Vladimir Putin’s Russian war in Ukraine is already stirring the world military market, which is preparing for a new arms race due to insecurity in Europe and the continued rise of China in Asia. The United States positions itself as the main beneficiaries of the process.
Washington is the biggest arms seller in the world, with 39% of the market between 2017 and 2021, according to Sipri (Stockholm International Peace Research Institute). Moscow, the second, with 19%.
The war has prompted the West and allies such as Japan and Australia to impose economic sanctions on Putin, limiting his ability to transact in the international system. With the dollar as a weapon, the US and Europe avoid the risk of World War III inherent in military action against Russia.
Ongoing Russian contracts and future negotiations come into question from now on. On Wednesday (16), the US announced the supply of modernized versions of the F-15 air superiority fighter to Egypt.
It so happens that the Arab country had already ordered 24 aircraft from Russia for the same function, the powerful Sukhoi Su-35S, which made its combat debut in Ukraine. The deal was announced at US$ 2 billion (R$ 10 billion, at the exchange rate on Friday, 18), and there are reports that five planes had already been delivered.
Egypt is the third largest buyer of Russian weapons, with 13% of its deliveries. The country is a curious phenomenon, having reached third place in the general ranking of military expenditures, with a 73% increase over its purchases from 2012 to 2016. For experts, those who finance the impoverished dictatorship are the allies Saudi Arabia and the United Arab Emirates. , interested in maintaining a strong flank to the west.
At the beginning of the year, with the Ukrainian crisis boiling, rumors arose that Cairo would withdraw from the deal. Since 2017, anyone doing military business with the Kremlin has been at risk of being affected by credit restrictions in the US, among other penalties imposed due to the annexation of Crimea in 2014.
This context had already taken the Su-35S out of a tender in Indonesia, a traditional user of Russian war material in Asia, where Moscow has several customers. The country ended up announcing this year a purchase worth US$ 22 billion (R$ 110 billion) of F-15 fighter jets and French Rafale models.
The same doubt applies to Turkey, which had announced an increase in military cooperation with Moscow after purchasing the best S-400 anti-aircraft systems on the market. As a member of NATO, the western military alliance, Ankara must put plans on hold. The country, in turn, should benefit from the propaganda of the performance of its Bayratktar-TB2 drones in Ukraine, after they were successful in the 2020 Azerbaijani-Armenian war and in Libya. The project of Sukhoi’s new radar stealth fighter, the Checkmate, which depended on external interest, must be left to the Greek calends.
There is a compensation for the Russian situation, which is the weight on its military market share of two countries that refused to criticize the invasion of Ukraine: the ally China and the friendly India.
They are the biggest buyers of Russian weapons: 28% of them go to New Delhi and 21% to Beijing. The relationship with India dates back to Soviet times and is a hallmark of the country’s independence, which has strong ties to the US in the anti-China Quad group and has just purchased French jets and Israeli systems.
“The point is that Indians will now be able to ask themselves what payments will be like going forward,” says Pieter Wezeman, a senior researcher at Sipri. The biggest question is about the purchase of S-400 batteries, ordered for US$ 5.4 billion (R$ 27 billion) in 2018 by the country.
The market shares pointed out by Sipri do not refer to the dollar value earned by the sellers, but to a more complex index, which includes the sales volume and the military value of the products.
In gross earnings, the United States is the undisputed leader: it sold US$ 138 billion (R$ 690 billion) in 2021, compared to US$ 15 billion (R$ 75 billion) for the Russians.
The data varies greatly because there is no unified metric. According to Sipri, in 2020 the 100 largest companies in the sector in the world sold US$ 531 billion (R$ 2.6 trillion), but the value could be much higher.
European insecurity with the invasion of Ukraine and the continued perception of risk in the Indo-Pacific put the world on the path of an arms race. “We can expect this increase, it’s something you’ll see over a decade, because military sales take time,” says Wezeman. “If you in Brazil, in the peaceful environment in which you live, are worried about having submarines, imagine in Europe today.”
Brazilian participation in the international market, in which it was once one of the ten biggest players in the 1980s, is now minimal. In the Sipri ranking, the country occupies the 21st place among exporters and 33rd among importers – this includes submarines and helicopters from the 2009 military agreement with France and the Swedish Gripen fighter, being introduced by the FAB (Brazilian Air Force). ).
The most immediate impact of the crisis for Brazil is the difficulty, revealed by the sheetto continue cooperation with Moscow on the technology for the fuel and reactor of its future nuclear submarine.
In addition, the FAB had deactivated, shortly before the war, the only squadron of Russian aircraft it ever had, of 12 Mi-35 helicopters based in Porto Velho (RO). “Despite the logistical difficulties, the decisive factor was the operational aspect”, says the commander of the Force, Carlos de Almeida Baptista Júnior.
He dismisses a relationship with the conflict and claims that there would be no significant impact from the sanctions because the maintenance of the helicopters was carried out by a Brazilian company trained for two years by Russian Helicopters. The point is that the device is expensive to operate and not a priority – in ten years, each device flew an average of 3 minutes a day.
European demand may favor Embraer, which has already sold its KC-390 medium freighter to NATO members Portugal and Hungary. It is already embodied in the German announcement to triple its 2022 military budget in an emergency, reaching €100 billion (R$ 553 billion), due to the war.
With that, the Americans did well. Berlin has announced that it will buy 35 of its fifth-generation F-35 fighter jets. In addition, another 15 European Eurofighter Typhoon fighter jets and new American anti-tank and anti-aircraft systems are expected to be purchased, and Washington is expected to take a bid to supply US$4 billion (R$ 20 billion) in heavy helicopters.
Poland, the country most affected by the Ukrainian crisis due to its historic disagreement with the Russians and the reception of almost 2 million of the current 3.3 million refugees from the neighboring country so far, announced that it will order heavy American Reaper attack drones.
“The market impact of the war is likely to be greater for Russia. More broadly, some countries are revising their assumptions about the need for military spending,” said aerospace defense expert Douglas Barrie of the IISS (International Institute for Strategic Studies, from London).
Just before the war, the IISS launched its Balanço Militar, an annual reference work on military expenditures — which also includes expenditure on personnel and investments. The US is sovereign, with US$754 billion spent in 2021, almost equivalent to the roughly US$800 billion (R$4 trillion) of the next 14 in the ranking and more than double the US$ 360 billion (R$ 1.8 trillion) from the rest of the world.
Russia is in fifth place, with US$ 62.2 billion (R$ 311 billion), but the real number is higher because the cost of production is lower in the country. In the general ranking, Brazil dropped from 13th to 16th position from 2020 to 2021, with US$ 21.8 billion spent (R$ 109 billion) – around here, 80% stay with active and inactive personnel.
