Published: Tue, December 12, 2017
Finance | By Kristine Clayton

Global arms sales rise for first time in five years

Global arms sales rise for first time in five years

A new report by Stockholm International Peace Research Institute, SIPRI, revealed that despite the slump in global arms industry for five consecutive years, in 2016, arms producers world over saw US$375 billion in profits, with the USA weapons industry claiming over half the global sales.

Sales of arms and military services by the world's largest arms-producing and military services companies - the SIPRI Top 100 - totalled $374.8bn in 2016, according to new global arms industry data released by the Stockholm worldwide Peace Research Institute (SIPRI). SIPRI said last year's increase in weapons sales was the first time a rise occurred after five consecutive years of decline.

The total arm sales were equivalent to almost 0.5 percent of global Gross Domestic Product, up 38 percent since 2002, Anadolu Agency reported.

The institute said growth in arms sales was triggered by "ongoing military operations in several countries and persistent regional tensions that are leading to an increased demand for weapons".

According to the report, sales from United States firms rose four percent in 2016 to $217.2bn, accounting for 57.9% of the overall total.

Globally, US producers alone accounted for 57.9 per cent of the total sales figure, ahead of the British (9.6 per cent), the Russian (7.1 per cent) and the French (5.0 per cent). The Lockheed Martin, the world's largest arms producer, registered a sharp increase in sales by 10.7 per cent in 2016.

Sales of Western Europe arm producers totaled $91.6 billion, a rise of 0.2 percent from 2015. The arms sales of BAE Systems, the fourth largest arms producer globally, remained stable (up by 0.4 per cent). Vietnam was a new entry in the top-10 arms importers accounting for 3 percent of all global sales.

"The increasing nuclear weapons capability in North Korea has led to major investments in South Korea", Sipri senior researcher Pieter Wezeman told Agence France-Presse. This growth is primarily led by U.S. companies who control over half of world's arms sales. Sales by South Korean firms increased by over 20% in 2016, to $8.4 billion.

SIPRI's "emerging producers" category covers companies based in Brazil, India, South Korea and Turkey. 'Continuing and rising threat perceptions drive South Korea's acquisitions of military equipment, and it is increasingly turning to its own arms industry to supply its demand for weapons, ' says Siemon Wezeman.

President Moon Jae-in has stressed the urgency in improving South Korea's ability to defend against the North, which has test-fired three intercontinental ballistic missiles and conducted its sixth and most powerful nuclear test this year.

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