Why are global arms sales increasing despite the pandemic?

The global arms industry has had a field day during the pandemic, selling more weapons in 2020 compared to the previous year. 

The world's 100 largest arms dealers sold armaments and services related to the military worth $531 billion (about 470 billion euros), which means an increase of 1.3 percent compared to 2019, says a new report compiled by Stockholm International Peace Research Institute (SIPRI). 

This is the sixth year in a row that sales of the major armaments companies have increased. However, it was the slightest increase in three years.

Resistant to Covid shock

"Although the global gross domestic product fell by a good 3.1 percent in 2020, the armaments industry managed to increase by 1.3 percent," said SIPRI researcher Alexandra Marksteiner of the German press agency. "We interpret this as an indication that global arms production is proving to be quite resilient to the shock of the Covid-19 pandemic and the resulting economic downturn."

A previous SIPRI report published in the spring had already shown that many countries in the world had invested more money in buying military-grade weapons than ever before, ignoring the harsh economic challenges that most people faced during the pandemic.  

In large parts of the world, military spending has grown, according to the German-Austrian expert Marksteiner. Some governments have even accelerated their payments to cushion the effects of the pandemic. The US continues to lead in the arms trade, followed by China and the UK.

US arms companies have consistently held the top five positions in the ranking since 2018. The 41 US companies among the top 100 generated a total of $285billion (+ 1.9 percent) - more than half (54 percent) of all sales. In second place is China with 13 percent, followed by Great Britain with 7.1 percent. Russia in fourth place, on the other hand, experienced a significant decline of 6.5 percent.

The downward trend since the peak in Russian arms sales in 2017 has thus continued. SIPRI identifies two reasons. On the one hand, the state armament programme came to an end in 2020. But there are also indications that the pandemic has had an impact. Some corporations will have postponed arms deliveries and if nothing is delivered, no payment is made. French companies also recorded a decline, by 7.7 percent. 

Increase in German armaments sales

Germany saw an average overall increase of 1.3 percent. However, there are clear differences among the four German groups in the top 100. Armaments sales by Rheinmetall (27th place) and Hensoldt (78th) grew by 5.2 and 7.9 percent respectively, according to SIPRI. The shipbuilders ThyssenKrupp (55) and Krauss-Maffei Wegmann (70), on the other hand, dropped 3.7 and 7.5 percent respectively. Overall, the sales of the four German corporations amount to $8.9billion.

All four are higher in the ranking than in 2019, and that is frightening, according to Greenpeace disarmament expert Alexander Lurz. 

"The urgent task of the new federal government is now to stop at least the arms sales of German armaments companies to dictatorships and regimes that violate human rights," he said. 

Lurz added that it is "shameful" that, of all things, the arms industry can increase its sales, saying the traffic light coalition must drastically reduce military spending and put the money into health, social and climate protection.

The Catholic aid organisation Misereor criticised the countries, saying they were setting the wrong priorities in times of crisis. Arms deals are also a kind of global pandemic, said Chief Executive Pirmin Spiegel of the Neue Osnabrücker Zeitung. He also called for the new federal government to take arms export controls and disarmament seriously.

The aircraft manufacturer Airbus is viewed by SIPRI as a trans-European group. With an increase of 5.7 percent to almost 12 billion dollars, the group rose from 13th to 11th place. 

SIPRI looks at the arms sales of the 100 largest corporations, all sales of heavy weapons and military services. Since 2015, when SIPRI also listed data from Chinese companies for the first time, the increase has been 17 percent.