US and Chinese arms companies shared the lion’s share of sales worldwide in 2019, while the Middle East made its first entry in the ranking of the 25 largest armaments and military companies states a report by the International Institute for Peace Studies (SIPRI) published today.

Last year, the US arms industry accounted for 61 percent of the sales of the world’s 25 largest companies, ahead of China, which accounted for 15.7 percent, according to Stockholm-based SIPRI.

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The total turnover of this top 25 increased by 8.5%, reaching 361 billion dollars, an amount five times the annual budget of the United Nations peacekeeping operations.

Six American and three Chinese companies figure in the top ten of the list. Only one European company took a position in it: the British BAE Systems (7th).

For Lucy Berro-Sintro, director of SIPRI’s armaments and military spending program, “this ranking reflects the fact that China and the United States are the two countries with the highest armaments spending in the world, with companies cut and sewn for it.”

And if US dominance in the sector is not exactly news, for China – whose revenues in the largest industries in the sector increased by almost 5% in one year – “this rise is in line with the implementation of modernization reforms in the People’s Liberation Army since 2015,” added the researcher, answering a question of the French Agency.

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The American groups Lockheed Martin, Boeing, Northrop Grumman, Raytheon and General Dynamics monopolize, in this order, the first five positions of the world ranking. Chinese industries AVIC, CETC and Norinco occupy the 6th, 8th and 9th places.

“Europe remains somewhat fragmented (…) but if you combined European companies, you could reach European companies of the same level” as the US and China, according to Berro-Sintro.

Although Airbus (European, 13th in the ranking) and Thales (French, 14th) can boast of having the largest presence abroad (24 countries each) – ahead of the American Boeing – this is primarily due to the fact that “European companies are more internationalized than others,” according to the researcher.

For the first time, a company from the Middle East, EDGE of the United Arab Emirates, which was created by merging 25 entities, enters the top 25.

EDGE, which ranks 22nd, “shows how the combination of high domestic demand for military products and services, combined with the desire to reduce dependence on foreign suppliers, is driving the growth of armaments companies in the Middle East,” said Peter Weseman, another SIPRI researcher.

SIPRI also notes the presence of the French group Dassault, which jumped from 38th to 17th place in 2019, thanks to exports of the Rafale aircraft.

Two Russian companies, Almaz-Antey (15th) and United Shipbuilding (25th), also figure in the ranking, as does Italian Leonardo, 12th in world turnover.

Lucy Berro-Sintro notes that although Russian companies were in better shape a few years ago, thanks to a major program to modernize Russian military equipment, their momentum has “slowed down a lot.”

For the researcher, two reasons justify their shrinkage: the sanctions imposed on Russia after the annexation of the Crimean peninsula in 2014 and the fall in oil and gas prices, on which the Russian economy depends to a large extent.

“Russia has been forced to slow down its efforts to modernize its military equipment (…) As a result, fewer orders are being placed by the Russian state, fewer plans are being made, and revenues are falling,” he said.

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Source: ANA MPA