Arms Industry: From National Affair to Global Business Issue
Global Indicator-The development and trend of arms industry
During the past century, the arms industry entailed a significant shift away from traditional, single country patterns of weapons production towards internationalization of the development, production and marketing of arms. For example, as shown in the picture below, the volume of the arms trade has been on the rise during the past decade from around 35 billion in 2002 to around 60 billion in 2009 in total.
http://www.globalissues.org/article/74/the-arms-trade-is-big-business#GlobalArmsSalesTrends2002-2009
Apart from increasing arms sales, there is also an increasing trend of international cooperation of arms production and development as illustrated in the figure below.
How does the development of arms industry indicate the globalization process?
Globalization refers to a shift toward a more integrated and interdependent world economy. It comprises of two components which are globalization of markets and globalization of productions. These two components have one common concept of supraterritoriality. It means that the production process and the markets of the products or services provided are not necessarily limited to one country's boundary; instead, the only territory is the globe. And logistic advancement is one of the most important dirver of globalization. http://365painfreedays.blogspot.com/2010/04/114-see-beyond-your-diagnosis.html
This is exactly the same situation in the arms industry. In the past, most countries have preferred to be self-sufficient in arms production; arms development was perceived to be a top national secret and there was no such thing as cross border arms trade or co-development. However, as mentioned above, starting from few decades ago, countries can freely export and import arms globally and participates in arms collaboration program so that governments can jointly develop and manufacture a weapon system. “Eurocommunists and labour governments in both the case and the periphery, adopted the ideology of the “lean state,” deregulation, privatization and the notion that everything must be evaluated in terms of global efficiency and competitiveness.” (Chase-Dunn, Kawano and Nikitin n.d.) For example, major co-development programs include the West European NH-90 utility helicopter and the U.S.-Japanese FSX fighter program. All these changes show that globalization process is taking place and leading to the result that arms are more and more perceived as commodity instead of secret.
It is notable that the arms industry not only indicates the globalization process, but it also reflects the geographical expansion of the globalization process."This geographical feature of the global system is one of its uniquenesses, and it makes possible for the future a level of normative order that has not existed since human societies were very small and egalitarian" (Chase-Dunn and Hall, 1997) This is so true when applying in the arms industry. Thirty years ago, only a few third world countries joined in the arms manufacturing, but since 1970s, more than 20 countries have participated in hundreds of cooperative arms projects, including co-production programs between developing and industrialized nations such as K-1 tank jointly developed by Korea and the United States.
What are the implications of the globalization of arms industry?
Positive implications of the globalization of arms industry
1. Economic benefits
By going globalized and engaging in more international co-development and coproduction programs, defense companies not only can enjoy the economies of scale in arms production, lower risks in research and development, but most importantly, can strengthen their competitiveness and chances of survival by gaining the access to foreign markets.http://blog.trademart.in/
2. As a mean to achieve political goals
By participating in international collaborative arms programs and promoting arms transfer, country can strengthen its friends and allies around the world militarily. For example, during 1950s and 1960s, as a result of the Cold War, the transfer of U.S. weapons technology to Western Europe led to the establishment of strong relationships between U.S and Western Europe. http://www.worldwar1.com/tlwarorg.htm
3. Military prowess could sometimes translate into economic prowess
Globalization and other collaborative arms activities could affect not only military balances and arms sales, but overall economic development and competitive postures. At least, arms collaboration can have the consequence of helping to create new competitors in the international arms market. Besides, arms industry has long been regarded as a major force behind domestic economic development since a successful transition of military technology to commercial sectors such as aerospace or electronics could result in huge economic benefits. For instance, some of the military technologies developed during World War II and 1960s have established the technological base for today’s wireless broadband networks and Internet, invading the consumer markets. Hence, the globalization of arms industry which offers an excellent opportunity for buyers who are most likely third world countries to gain access of foreign high technologies is actually strengthening their economic positions.
Negative side of the globalization of arms industry
1. Arms races
Arms trade is increasing. On the surface, everything is great. However, it is now increasing out of control. The global trade in military equipment reached $20.6 billion in 1978, but it rose to over $60 billion in recent years. The implication of this phenomenon tells us that more and more countries are trying to increase both qualitative and quantitative of weapons and the competition between states have become more and more intense. In fact, technology transfers and licensed production arrangements have enable some Third World countries to build up their defense industries. The developing nation recipients (such as Saudi Arabia, India and UAE) are able to produce weapons by themselves and export those weapons to the developed countries which further contributed to arms race.
The main reason why the countries continuously increase both quantitative and qualitative of arms is that they think military power can somehow reflects their own political influence around the world. Generally, they perceive the leading-edge states such as US are more likely to have a higher status in the world. Therefore, most countries especially those developing nations have the need for substantial military arms to be perceived as a global player.
For example, with the new equipment the Saudi’s F-15s will be a serious threat to targets in Israel. To compensate Israel (and to persuade some reluctant congressmen to approve the Saudi sale), US allows Israel to add 10 F-15s to the 40 it has ordered already. (Barnaby, 1981)
2. Security Issue
An important feature of the current global arms trade is the increasing number of Third World countries participatants. Over the past decade, several developing countries have established significant defense industries. Technology transfer and licensed production arrangements enhanced the Third world countries’ military power. However, third world weapons production could in some instances, seriously threaten regional security. (Actually, there is already an example of this- the production of Jericho missiles by Israel.) (Barnaby, 1981)
References:
Jackson, D. (2009, April 1st). commercialiaztion of military technologies. Retrieved February 8th, 2010, from The official publication of IWCE Urgent Communications: http://urgentcomm.com/mobile_voice/mag/military-communications-technology-transition-200904/index.html
Shah, A. (2010, October 5th). The Arms Trade is Big Business. Retrieved February 8th, 2011, from Global Issues: http://www.globalissues.org/article/74/the-arms-trade-is-big-business#GeopoliticalandEconomicAgendas
Bitzinger, R. A. (1994). The globalization of the arms industry; the next proliferation challenge. International Security .
Barnaby, F. (1981, Mar). Arms Industry-a seller's market. Bulletin of the Atomic Scientists , pp. 11-13.
Christopher Chase-Dunn, Y. K. (July 26- August 1, 1998). Globalization: A World-Systems Perspective.
Spear, J. , 2004-03-17 "The Globalization of the Arms Trade and Security" Paper presented at the annual meeting of the International Studies Association, Le Centre Sheraton Hotel, Montreal, Quebec, Canada Online <.PDF>. 2009-05-26 from http://www.allacademic.com/meta/p72221_index.html
Brutto, Dan. "Globalization 4.0 and the New Logistics." Vital Speechs of The Day, 2010: 512.
Chase-Dunn, Christoper, Yukio Kawano, and Denis Nikitin. Globalization: A World-Systems Perspective. http://wsarch.ucr.edu/archive/papers/c-d&hall/wc98.htm (accessed 1 17, 2011).
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