Who Benefits from the International Arms Trade?

Oliver Ramsay Gray

The arms trade is big business, with global military spending last year totalling just over $1.5 trillion. Although the (legal) international arms market was only a fraction of this, at $83 billion, this still represents a significant market for potential profits. But who really benefits from the international arms trade, and what about the non-financial costs and benefits?

The clearest beneficiaries of the arms trade are, unsurprisingly, arms companies themselves; last year, the largest ten in the US and Europe had revenues of $203 billion (excluding non-military sales), the lion’s share of the international arms business. These international revenues, as David Cameron never fails to insist, contribute jobs and economic prosperity to the exporting country. For instance, the 1985 Al-Yamamah arms deal with Saudi Arabia has brought the UK $45 billion already and could bring in another $40 billion. However, the picture is not as simple as that. A shift in resources and demand over the long-term towards non-military economic sectors would likely bring about greater increases in standards of living. Although a challenging aim, this holds the greatest potential benefits to any exporter and can be seen in the past, for example when military spending fell by over 1% of global GDP in the years following the end of the Cold War. We must recognise that although the arms industry will always benefit from the international arms trade, the idea that the exporting nation inevitably benefits as well, as David Cameron persistently argues, is flawed in the long-term view.

Arms exports can also be used as a political tool, another means by which a state can strengthen strategic relations, bring others under its sphere of influence and project its power into other parts of the world. This is visible in Russia’s relationship with Syria, which has been tied up with the sale of missile defence systems and fighter jets – in part, a means to increase Syria’s dependency on Russia. Recent years in Syria serve to show how these exports have also helped Russia secure its strategic aims in the country by buttressing the Assad regime and so have worked as a type of limited intervention (though this was of course escalated last year). Clearly the exporter benefits in numerous ways here, as does the does the direct recipient, though the picture muddies when wider considerations are taken into account. Was Assad’s strengthening a “beneficial” development?

Arms sales are well known to increase the frequency and intensity of conflict. Even the legal international arms trade is closely tied up in this damaging situation and the costs of conflict are huge in both human and economic terms. This hurts not only those directly involved in conflict but has damaging knock-on impacts around the world. Although war might benefit its few victors politically, its costs are huge to everyone else involved. However, with the current international arms trade system the actions of one state can do little to affect the legal supply or demand for arms. Thus, in terms of the benefits to the exporter laid out above it makes sense for arms exporters to not take a unilaterally moral position. Of course, in the longer term, the benefit shifts towards a situation in which the supply of arms is restricted. However, this can only be achieved at a multi-state level rather than by one state taking it upon themselves.

We can see that it is overwhelmingly arms companies and, to a lesser extent, exporting states who benefit from the international arms trade. The situation is more complex when looking at recipients and considering the wider world. What does seem apparent, however, is that it would be counter to an individual state’s interests to clamp down on its own arms exports unilaterally when, without multi-state agreement, the benefits would shift to other exporters while the damaging impacts of supplying arms remain.