Procurement: The Big Boom


November 20, 2010:  Global arms exports are booming, and are on their way to hitting $70 billion next year. In the last few years, the exports have been growing at the rate of over ten percent a year. Over the past five years, the U.S. and Britain have been the major exporters, mainly because of aircraft sales. Russia has been third, for the same reason. Military aircraft, along with their electronics, missiles, smart bombs and technical assistance, account for nearly half of arms exports. The big seller has been jet fighters and fighter-bombers, but transports and reconnaissance aircraft have been strong sellers as well. 

The eleven nations (United States, Britain, Russia, China, France, Germany, Italy Sweden, India, Japan and Spain) that make these aircraft have sold them to over fifty nations. Not only are these aircraft expensive to buy (nearly $50 million each for first-line fighters), but they are the most expensive military vehicles to operate. This is especially true as the price of oil keeps going up.

After aircraft, and their accoutrements, the next big big ticket item is warships. Small arms, which do most of the killing each year, are near the bottom of the list.

The sharp growth in arms exports is largely because, in the past decade, global defense spending has increased nearly 50 percent, to over $1.4 trillion. That's about 2.5 percent of global GDP. After the Cold War ended in 1991, defense spending declined for a few years, to under a trillion dollars a year. But by the end of the 1990s, it was on the rise again. The region with the greatest growth has been the Middle East, where spending has increased 62 percent in the last decade. The region with the lowest growth (six percent) was Western Europe. The current recession got global defense spending stalled at  $1.4 trillion for a year or two. But the spending growth has resumed now that the recession is over.



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