As the old oldage goes, wars are good for business, and Ukraine war is filling lots of pockets with big bucks.
The Russia-Ukraine invasion began about two months ago and has been classified as the darkest time in Europe’s history since World War 2. But, both the countries are caught in a frozen conflict. So, who is winning the war?
It is the military industry and defense giants. This article focuses on the silent players who don’t want the decade’s worst military confrontation to end.
The Global Arms Market Profiting from Russia-Ukraine War
A handful of players controls the global Arms market. From 2016 to 2020, the US, Germany, Russia, France, China, and the UK have exported over 80% of the global weapons. And, except for China, every country on the list is directly involved in the Ukraine conflict.
Out of the six countries, five are permanent members of the UN security council. With Russia as the aggressor, the US, UK, France, and Germany are arming Ukraine.
But there is one country that maintains a towering presence in the global defense market, the United States. Accounting for 37% of the worldwide export, the US leads the list as the biggest exporter of significant amry weponeries. Furthermore, the defence giant homes the top five-arm manufacturers in the world:
Together, the above arm companies sold over $160 billion worth of military-grade weapons in 2019. And with the Ukraine war raging, the business has never been better.
With Russia’s invasion of Ukraine, the stock prices of the defense companies in the US stock market shoot off the roof. For example, the share of Raytheon shot up by 8%; General Dynamic witnessed an increase of 12%, and Northrop Grumman a whopping 22%.
Most manufactured products of these companies are battling in Ukraine. From terminal equipment, including thousands of missiles, tanks, rifles, pistols, and machine guns. Since the beginning of the war, the US has earmarked over $3billion worth of weapons in Ukraine, and most of it came from the existing government’s stockpiles.
What Can Be Done?
There are limitations to what can be accomplished in the face of Putin’s imperialism. Russia’s ongoing threat, Ukraine, looks to have little chance of demilitarising.
Attempts to de-escalate the situation have been made, with Nato, for example, officially rejecting Ukrainian President Volodymyr Zelensky’s call to establish a no-fly zone. However, massive financial incentives on both sides to increase weapons levels undercut these attempts.
The west and Russia both have a significant defense-industrial complex. Their massive weapons industries rely on, enable, and influence them. Moreover, newer high-tech offensive capabilities, including drones and advanced AI-guided autonomous weapons systems, have bolstered this.
The war has created commercial opportunities for western defense contractors. And the Ukraine war could leave a temporary void for European and US arms giants to gain further competitive advantage, move steps ahead in the global arms race, and incentivize new conflicts.
Ukraine War: Who are the Big Winners?
With soldiers battling on the ground in the air over Ukrainian land, defense giants will emerge as the big winners of the Ukraine war.
“I think again recognizing we are there to defend democracy and the fact is eventually we will see some benefits in the business over time.”Gregory Hayes, CRO, Raytheon
But is the west’s weapon transfer all about defending democracy or reaping off big bucks from the attrition war?
There is no denying that Ukraine needs help, but does the war-torn country need all of these weapons being poured onto its land? The US’s exit from Afghanistan was supposed to halt the American war machine, but it looks like it has just shifted gears and turned towards Ukraine.
“Because for defense companies to make money, the war must continue.”
The Aftermath of the Ukraine War
In the aftermath of the Russia-Ukraine conflict, governments and companies must look at methods to reduce the arm industry’s power and influence.
This might include treaty obligations to limit the sale of certain weapons, multilateral funding for nations who agree to reduce their defense sector, and sanctions against arms corporations that appear to be advocating for more military spending. Fundamentally, it would entail assisting movements that oppose the advancement of military capabilities.
Clearly, there is no easy solution, and it will not happen quickly. Still, it is critical that we recognize as a global society that long-term peace is unattainable without removing as much as possible the booming economic sector of weapon manufacturing and sales.