US Overseas Operations Helps Global Arms Sale Thrive in 2016

The global arms sales and military services, which had been witnessing a decline in last five years, rose 1.9 percent in the year 2016, according to an international survey. The Stockholm International Peace Research Institute (SIPRI), an international institute based in Sweden, said in a report that the global arms trade by the world’s largest arms-producing and military services companies - the SIPRI Top 100 - in 2016 has reached $374.8 billion.

The companies that form part of the first 10 ranks of the Top 100 are based in USA and Western Europe. The report notes that with combined arms sale of $194.8 billion in 2016, the top 10 companies accounted for 52 percent. Among the Top 100, the world largest arms producer, Lockheed Martin’s sales saw an increase of 10.7 percent in 2016, primarily due to the acquisition of helicopter manufacturer Sikorsky and the increased deliveries of F-35 combat aircraft.

Apart from weapon manufacturers, the military services companies in the US enjoyed a considerable rise in their sales. DynCorp and KBR’s sales grew by 27.7 and 100.8 percent respectively in 2016. The new major contracts with the US and British government have contributed to the rise.

While the overseas military operations by the United States helped the global arms trade to ‘recover’ from the decline, the crisis in the Korean peninsula pushed the sales of South Korean arms producers. Dominating the ‘emerging producers category’ in 2016, Companies from South Korea boosted their arms sales by 20.6 percent to $8.4 billion last year. "That quite clearly has to do with the security situation in the region," says Aude Fleurant, Director of the Arms and Military Expenditure Program at SIPRI.

The rise in arms sales seems to have a connection with the ‘smothering conflicts’. "Nonetheless, it's very difficult to make a direct connection between large arms purchases and ongoing wars. But of course there are links: There's a greater demand for certain types of weapon — munitions, missiles or ground vehicles, for example,” says Fleurant.

Western Europe comes second in the list of the most important suppliers of arms, followed by Russia with 7.1 percent of arms sales around the world. The Brexit decision did not seem to have an impact on the arms sales of British companies, which rose by 2.0 percent in 2016. The sales of Russians companies increased by 3.8 percent- $26.6 billion- in 2016, but it was slower than the increase in 2015.

The SIPRI survey does not include China ‘due to lack of data’ on which to make a reasonable estimate of arms sales for most companies. But the researchers part of the report believes that China may also be a top weapon exporters.

In the Top 100 companies, Hindustan Aeronautics, Indian Ordinance Factories, Bharat Electronics and Bharat Dynamics are four companies listed from India. The Indian arms manufacturers have not witnessed any noticeable increase in their sales.