At the beginning of the year, the Stockholm Peace Research Institute (SIPRI) traditionally starts publishing its new reports. Over the next few months, the Institute's specialists will announce the results of a number of studies on the international arms and military equipment market. This year's first SIPRI arms market report came out on February 22nd. Its topic was the state of the market in 2011-15. Swedish analysts have reviewed the indicators for this period and compared it with the previous "five-year" period, which came in 2006-10. Let's consider a new report.
General trends
As always, the main points of the report are listed in a short press release accompanying its publication. In addition, the main trends are included in the headline of the press release. This time, at the headline level, an increase in arms purchases by countries in Asia and the Middle East was noted, as well as the continued leadership of the United States and Russia in the export of military products. In addition to these trends, the report reveals some other interesting developments in the international market.
According to the calculations of SIPRI specialists, in 2011-15 the volume of the arms market grew by 14% compared to the previous five-year period. The market has been growing since 2004 and has not stopped yet. It should be noted that market indicators change every year, however, when considering the volume of purchases over five-year periods, the situation looks a little different.
Overall market performance over the past few decades
It is noted that in the past five years, the growth in the volume of imports of military products was provided mainly by the countries of Asia and Oceania. The list of the ten largest importers included six states in this region: India (14% of total world purchases), China (4.7%), Australia (3.6%), Pakistan (3.3%), Vietnam (2, 9%) and South Korea (2.6%). At the same time, there are also records. Thus, Vietnam has increased imports by 699% in five years compared to the previous period. Overall, Asia and Oceania's performance looks much more modest: the region's total imports grew by only 26%. At the same time, Asia and Oceania accounted for 46% of all purchases in 2011-15.
The countries of the Middle East demonstrate quite good growth rates of purchases. Over the last five-year period, this region has shown a 61% increase in purchases. The main factor that led to these results was the increase in purchases from Saudi Arabia. In five years, the country's costs increased by 275%, making it the world's second largest arms importer. Qatar increased spending by 279%, but the total volume of contracts left this country far beyond the top ten import leaders. Egypt and the United Arab Emirates increased their purchases by 37% and 35%, respectively.
As before, the United States remained in first place among the exporters of arms and military equipment. In 2011-15, their supplies accounted for 33% of the international market. The growth in comparison with the previous period was 27%. Russia ranks second and 25% of the market, increasing supplies by 28%. At the same time, it is noted that in 2014-15 Russian supplies decreased to the level of the end of the last decade.
China has shown remarkable growth in exports, which has managed to increase its order book by 88%. Among other things, this led to a change in the positions of other countries in the overall ranking. For example, France and Germany lost their places, which also showed a decrease in the main indicators. Thus, French exports fell by 9.8%, while German exports fell by almost half.
Also, SIPRI analysts in a press release note some other curious features of the market situation that have been observed over the past five years. For example, African indicators are of interest. In 2011-15, imports from African countries grew by 19%, with 56% of all supplies going to just two countries: Algeria and Morocco. One of the reasons for this situation with a disproportionate ratio of purchases from different countries may be the economic situation on the continent. Due to a lack of funding, the countries of Central and South Africa are unable to purchase a sufficient amount of weapons or equipment.
Mexico, Azerbaijan and Iraq showed good growth in imports - in 2011-15, their purchases grew by 331%, 217% and 83%, respectively. At the same time, the total volume of imports of European countries decreased by 41%.
Largest exporters
In recent years, the situation on the international arms and equipment market, namely the list of export leaders, has hardly changed. Countries rarely move more than one line up or down, but this time around, the top ten has seen major changes. For example, in 2011-15, Germany fell from third to fifth place, while France retained the fourth line, but gave way to China. Let's take a closer look at the leaderboard.
Largest exporters, their market shares and main buyers
"Top-10" exporters are as follows: USA (33% of total supplies), Russia (25%), China (5, 9%), France (5, 6%), Germany (4, 7%), Great Britain (4.5%), Spain (3.5%), Italy (2.7%), Ukraine (2.6%) and the Netherlands (2%). Thus, only ten exporting countries divided 89.5% of the market among themselves, and two-thirds of the market was occupied by only three leaders.
The United States again took the first place in terms of the volume of the world market with a share of 33%. In 2006-10, the United States held 29% of the market and showed growth in both absolute and relative terms. In the last "five-year" period, most of the American production went to Saudi Arabia (9.7% of all supplies), the United Arab Emirates (9.1%) and Turkey (6.6%).
"Silver" again belongs to Russia, which has increased its market share from 22% to 25%. A characteristic feature of Russian arms exports in 2011-15 was the decline in supply volumes observed since 2014. Nevertheless, this did not prevent the Russian industry from retaining and increasing its market share. The vast majority of Russian products (39%) went to India in 2011-15. The second and third places in terms of purchases were taken by China and Vietnam with 11% of supplies.
China is the third in the list of exporting countries. At the end of the last decade, it occupied only 3.6% of the world market, and now it carries out 5.9% of supplies. The growth in the volume of orders was 88%, which was a record for the period under review. The growth shown not so long ago has allowed China to overtake the UK, France and Germany. Most of China's military exports go to three countries: Pakistan (35%), Bangladesh (20%) and Myanmar (16%).
The fourth place in the list of leaders was kept by France, whose share, however, decreased from 7.1% to 5.6%, and sales fell by 9.8%. Thus, only changes in the indicators of other countries allowed it to keep the fourth line. The main buyer of French weapons in 2011-15 was Morocco (16%), the second and third - China (13%) and Egypt (9.5%).
Germany closes the top five with an anti-record in the new rating. In the last five-year period, it showed the largest decline in exports - 51%. Because of this, the share of German weapons on the market fell from 11% to 4.7%. The bulk of German products in the period under review were sent to the USA (13%), Israel (11%) and Greece (10%).
Among the top 10 exporters, some countries in the bottom half of the list showed good growth performance. Thus, British exports grew by 26%, Italian by 45% and Spanish by 55%. Due to this, the share of Great Britain in the world market grew from 4.1% to 4.5%, the share of Italy increased by 0.6% to 2.7%, and Spain now occupies 3.5%, not 2.6%. as it was before.
Largest importers
Market growth is primarily associated with the capabilities of importers. It is their desire to spend money on new weapons and equipment that leads to an increase in overall market performance. In 2011-15, India (14% of total imports), Saudi Arabia (7%), China (4.7%), the United Arab Emirates (4.6%), Australia (3.6%) showed particular success in this matter.), Turkey (3.4%), Pakistan (3.3%), Vietnam (2.9%), USA (2.9%) and South Korea (2.6%). It is noteworthy that the ten largest importers account for only 49% of all supplies. In addition, the top ten leaders have undergone the most significant changes over the past five years. Some countries dropped out of it, and other states took their places.
Major importers and their suppliers
India became the largest importer, accounting for 14% of global shipments. For comparison, in 2006-10, the Indian military retained only 8.5% of purchases. Russia remains the main supplier of weapons and equipment to India (70%). The second and third places were occupied by the USA (14%) and Israel (4.5%).
The second place among importers this time was taken by Saudi Arabia with 7% of world purchases. It also showed strong growth in military spending, starting at 2.1% in 2006-10. The three main arms suppliers for this country are as follows: the United States (46%), Great Britain (30%) and Spain (5, 9%).
The third place among importers remained for China, which reduced the volume of purchases of foreign products. In the previous period, Chinese orders accounted for 7.1% of the market, now only 4.7%. Nevertheless, even with such a reduction, China remained in the top three buyers. The bulk of military products (59%) China receives from Russia. France and Ukraine account for 15% and 14% of supplies, respectively.
The United Arab Emirates, increasing defense spending, increased its share in world purchases from 3.9% to 4.6%. In this they were helped by the main suppliers, which accounted for the majority of supplies: the USA (65%), France (8, 4%) and Italy (5, 9%).
The fifth line in 2011-15 is occupied by Australia, whose orders are equal to 3.6% of the world market. For comparison, in the previous five-year period Australian orders accounted for 3.3% of the market volume. The main arms supplier for this country is the United States (57%). Spain ranked second (28%), followed by France (7.2%).
***
Despite all the difficulties of an economic and political nature, the international market for arms and military equipment continues to grow. The current growth has been going on for more than 10 years, and so far there are no objective reasons why it can stop. In this regard, the arms supplying countries continue to fight for the market, receiving new contracts and fulfilling the agreements already signed.
Due to the absence of fundamental changes in the situation on the international market, the main trends that could be observed both in the past and in the year before last remain. The market as a whole is growing, and the shares of different countries in sales and purchases are gradually changing. At the same time, leading exporters of the market are increasing their shares, while other states have to be content with ever smaller volumes of orders.
As in last year's survey of market structure over five-year periods (2010-2014), the new report immediately shows an interesting trend. The top ten arms exporters remained unchanged. The first two places did not change at all, and the countries on the other lines only changed places in accordance with changes in their market shares. Much big changes have occurred again in the rating of importers. Some countries start rearmament programs and increase expenditures, while others complete them and cut funding, which leads to corresponding changes in the rating. As a result, the top ten importers have seriously changed both in composition and in the order of countries.
On February 22, SIPRI published a new report on the situation on the arms market in 2011-15. In about a month, the Swedish specialists should complete work on the next market report. Over the next few months, the Stockholm Institute for Peace Research is to publish several other similar documents devoted to various features of the international arms and equipment market.
Press release for the report:
Full text of the report:
