Arms industry

The arms industry is a massive global industry. Its products include guns, bullets, missiles, military aircraft, and their associated consumables and systems. The arms trade is the exchange of arms or weapons among two or more parties, generally but not exclusively sovereign nations.

It is estimated that yearly over 150 billion dollars ($150B) is spent on arms.

Almost every industrialized country in the world has its own arms industry to supply its own military forces. Some countries also have a substantial trade in weapons for legal civilian use. There is an illegal trade in small arms everywhere. In addition, there is a substantial international trade in arms, both legal and illegal. Frequently, there are links between the legal arms trade and the illegal arms trade, with legally purchased weaponry being re-sold for illegal purposes.

Massive contracts for weapons are awarded by governments, making arms contracts of substantial political importance for the giver and the recipient. There are often allegations of political corruption in regard to large arms contracts.

The link between politics and the arms trade can result in the development of what General Eisenhower described as a military-industrial complex, where the armed forces, commerce, and politics become unhealthily close.

Amnesty International, Oxfam, and the International Network on Small Arms say that roughly 500,000 people are killed each year by the use of small arms, and that there are over 600 million of such arms in circulation.

Ethically, the arms trade is problematic for many as they see supplying the weapons for a conflict as morally akin to becoming involved oneself, but at less risk to one's own nation or company. Essentially, they see the arms industry as means of profiting from war and death when failure to supply arms could lead to an early disengagement.

Top 15 arms exporters in 1999

United States,$33bn33bn

United Kingdom, $5.2bn

Russia, $3.1bn

France, $2.9bn

Germany,$1.9bn

Sweden, $700m

Australia, $600m

Canada, $600m

Israel, $600m

Ukraine, $600m

Italy, $400m

Belarus, $300m

People's Republic of China, $300m

Bulgaria, $200m

North Korea, $100m
source: Federation of American Scientists, [1]

United States arms trade

In the US there is a distinction made between foreign military sales (FMS), where the Pentagon is used as an intermediate negotiator, and direct commercial sales (DCS), where a company directly negotiates with its buyer, in which case the company needs a license from the State Department.
The Defense Department manages the excess defense articles (EDA), weapons from the US military given away or sold at bargain prices, emergency drawdowns, assistance provided at the discretion of the President, and international military education and training (IMET).

In the period from 1989 to 1996 the global value of direct commercial arms sales was US$ 257 million, of which 45% was exported from the US.

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International military education and training

In fiscal year 2002 a total of 70 million USD was spent on IMET, spread over 113 countries.

In fiscal year 2002 a total of $46 million worth of drawdowns were provided to Nigeria ($4 million), Afghanistan ($2 million), Georgia ($25 million), the Philippines ($10 million) and Tunisia ($5 million).

Defense contractors are weapon manufacturers or companies participating in weapon research and warfare simulation.