Over the past few years, many interesting events and trends have occurred in the world’s defense markets. This article is the first of a multi-part series exploring some recent trends and stories. Arms sales are an important metric for scholars of all disciplines, as upward (or downward) trends in arms transfers can indicate periods of relative peace or periods of tension and often reflect the sentiments of policy-makers as well as the public. Further, arms purchases can reveal the ambitions of a specific nation; for example, an amphibious equipment buy signals that a nation is seeking expeditionary capabilities.
This article will examine some overall trends in the defense markets. The content of this article is based on a highly informative report compiled by the Stockholm International Peace Research Institute (SIPRI), which compares data from 2005-2009 with data from 2010-2014.
The SIPRI report notes a few major trends, one of which is a marked increase in Gulf weapons imports during 2010-2014. Iran’s nuclear rapprochement with the United States was likely a main driver for this increase, as many Gulf states fear the influence of an Iran not crippled by Western sanctions. Instability in Iraq and Syria has not only driven Iraqi imports upwards but also rattled Iraq’s neighbors, who fear a spillover. Gulf nations such as Saudi Arabia and the UAE stand out as prolific spenders despite receiving no financial military assistance from the US. In fact, Saudi Arabia has recently become the world’s largest defense importer. The remarkable flow of imports into the Gulf is also a result of that area’s exceptionally poor ability to manufacture its own military equipment, which results in disproportionate imports.
Gulf imports will only expand into 2015 and beyond. For one, many Saudi-coalition nations are depleting their caches of guided ordinance as a result of the intensive aerial campaign being undertaken in Yemen. In addition, the Saudi-led coalition is suffering attrition of armored vehicles and other equipment, which may need to be replaced in the future. Second, Iran has recently reached a nuclear deal with the West, which will likely improve Iran’s economic situation; while many Gulf states publicly support the nuclear deal, they are undoubtedly wary of the increased influence it may net Iran. These fears are likely a factor driving the purchase of high-end combatants, such as the upgraded LCS derivatives which Saudi Arabia has recently inked deals for.
The US is the main financial beneficiary of increased weapons imports into the Gulf region. Most Gulf militaries are US-allied and furnish their armed forces with US-built equipment. US defense firms such as Raytheon and Lockheed Martin are leading manufacturers of the precision-guided munitions used in the Yemeni and Syrian air campaigns. As a result, the value of US defense exports tends to increase in conjunction with Gulf imports. As would thus be expected, US arms exports rose over twenty percent during 2010-2014.
The other major trend noted by SIPRI was an increase in Asian arms imports. The increase can be at least partially attributed to fears over the South China Sea conflict. Recent Chinese brinkmanship and outlandish territorial claims have forced nations such as Vietnam to modernize their navies. Such modernization has a tendency to drive import statistics upwards, as advanced naval assets are quite difficult to furnish and often have to be purchased instead of built domestically. Natural disasters and global warming have driven the market for HA/DR assets, another commonly imported item.
The SIPRI study’s designation of lengthy five year periods for analysis reduces the likelihood that the results were anomalous in nature. As the circumstances driving the increase in Gulf and Asian imports have not alleviated and may even worsen, these regions will likely continue to exhibit import growth well into the future.