau Chief for Inter Press Service, he was cited twice for excellence in U.N. reporting at the annual awards presentation of the U.N. Correspondents’ Association (UNCA). In November 2012, he was on the IPS team which won the prestigious gold medal for reporting on the global environment– and in 2013 he shared the gold, this time with the UN Bureau Chief of Reuters news agency, for his reporting on the humanitarian and development work of the United Nations. A former information officer at the U.N. Secretariat, he served twice as a member of the Sri Lanka delegation to the UN General Assembly sessions. His track record includes a stint as deputy news editor of the Sri Lanka Daily News and senior editorial writer on the Hong Kong Standard. A former military editor Middle East/Africa at Jane’s Information Group, a columnist for the Sri Lanka Sunday Times and a longtime U.N. correspondent for Asiaweek, Hong Kong and Jane’s Defence Weekly, London, he is a Fulbright scholar with a Master’s Degree in journalism from Columbia University. He can be contacted at thalifdeen@ips.org

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