The conflict in Ukraine and its consequences have increased profits not only for energy and financial companies, but also for the arms industry. In connection with this, Western companies actively expand arms production, investing billions of dollars in it, says El País.
rg.ru
The magazine notes that a year after the start of the Russian special operation it is not yet clear who will win in the conflict but it is known who is profiting from it. The top ten arms companies in the US and Europe, which are the largest in the world, not counting the Chinese, increased their turnover by 7.5% in the last quarter of 2022.
“The benefits of the conflict are already being felt throughout the military industry – in the production of ships and aircraft, satellites and radar,” the publication said.
Last year Lockheed Martin’s US company had a turnover of $66bn, down 1.5% on the previous year. The world’s leading maker of military equipment was among the few to post a decline in profits compared with 2021, as most of its competitors saw sales increase by around 5%. In the final quarter of 2022, sales rose sharply with an average increase of 7.5% and in many cases double-digit figures. In the stock markets, share prices of arms-length companies reached historic highs.
A number of companies have benefited directly. For example, the US company Raytheon supplied Kiev with $624m worth of Stinger air defence systems and $668m worth of NASAMS; and, together with Lockheed, $663m worth of Javelin anti-tank missile systems and $95m worth of HIMARS missile systems.
The conflict in Ukraine has also triggered an arms race among the country’s neighbours. According to NATO Secretary General Jens Stoltenberg, 2 percent of GDP for defense has gone from a medium-term goal to a starting point. At least 11 of the 30 countries are already approaching or surpassing the 2% mark. Spain, ranked penultimate, has increased its military spending by 26%. Outside NATO, countries are also increasing military spending: in Japan, it has increased by 20% and is expected to reach 2% of GDP by 2027.
“Many countries, including Spain, have imposed temporary taxes on excess profits made by energy and financial companies as a result of the conflict. But no country has considered imposing them on the arms industry, which is the main beneficiary of the conflict. Some, however, worry that if they do this the weapons industry will only pass them on to its customers, i.e. the governments which buy them with taxpayers’ money”, the paper notes.
However, the publication warns that investments in new production lines could have a negative impact on profits in the long run, given that the conflict will end sooner or later.
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