This PPT provides an in-depth analysis of the international arms trade, covering its history, regulations, and the challenges associated with controlling the flow of weapons

1. ISSUES IN DEVELOPMENT
MILITARY: GLOBAL ARMS INDUSTRY AND ARM
TRADE
Ms. Davleen
kour
Asst Professor
MIER college of

2. INTRODUCTION
❖ The global arms industry refers to the collective
network of companies and organizations involved
in the production, development, and manufacturing
of military weapons, equipment, and related
technology.
Where as The arms trade, on the other hand,
specifically refers to the buying and selling of military
weapons and equipment between countries or non-
state actors.

3. HISTORY
❖ Medieval arms trade: Local blacksmiths crafted
weapons for kings, knights, and sold designs from
looted enemies during wars.
❖ Historically, arms trade was mainly on a national scale,
but with time, it evolved into an international
phenomenon, notably during the Napoleonic Wars and
both World Wars. The US, through the Lend-Lease
Policy in 1941, supplied arms to Britain. Post-World
War II, despite the Cold War tensions, states continued
buying and selling weapons amid global fears

4. HISTORY
❖ Despite the collapse of the Soviet Union and the
apparent victory of democracy, the US remains a
major global player in arms trade. With advanced
military technology, a substantial defense budget
unaffected by economic crises, and an effective
military, the US attracts clients worldwide.

5. THE ECONOMICS OF ARMS TRADE
❖ Total global military expenditure increased by 3.7 per cent
in real terms in 2022, to reach a new high of $2240 billion.
Military expenditure in Europe saw its steepest year-on-
year increase in at least 30 years.
❖ One important component of arms sales is the use of
offsets as described by Brauer & Dunne (2005), provide
claimed benefits to developing countries by justifying arms
expenditure and promoting local industrial activity. These
offsets can be direct (related to purchased equipment) or
indirect (unrelated to specific defense equipment)

6. THE ECONOMICS OF ARMS TRADE
❖ However, Research on military expenditure faces
challenges due to limited and accurate statistics,
compounded by varying external factors among
states. A neoclassical approach views the state as a
rational actor, balancing opportunity costs and
security benefits to maximize national interest.
This perspective treats military expenditure as a
pure public good, with economic effects
determined by its opportunity cost and a clear
trade-off between civil and military spending.

7. THE ECONOMICS OF ARMS TRADE
❖ Infact, Investing in military expenditures benefits
the economy by promoting a profitable arms
industry and supporting other sectors. From a
Keynesian perspective, government spending on
the military can stimulate economic growth,
demonstrating the concept of 'military
Keynesianism.'

8. NEGATIVE IMPLICATIONS
❖ According to Andrew Feinstein, author of The Shadow
World The Shadow World: Inside the Global Arms
Trade and a former member of the African National
Congress, legal and illegal arms markets are often
unclear and intertwined. He notes that bribery and
corruption are common in arms transactions, with
many involving illegality through middlemen. Citing
Transparency International, he highlights that 40% of
all global corruption in trade is linked to the arms
trade, an industry with average annual sales of $60
billion

9. NEGATIVE IMPLICATIONS
❖ Corruption remains widespread, as evidenced by 84%
of retired senior Pentagon officials securing positions
with defense contractors they had previously awarded
contracts to. With arms contract deals often shrouded
in secrecy for national security reasons, uncovering
and addressing such corruption is challenging. The UN
aims to address this issue by advocating for the signing
and ratification of the Arms Trade Treaty (ATT) by all
member states to prevent future corrupt arms trade
practices.

10. NEGATIVE IMPLICATIONS
❖ The arms race not only benefits states but also
smaller non-state actors like terrorist
organizations obtaining arms from the illegal
black market. This trade not only wastes
resources that could fund more productive
sectors and increases national debt but also
undermines citizens' sense of security within a
state.

11. NEGATIVE IMPLICATIONS
❖ Fuller (2003) introduces the concept of 'military
Keynesianism,' applying Keynesian economic
principles to military spending, creating demand
for military goods. While proponents see it as
beneficial for job creation, Garrett-Peltier (2010)
cautions against solely relying on military spending
for economic solutions, urging consideration of
alternative job creation in productive areas aligned
with long-term goals.

12. NEGATIVE IMPLICATIONS
❖ DEBATE
➢ JK Galbraith : For the price of a smallish fleet of manned
supersonic bombers, a modern mass transit system
could be built in virtually every city large enough to
have a serious bus line. What would be built then?
❖ As Fuller puts it, the arms trade is not to help boost the
state economy, but instead: …the booming arms industry is
driven firstly by the need for security in a volatile world
that some claim is actually more dangerous than during the
relative stability of the Cold War ‘balance of power’ era,
and secondly by the profit motive

13. NEGATIVE IMPLICATIONS
❖ Chomsky disagrees with Fuller, asserting that in a
world dominated by one superpower, like the US,
massive defense spending is unnecessary for
genuine security or strategic reasons Fuller adds
that the arms trade is a continuous cycle, creating
demand while arguing that the supposed "need to
upgrade security" is just rhetoric

14. NEGATIVE IMPLICATIONS
❖ As the arms industry, particularly in the US, grows,
Chomsky suggests that making weapons with built-in
obsolescence could increase profits. The idea is that
foreign buyers would constantly desire the latest
missile, tank, and plane models to "keep up with the
Joneses." This creates a dynamic where states
compete to purchase the newest weapons
technology, leading to an arms race. Once these
weapons become outdated, they are sold to other
countries at a lower price, enabling them to enhance
their national security

15. ILLEGAL ARMS TRADE
❖ In 1997, there were 13.2 million refugees and 4.9
million internally displaced people, with a
disproportionate number being women and
children. In Rwanda's refugee camps, child
mortality reached 300 per 100,000 per day.
Displaced communities experienced child
mortality rates over 60% higher than non-
displaced children in the same country.

16. NEGATIVE IMPLICATIONS
❖ Garrett-Peltier and Pollin's article reveals that in
the US, spending on clean energy, health care, and
education creates more jobs per dollar than military
spending. For example, if $1 billion is spent on
education instead of military expenses, over 26,700
new jobs would be created, compared to the mere
11,200 jobs generated in the military with the same
amount.

17. ILLEGAL ARMS TRADE
❖ Illegal arms trade, selling weapons unlawfully to
entities like terrorist groups, is a global concern. This
secretive trade is concentrated in conflict-prone
areas, accounting for 50% of all circulating weapons.
❖ Illegal arms traders not only sell locally
manufactured conventional firearms but also
military-grade weapons and combat vehicles. While
increased arms procurement alone may not create
conflicts, the excessive accumulation and
widespread availability can heighten tension.

18. ILLEGAL ARMS TRADE
❖ So, the UN's proposed Arms Trade Treaty (ATT), signed by 118
countries, aims to prevent uncontrolled arms flows to conflict
regions, fostering peace and security. It also seeks to hinder the
supply of arms to human rights abusers and violators of the law of
war, addressing a significant contributing factor to global instability.
❖ Despite having numerous human rights abuses, North Korea, Iran,
and Syria cynically disapproved of the Arms Trade Treaty (ATT),
which aims to prevent the type of atrocities they have committed.
These countries are also known for illegally arming terrorists and
dissident factions, making the ATT crucial for global security.

19. Short questions
1. ATT
2. NPT
3. CTBT
4. PTBT
5. Evaluate/critically analyse the ATT Treaty?
6. Examine how the global arms race affects the economy
of nations.
7. Write briefly on Global Arms Trade?
8. Discuss How the Global Arms Industry and Arms Trade
give rise to military conflicts.