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ILLEGAL ARMS TRADE ANJALI PRABHAKAR SURESH KUMAR PROSENJIT SARKAR

International Business Environment - Arms Trade

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Page 1: International Business Environment - Arms Trade

ILLEGAL ARMS TRADEANJALI PRABHAKAR

SURESH KUMARPROSENJIT SARKAR

Page 2: International Business Environment - Arms Trade

“EVERY GUN THAT IS MADE, EVERY WARSHIP LAUNCHED, EVERY ROCKET FIRED SIGNIFIES, IN THE FINAL SENSE, A THEFT FROM THOSE WHO HUNGER AND ARE NOT FED, THOSE WHO ARE COLD AND ARE NOT CLOTHED. THE WORLD IN ARMS IS NOT SPENDING MONEY ALONE. IT IS SPENDING THE SWEAT OF ITS LABORERS, THE GENIUS OF ITS SCIENTISTS, THE HOPES OF ITS CHILDREN… THIS IS NOT A WAY OF LIFE AT ALL, IN ANY TRUE SENSE. UNDER THE CLOUD OF THREATENING WAR, IT IS HUMANITY HANGING FROM A CROSS OF IRON.”

— FORMER U.S. PRESIDENT, DWIGHT D. EISENHOWER, IN A SPEECH ON APRIL 16, 1953

Page 3: International Business Environment - Arms Trade

OBJECTIVES

BY THE END OF THIS PRESENTATION, YOU’LL UNDERSTAND:• WHAT IS ARMS TRADE• HISTORY OF ARMS TRADE• BUSINESS OF ARMS TRADE• WHAT IS ILLEGAL ARMS TRADE• IMPACT OF ILLEGAL ARMS TRADE

Page 4: International Business Environment - Arms Trade

WHAT IS ARMS TRADE?

• THE ARMS INDUSTRY IS A GLOBAL BUSINESS THAT MANUFACTURES WEAPONS AND MILITARY TECHNOLOGY AND EQUIPMENT.

• COMMERCIAL INDUSTRY INVOLVED IN THE FOLLOWING: • R&D• ENGINEERING• PRODUCTION• SERVICE OF MILITARY MATERIAL, EQUIPMENT, AND FACILITIES

• ARMS PRODUCING COMPANIES, ALSO CALLED DEFENSE CONTRACTORS OR MILITARY INDUSTRY, PRODUCE ARMS MAINLY FOR THE ARMED FORCES OF STATES.

• DEPARTMENTS OF GOVERNMENT ALSO OPERATE IN THE ARMS INDUSTRY, BUYING AND SELLING WEAPONS, MUNITIONS AND OTHER MILITARY ITEMS.

Page 5: International Business Environment - Arms Trade

HISTORY OF ARMS TRADE

• ARMS TRADE IS AS OLD AS THE HISTORY OF WAR• FIRST COUNTRIES TO BECOME SELF-SUFFICIENT IN ARMS PRODUCTION:

• FRANCE• THE UNITED KINGDOM• NETHERLANDS • GERMANY

• THE MODERN ARMS INDUSTRY EMERGED IN THE SECOND HALF OF THE NINETEENTH CENTURY• PRODUCT OF THE CREATION AND EXPANSION OF THE FIRST LARGE MILITARY-INDUSTRIAL

COMPANIES

Page 6: International Business Environment - Arms Trade

HISTORY OF ARMS TRADE (CONTD)

• SMALLER COUNTRIES (AND EVEN NEWLY INDUSTRIALIZING COUNTRIES LIKE RUSSIA AND JAPAN) COULD NO LONGER PRODUCE CUTTING-EDGE MILITARY EQUIPMENT WITH THEIR INDIGENOUS RESOURCES AND CAPACITY• CONTRACT THE MANUFACTURE OF MILITARY EQUIPMENT, SUCH AS BATTLESHIPS, ARTILLERY PIECES AND RIFLES

TO FOREIGN FIRMS• 1854 –BRITISH GOVERNMENT AWARDED A CONTRACT TO THE ELSWICK ORDNANCE COMPANY FOR THE SUPPLY OF

HIS LATEST BREECH LOADING RIFLED ARTILLERY PIECES• INDUSTRIALIST WILLIAM ARMSTRONG (OWNER, ELSWICK ORDNANCE COMPANY) BECAME ONE OF THE FIRST

INTERNATIONAL ARMS DEALERS• SOLD HIS WEAPON SYSTEMS TO GOVERNMENTS ACROSS THE WORLD FROM BRAZIL TO JAPAN• 1884 – OPENED A SHIPYARD AT ELSWICK TO SPECIALIZE IN WARSHIP PRODUCTION

• ONLY FACTORY IN THE WORLD THAT COULD BUILD A BATTLESHIP AND ARM IT COMPLETELY• FACTORY PRODUCED WARSHIPS FOR MANY NAVIES, INCLUDING THE IMPERIAL JAPANESE NAVY• SEVERAL ARMSTRONG CRUISERS PLAYED AN IMPORTANT ROLE IN DEFEATING THE RUSSIAN FLEET AT THE BATTLE OF TSUSHIMA IN 1905

Page 7: International Business Environment - Arms Trade

PURE BUSINESS

• GLOBAL MILITARY SPENDING – US$ 1.5 TRILLION ANNUALLY (2.7% OF WORLD GDP)Supplier Total Sales in US Dollars (billions) Percent of total sales

United States 220.608 44% Russia 83.323 17% France 41.96 8% United Kingdom 27.037 5% China 17.808 4% Germany 22.068 4% Italy 14.278 3% Other European 48.259 10% Others 27.109 5%

Rank Country Amount spent Percent of total 1 Saudi Arabia 75.7 21% 2 India 46.6 13% 3 UAE 20.3 6% 4 Egypt 14.3 4% 5 Pakistan 13.2 4% 6 Venezuela 13.1 4% 7 Brazil 10.9 3% 8 Algeria 10.3 3% 9 Israel 9.5 3% 10 South Korea 9.2 2% 11 All other developing countries 145.168 39%

Exporters Importer

s

Page 8: International Business Environment - Arms Trade

PURE BUSINESS (CONTD)2014 rank Supplier Arms exports

1 United States 101942 Russia 59713 China 19784 France 12005 Germany 1110

2014 rank Recipient Arms imports1 Saudi Arabia 26292 India 15503 China 13574 Indonesia 12005 Vietnam 1058

Rank Company Country1 Lockheed Martin United States2 Boeing United States3 BAE Systems United Kingdom4 Raytheon United States5 Northrop Grumman United States6 General Dynamics United States7 EADS European Union8 United Technologies Corporation United States9 Finmeccanica Italy

10 Thales Group France

Page 9: International Business Environment - Arms Trade

PRODUCTS

Page 10: International Business Environment - Arms Trade

ARMS CONTROL

• ARMS CONTROL REFERS TO INTERNATIONAL RESTRICTIONS UPON THE FOLLOWING: 1. DEVELOPMENT2. PRODUCTION 3. STOCKPILING4. PROLIFERATION5. USAGE OF

1. SMALL ARMS2. CONVENTIONAL WEAPONS3. WEAPONS OF MASS DESTRUCTION.

• TYPICALLY EXERCISED THROUGH THE USE OF DIPLOMACY, WHICH SEEKS TO PERSUADE GOVERNMENTS TO ACCEPT SUCH LIMITATIONS THROUGH AGREEMENTS AND TREATIES, ALTHOUGH IT MAY ALSO BE FORCED UPON NON-CONSENTING GOVERNMENTS.

Page 11: International Business Environment - Arms Trade

IMPORTANT INTERNATIONAL ARMS CONTROL TREATIES

• GENEVA PROTOCOL ON CHEMICAL AND BIOLOGICAL WEAPONS, 1925• OUTER SPACE TREATY, SIGNED AND ENTERED INTO FORCE 1967• BIOLOGICAL WEAPONS CONVENTION, SIGNED 1972, ENTERED INTO FORCE 1975• MISSILE TECHNOLOGY CONTROL REGIME (MTCR), 1987• CHEMICAL WEAPONS CONVENTION, SIGNED 1993, ENTERED INTO FORCE 1997• OTTAWA TREATY ON ANTI-PERSONNEL LAND MINES, SIGNED 1997, ENTERED INTO FORCE 1999• NEW START TREATY, SIGNED BY RUSSIA AND THE UNITED STATES IN APRIL 2010, ENTERED INTO

FORCE IN FEBRUARY 2011• ARMS TRADE TREATY, CONCLUDED IN 2013, ENTERED INTO FORCE ON 24 DECEMBER 2014.

Page 12: International Business Environment - Arms Trade

WHAT IS ILLEGAL ARMS TRADE?

• ALSO KNOWN AS ARMS TRAFFICKING OR GUN-RUNNING• ILLEGAL TRAFFICKING OR SMUGGLING OF CONTRABAND WEAPONS OR

AMMUNITION

Page 13: International Business Environment - Arms Trade

IMPACT OF ILLEGAL ARMS TRADE

• WIDESPREAD IN AREAS OF POLITICAL TURMOIL LIKE THE AFRICAS, OR SOME MID-EAST COUNTRIES

• MORE THAN 63 MILLION GUNS TRAFFICKED INTO INDIA & PAKISTAN• MARKET VALUE: ESTIMATED VALUE OF THE GLOBAL ARMS MARKET - $60

BILLION/ YEAR• ILLEGAL ARMS TRADE IS HARD TO ESTIMATE• ILLEGAL SMALL ARMS MARKET ESTIMATED AT 10-20% OF THE VALUE OF THE

TOTAL GLOBAL ARMS TRADE

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“WHEN A COUNTRY DECIDES TO INVEST IN ARMS, RATHER THAN IN EDUCATION, HOUSING, THE ENVIRONMENT, AND HEALTH SERVICES FOR ITS PEOPLE, IT IS DEPRIVING A WHOLE GENERATION OF ITS RIGHT TO PROSPERITY AND HAPPINESS. WE HAVE PRODUCED ONE FIREARM FOR EVERY TEN INHABITANTS OF THIS PLANET, AND YET WE HAVE NOT BOTHERED TO END HUNGER WHEN SUCH A FEAT IS WELL WITHIN OUR REACH. OUR INTERNATIONAL REGULATIONS ALLOW ALMOST THREE-QUARTERS OF ALL GLOBAL ARMS SALES TO POUR INTO THE DEVELOPING WORLD WITH NO BINDING INTERNATIONAL GUIDELINES WHATSOEVER. OUR REGULATIONS DO NOT HOLD COUNTRIES ACCOUNTABLE FOR WHAT IS DONE WITH THE WEAPONS THEY SELL, EVEN WHEN THE PROBABLE USE OF SUCH WEAPONS IS OBVIOUS.”

-1987 NOBEL PEACE PRIZE WINNER OSCAR ARIAS SANCHEZ, PRESIDENT OF COSTA RICA FOR HIS EFFORTS TO END CIVIL WARS ACROSS CENTRAL AMERICA THROUGH THE ESQUIPULAS II ACCORD

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THANK YOU