Business update from John Birchall
The 1990s saw many civil wars take place in Africa. Most have now ended, so one would imagine that arms dealers have left the shade of the continent’s luxury, air conditioned hotels and headed to other parts of the globe. That would be an error of judgement, Africa is buying arms in large amounts and spending millions of US$ building up weapons and all the other equipment of war. Why has this dubious trade continued when billions of US$ have been spent bringing conflicts in Liberia, Sierra Leone and other countries to a close?
Since the end of the Cold War global spending on defence equipment has fallen by 35% but in Africa it has increased by 33%. In just one country, Uganda, military spending has increased by one-third this decade. It seems that pirates off the coast of Somalia, the persistent wars for resources in eastern Congo and the arrival of other ad hoc groups has led governments, business and even NGO’s to hire security personnel and such individuals need to be armed.
In another somewhat upsetting trend the arms dealers are often located in South Africa, where guns are still remembered by many as a way in which apartheid was enforced by a minority on the majority. Just as the ‘Rainbow Nation’ tries to show itself as a united country its arms dealers are selling increasing amounts of weaponry to fellow Africans.
So, Africa is both buying more arms and is also selling them to the ‘hot spots’ of the southern part of the former USSR and The Middle East – globlisation, though perhaps not at its best.
Traditional rules, churches and ‘peace’ groups across the continent are complaining but most governments simply say they are protecting their citizens – a primary duty of any government.
The continent for so long the buyer of arms is now set to become a major seller – a strange sign of progress?
Rank Country Spending ($ b.) World Share (%) — World Total 1464.0 100
1 United States 607.0 US$ 41.5 %
2 China 84.9 US$ 5.8%
3 France 65.7 US$ 4.5%
4 United Kingdom 65.3 US$ 4.5%
5 Russian Federation 58.6 US$ 4.0%
6 Germany 46.8 US$ 3.2%
7 Japan 46.3 US$ 3.2%
8 Italy 40.6 US$ 2.8%
9 Saudi Arabia 38.2 US$ 2.6%
10. India 32.7 US $ 2.1%
This might, in the difficult time between now and the end of term, raise the temperature of an AS Business Studies discussion on ethical trading!