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Western arms makers see sales fall, Russia rises: SIPRI

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Stockholm: Arms manufacturers in North America and Western Europe dominated international arms sales in 2014, but their market share dropped while Russian and Asian companies saw theirs rise, the Stockholm International Peace Research Institute (SIPRI) reported today.

Total turnover for the 100 biggest arms and military services companies declined for the fourth year in a row, falling by 1.5 per cent from 2013 to stand at USD 401 billion (364 billion euros).

The top company was US-based Lockheed Martin, which saw sales grow by 3.9 per cent to USD 37.5 billion for 2014.


Companies based in Western Europe and the United States continue to dominate the top 100, with 80 per cent of the total market share. But sales for Western European and US companies decreased by 3.2 percentage points between 2013 and 2014.

In Western Europe “a large part of the defence spending, which is missing, is from procurement. It’s easier to cut procurement than to cut salaries — so the quickest thing to do is just buy less,” said Siemon Wezeman, a senior researcher at SIPRI’s Arms and Military Expenditure Programme.

Meanwhile, the 36 companies representing the rest of the world on SIPRI’s list saw their sales soar by 25 per cent, boosted by an almost 50-percent rise in Russian arms sales.

“Russian companies are riding the wave of increasing national military spending and exports,” said Wezeman.

The combined annual revenue growth of the 11 Russian companies on SIPRI’s list from 2013-14 was 48.4 per cent,according to the report.

The top Russian company on the list was Almaz-Antey, taking 11th place with a turnover of USD 8.84 billion. Almaz-Antey manufactures the BUK missile, which was allegedly used to shoot down a Malaysia Airlines Boeing 777 on July 17, 2014 in Ukraine.

Much of Russia’s weapons production is delivered to its own armed forces, but it also has large clients in other parts of the world, including India and China — both big players in the arms race.

Moscow has also provided arms to Syria since the Soviet era, though Damascus is now receiving very little, Wezeman said.

After an almost five-year conflict that has left 250,000 people dead and forced millions of others to flee, Syria no longer has the financial means to buy weapons from Russia.

“The Russians basically say: you pay, then we deliver, otherwise we don’t do it,” Wezeman said.

Russian arms sales don’t appear to have suffered much from the international sanctions slapped on Moscow after its annexation of Crimea in March 2014. Weapons industry officials have said the sanctions have merely prompted Russia to seek out new markets and develop new technologies.