The military-industrial complexes of the leading states of the planet constitute an important part of the modern world industrial and scientific-industrial sector. The total world turnover of purely military products in 2009 can be estimated at about $ 400 billion. At the same time, internal orders play a dominant role in the activities of defense companies.
WE WORK FOR OWN
Despite the widespread attention to the export of weapons, the total global volume of interstate supplies of military products and related services in 2009 can be estimated at about $ 60 billion (excluding supplies of used weapons and military equipment). Thus, exports account for no more than 15% of the sales volume of the global military-industrial complex. In other words, the export of arms is frankly secondary in comparison with the work of the world military-industrial complex for national governments and national armed forces.
This circumstance is not surprising if we remember that the United States of America is the main military producer in the world.
The last decade has been a period of rapid escalation of military spending in the world. The total volume of military spending of all countries increased from 707 million dollars in 2001 to about 1.531 trillion dollars in 2008, although the subsequent global economic crisis slowed down this growth. The main contribution to this indicator was made by the United States, waging wars in Iraq and Afghanistan and the "global war on terrorism" in general, Russia, China and India, as well as third world countries.
US military spending in fiscal 2009 was $ 712 billion (including $ 515.4 billion - the "formal" military budget). This is from the total volume of 46, 5% of world military spending. In the same fiscal year, direct US appropriations for military procurement totaled $ 140 billion. Another $ 40 billion was earmarked for R&D expenditures. To this can be added purchases in the interests of other US law enforcement agencies. In addition, about 23 billion dollars more is the volume of US military exports (excluding production at enterprises owned by American companies in other countries). Thus, in addition to half of the world's military spending, the United States accounts for about half of all world military production.
The role of the American military-industrial complex can be judged by the rating of the 100 leading defense companies in the world (see table).
In this rating, out of the 20 leading companies in the global defense industry, 15 are American and only five are formally European, and in reality, most of the sales of the nominally British BAE Systems are in the United States. By the way, the largest Russian defense industry company in terms of sales, the Almaz-Antey Air Defense Concern, ranks 22nd in the world table of ranks.
The armed forces of other great powers are also very large customers. Thus, the defense procurement budget of Great Britain in 2009 (excluding R&D) amounted to about 11.7 billion pounds (about 18 billion dollars), France - 17 billion euros, Germany - 7 billion euros, Japan - 9 billion dollars. In 2009-2010, Russia spends about 370 billion rubles ($ 12 billion) a year on purchases for the Russian Ministry of Defense, but already in 2013 the Russian procurement budget is planned at the level of 690 billion rubles (about $ 23 billion). India spent $ 10 billion on military purchases in 2009, and will spend $ 12 billion in 2010. Finally, China's procurement budget can already be estimated at a minimum of about $ 25 billion in 2009, and its further significant growth is expected.
AND IF TO COMPARE …
With all this, the role of the world military-industrial complex should not be exaggerated. The $ 400 billion looks like a colossal amount, but it is lost against the background of the indicators of civilian industries, primarily trade, oil and gas production, banking and insurance, automotive, telecommunications and information technology. Suffice it to say that the turnover of the largest American retailer Wall-Mart (the largest company in the world) - in other words, a supermarket chain - in 2009 amounted to 408 billion dollars, that is, it was comparable to the figures characterizing the work of the entire global military industry.
Major international oil and gas companies such as Royal Dutch Shell, Exxon Mobil and BP had sales of $ 250-280 billion each in 2009. Japanese Toyota - $ 204 billion Russian Gazprom (50th company in the world ranking) - $ 94 billion.
In 2009, 42 global companies had sales of more than $ 100 billion each and there was not a single defense company among them. Boeing had sales of $ 68 billion in 2009 (91st in the world), but less than half of them came from the military - $ 32 billion. The largest military contractor in the world, Lockheed Martin Corporation, with its $ 45 billion (of which $ 42 billion was military), takes only 159th place among the world's companies - at the level of PepsiСo, Renault, UBS Bank, German Railways and the Chinese automaker Dongfeng.
Thus, the military business is currently not super-profitable and so economically and politically significant on the scale of the world economy. Arms manufacturers and dealers have long ceased to be the main tycoons of world business, and the weight and influence of the national military-industrial complex in developed countries is very limited. The global arms trade, for all its political sensitivity, is not the sale of oil or consumer goods, but a much narrower and economically insignificant segment of world trade. For example, the world market for contemporary art (only contemporary!) Is now estimated at $ 18 billion a year.
OBJECTIVE - DIVERSIFICATION
Currently, the leading position among the world's defense companies is occupied by diversified associations, the dominant role in which is played by the aerospace and electronic industries. The largest American (and therefore world) defense corporations, as well as BAE Systems, grew out of aircraft companies. Thus, the aerospace and electronics industry now dominates the world's defense industry, and aviation weapons systems are the most expensive of all types of military equipment.
Considering the world's leading defense companies (from the same top twenty), the following main characteristic features can be distinguished:
- structurally they are diversified holdings;
- the basis of their activity is the aerospace, rocket and electronic industries;
- they actively strive to diversify and increase the specific share of the civilian sector in their activities;
- they were created in the last two decades as a result of active consolidation and takeover of other companies;
- with regard to military sales, they depend primarily on the domestic market.
Speaking about the diversification of the activities of large defense companies, the following two aspects should be noted: the development of various branches of military production (aviation, electronics, missiles, ground equipment, sometimes shipbuilding), and diversification between military and civilian industries. It is precisely the narrowness and, to some extent, "small-scale" military production that is the main incentive to diversify and expand participation in the civilian sector.
Opportunities for cooperation with the same oil and gas or telecommunications sector promise such prospects, in comparison with which purely military production looks obviously losing. For example, the management of the same Lockheed Martin announced ambitious plans (or rather dreams) to bring the structure of its military and civilian sales to a 50-50 ratio (now the corporation's civilian sector accounts for no more than 7% of sales).
Thus, the goal of many of the giants of the world defense industry is to become more civilian companies than military ones. For the main money is made in civilian industries, not in the military.
ABBREVIATIONS EVERYWHERE
Despite the colossal US military spending and the impressive-looking defense budgets of other Western countries, the long-term outlook for Western defense companies does not seem so optimistic. The United States is facing the inevitability of cutting military spending to reduce its bloated budget deficit. In view of the need to cut the military budget, the Pentagon was forced to abandon the implementation of a number of promising programs. Suffice it to mention here the ambitious program of creating a promising system of ground combat equipment FCS.
As for Western Europe, the trend of cuts in military spending has been observed there for a long time, and has accelerated in the last couple of years. The new Conservative UK government plans to cut the military procurement budget from £ 11.7 billion to £ 9 billion by 2014. France is cutting its military purchases in 2011 by 1 billion euros. Germany has embarked on yet another cycle of very drastic cuts in the Bundeswehr and in military spending. In Japan, there has been a continuous trend of reducing military spending since 2001.
Such trends in the domestic markets of defense products in the West, combined with the ever-growing cost of military R&D, which makes it difficult for defense companies to conduct them, forces the latter to search for sources of expanding the sale of weapons, military equipment, and equipment for their equipping (but the capacity of the world defense export market limited) and diversification of production by increasing the share of civilian products. Finally, an almost decisive resource for the development of the military-industrial complex in the West remains the merger of defense companies in order to create integrated and diversified holdings capable of more efficient operations in shrinking national markets and accumulation of resources in order to finance promising R&D, on which competitiveness in the market depends.
