The New Global Arms Race Is Scarier Than the Last

(Bloomberg View) -- If you're looking for hard data proving that the world is increasingly insecure, look no further than the output statistics of the world's top 100 arms manufacturers.

The global arms industry just registered its first rise in annual sales since 2010, according to fresh data from The Stockholm International Peace Research Institute. The combined revenues of the world's 100 biggest weapons producers increased 1.9 percent from 2015 to 2016. That amounts to a 38 percent increase (in constant 2016 dollars) from 2002, when SIPRI started compiling the data. While the 2008 financial crash stalled an upward trend in global arms sales, it now looks likely to resume.

Meanwhile, global arms exports have returned to levels not seen since the end of the Cold War, according to another SIPRI report this year. Military spending is also beginning to grow again after a short slump that was clearly related to the crisis, most alarmingly in some of the world's least stable regions:

The New Global Arms Race Is Scarier Than the Last

The U.S. remains the global leader in terms of manufacturing arms (57.9 percent of the top 100 producers' revenue accrues to U.S. firms) and buying them (36 percent of the total). But buying trends are a sign of the slowly fading role of the U.S. as global policeman. In 2007, the U.S. accounted for 61 percent of defense industry sales and more than 41 percent of the defense spending. Now, the non-Western world is spending more to protect itself.

Defense industry sales, the subject of SIPRI's latest report, rose in part thanks to U.S. growth, fueled by increased deliveries of F-35 warplanes and by consolidation in the military services industry. But other nations also contributed to global growth. As threats from the North grow, the top South Korean defense producers increased their sales 20.6 percent compared with 2015. Ukraine's state-owned Ukroboronprom, the country's only representative in the Top 100, increased sales by 25.1 percent as the country boosted its military budget and attempted quickly to rebuild its armed forces.

Russia, despite a long recession in 2015 and 2016, increased military sales in both years. China's growing arms exports suggest it is increasing sales -- though SIPRI's data didn't cover its manufacturers.

During the Cold War, the arms race was between the North Atlantic Treaty Organization and the Soviet bloc. The focused nature of the competition made it easier to deescalate and shrink weapons stockpiles when the Soviet Union fell apart. Now, it's everyone for themselves.

  • Middle Eastern and North African countries are arming themselves for local conflicts. Ukraine, resigned to the limited nature of U.S. help, is forced to stand on its own. Eastern European countries, alarmed by U.S. President Donald Trump's seemingly fluctuating commitment to NATO, are rushing to build up their defenses as much as they can.
  • Russia, energized by its recent military success in Syria, is building up its defense industry to support the country's assertive geopolitical stance and boost exports of weaponry now tested in real, large-scale conflict.
  • China's building a military base in Djibouti and likely planning others for "missions beyond [its] periphery," according to a Pentagon report. Like Russia, China is overhauling its military for modern warfare.

This is a world of few security guarantees as America's willingness to use that dominance quickly and efficiently is no longer taken as a sure thing. The status of a U.S. ally is no longer enough, as Saudi Arabia and Egypt have recently demonstrated by building ties with Russia. It may not even be desirable, as Turkish President Recep Tayyip Erdogan shows by refusing to hide his irritation with U.S. policies and acting out of line with U.S. interests in Syria. 

The world needs a new way to encourage peace, security and mutual trust. Instead, it's getting more weapons.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Leonid Bershidsky is a Bloomberg View columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website

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