STOCKHOLM, June 11: Sales by the world’s 100 largest weapons manufacturers rose by three per cent in 2005 to $290 billion, spurred primarily by the United States, the Stockholm International Peace Research Institute (Sipri) said on Monday.
Companies in the US and western Europe dominated Sipri’s top 100 list, together accounting for 92 per cent of arms sales in 2005, the latest year for which figures were available, the institute said in its 2006 yearbook.It said 40 US firms accounted for 63 per cent of the sales, while 32 western European companies for 29 per cent and nine Russian companies for two per cent.
Companies based in Japan, Israel and India accounted for most of the remaining six per cent.
“A major factor behind current developments in the arms industry has been the high and rising fixed costs of advanced weapons systems,” it said.
“Companies use mergers and acquisitions to achieve economies of scale, but the increased concentration of production can also lead to reduced competition and thus remove incentives to keep prices down and innovation up,” it said.
Four US companies increased their sales by more than $1 billion: L-3 Communications, Raytheon, Northrop Grumman and General Dynamics. The same was true for British company BAE Systems and Italian Finmeccanica.
“Two ways in which the United States’ post-September 2001 policies have affected the US arms industry are through the increase in demand from the department of defence generated by the massive increase in military expenditure to finance the military operations in Afghanistan and Iraq, and through their impact on arms exports,” it said.
“These policies have also led to a strong growth in expenditure on homeland security, thereby increasing demand in the broader security industry,” it said.
It said 11 companies increased their arms sales by more than 30 per cent, including four Russian companies and several with increased sales in information technology and services.—AFP
