One perceptible enlargement of the global arms production has taken place in two Asian countries and not India but South Korea and Israel – that are now among the major arms exporters too.
India’s defense imports might have fallen as much as 33 percent, according to the latest report of the prestigious Stockholm International Peace Research Institute (SIPRI), but India continues to be the second-largest importer of global arms, the first being Saudi Arabia.
Similarly, Russian arms exports might have declined considerably (mainly because of falling Indian imports), but Russia still remains the world’s second-largest arms exporter, after the United States.
Saudi Arabia’s imports accounted for 11 percent of global sales and India’s 9.5 percent during the period 2016-2020, the report shows. On the export front, the US accounted for 37 percent of the overall sales while Russia 20 percent in the same period.
Some of the under-emphasized features of the latest SIPRI report that need to be highlighted are the following:
Overall Sales Remain Same
First, though for the first time since 2001–2005, the volume of deliveries of major arms among countries did not increase between 2011–15 and 2016–20, the overall international arms transfers remain close to the highest level since the end of the Cold War.
If another survey by another agency – the Global Defense Market Yearbook 2020 published by the Defense Agency for Technology and Quality – is to be believed, overall, the amount of global arms transactions increased 5.5 percent during the 2015-19 period compared with the previous five years.
As Pieter D. Wezeman, Senior Researcher with the SIPRI Arms and Military Expenditure Programme has said, “It is too early to say whether the period of rapid growth in arms transfers of the past two decades is over. For example, the economic impact of the Covid-19 pandemic could see some countries reassessing their arms imports in the coming years.
“However, at the same time, even at the height of the pandemic in 2020, several countries signed large contracts for major arms.”
Middle-East Makes Up For The Loss
Secondly, major importers such as India and China (China has been a big importer of European – mainly Russian – arms of more than $15 billion) might have bought fewer arms, but this loss has been more than compensated, seen overall, by the huge growth in purchases by the countries in the Middle-East.
They imported 25 percent more major arms in 2016–20 than they did in 2011–15. Thanks to the regional strategic competition in the region, the Middle East figures were driven chiefly by the world’s largest arms importer, Saudi Arabia, which increased its purchases by 61 percent. Egypt’s imports rose 136 percent and those of Qatar’s 361 percent.
Though arms imports by the United Arab Emirates (UAE) fell by 37 percent, several planned deliveries of major arms — including that of 50 F-35 combat aircraft from the USA agreed in 2020 — suggest that the UAE will continue to import large volumes of arms, analysts say.
The prevailing regional tensions are perhaps the main factor that perhaps explains why ‘Asia and Oceania’ was the largest importing region for major arms, receiving 42 percent of global arms transfers in 2016–20. Along with the Middle Eastern countries, India, Australia, China, South Korea, and Pakistan were the biggest importers in the region.
Even Japan’s arms imports increased by 124 percent between 2011–15 and 2016–20. Although Taiwan’s defense purchases in 2016–20 were lower than in 2011–15, it placed several large arms procurement orders with the USA in 2019, including for combat aircraft.
“For many states in Asia and Oceania, a growing perception of China as a threat is the main driver for arms imports,” says Siemon T. Wezeman, Senior Researcher at SIPRI. “More large imports are planned, and several states in the region are also aiming to produce their own major arms.”
France, Germany Earn Profits
Thirdly, while the world’s second-largest exporter Russia and the fifth largest China did bad arms business in the past five years, the third and fourth, France and Germany respectively, had a profitable five-year period.
France increased its exports of major arms by 44 percent and accounted for 8.2 percent of global arms exports in 2016–20 (India, Egypt, and Qatar together receiving 59 percent of French arms exports).
And Germany increased its exports of major arms by 21 percent between 2011–15 and 2016–20, accounting for 5.5 percent of the global total (the top markets for German arms exports were South Korea, Algeria, and Egypt).
Fourthly, the past few years have also witnessed a significant phenomenon of the not-so-rich developing part of the world (South) getting increasingly integrated into the global arms industry in terms of production.
Leading arms manufacturers are now present in nearly 50 countries through majority-owned subsidiaries, joint ventures, and research facilities.
It is said that with a global presence spanning 24 countries each, Thales and Airbus are the two most internationalized companies — followed closely by Boeing (21 countries), Leonardo (21 countries), and Lockheed Martin (19 countries).
Though the United Kingdom, Australia, the USA, Canada, and Germany host the largest numbers of these foreign entities, in the ‘South’, these companies are now well established in countries such as Saudi Arabia (24), India (13), Singapore (11), the UAE (11) and Brazil (10).
According to Alexandra Marksteiner of the SIPRI Arms and Military Expenditure Programme, “There are many reasons why arms companies might want to establish themselves overseas, including better access to growing markets, collaborative weapon programs, or policies in the host countries tying arms purchases to technology transfers.”
South Korea, Isreal Among Major Exporters
Fifthly, one perceptible enlargement of the global arms production has taken place in two Asian countries – South Korea and Israel – that are now among the major arms exporters too. South Korea was the 10th-largest arms exporter in the 2015-2019 period, accounting for 2. 7 percent of the world’s total defense exports.
Arms exports by South Korea were 210 percent higher in 2016–20 than in 2011–15. Among the world’s top 100 defense companies, South Korea had three on the list — Hanwha Aerospace Co. at 46th, Korea Aerospace Industries at 60th, and LIG Nex1 Co. at 67th.
South Korea undertook reforms by easing the defense offset requirements on foreign companies, promoting greater competition among South Korea’s chaebols, and nurturing small- and mid-sized defense companies that could efficiently produce the components for combat systems.
These efforts enabled not only South Korea’s large defense integrators to lower their prices, but also its smaller companies to enter global defense supply chains.
Equally important to the success of the South Korean defense industry has been its technical ability to manufacture sophisticated military hardware. Remarkably, it has been able to do so in not just one, but across three domains: land, sea, and air.
Emphasis on augmenting the technical ability has also been the main secret behind Israel’s rise as a major arms exporter. It is the eighth largest in the world. In fact, today, Israel is a high-tech superpower. Israel’s culture of innovation and creativity has made it arguably the best producer of sophisticated and high-tech drones.
Israel is the first country in the world to use robots to replace soldiers on missions like border patrols. It has been the first country in the world with an operational system that could shoot down incoming enemy missiles. Israel has excelled in devising missile defense systems and mini spy satellites. Needless to say that the country is in big demand to sell all these items.
And if South Korea and Israel are now so successful, it is mainly due to the fact that these two countries spend the most in research and development (R&D) of their respective gross domestic products (GDP). Israel’s GDP spending on R&D is 4.2 percent (the world’s highest) and that of South Korea is 4.1 percent (the second-highest).
Viewed thus, if India wants to be a significant arms exporter or self-sufficient in arms that the Modi government is talking about, the Israeli and Korean lesson should be instructive – spend more on R&D. India cannot achieve its goal as long as its gross expenditure on R&D remains awfully as low as 0.65 percent of its GDP.
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