The independent resource on global security

Financial value of the global arms trade

The SIPRI Arms Transfers Database was not developed to assess the financial value of the international arms trade. Rather, the Trend Indicator Value (TIV) data produced by the Database is designed to serve as an indicator of the volume of military equipment transferred in the world.

The only means of making assessments of the financial value of the arms trade is to rely on official data provided by governments and industry bodies. There are significant limitations on using official national data in this way. There is no internationally agreed definition of what constitutes ‘arms’ and governments use different lists when collecting and reporting data on the financial value of their arms exports. In addition, there is no standardized methodology concerning how to collect and report such data, with some states reporting on export licences issued or used and other states using data collected from customs agencies.

Values of states' arms exports

The workbook at the link below contains official data on the financial value of statesarms exports.

Government and industry data on the financial value of national arms exports, 1994-2019

The data is taken from reports by, direct quotes from or direct communication with, governments or official industry bodies. The terms used in the column ‘explanation of data reflect the terms used by the original source. National practices in this area vary, but the term ‘arms exports’ generally refers to the financial value of the arms actually delivered; ‘arms export licences’ generally refers to the financial value of the licences for arms exports issued by the national export licensing authority; and ‘arms export agreements’ or ‘arms export orders’ refers to contracts or other agreements signed for arms exports. The workbook includes the sources for the latest five years for which data is available in every row.

The first tab in the workbook presents all available national data on arms exports between 1994 and 2019. The data is presented in the relevant national currency in current values.

The other two tabs in the workbook present data on the financial value of countriesarms exports from 2001 to 2019 converted into United States dollars. The second tab in the workbook gives the figures in millions of US dollars at current prices. Conversion to US dollars is made using the market exchange rates of the reporting year. The third tab gives the figures in millions of US dollars at constant (2019) prices. Conversion to constant (2019) US dollars is made using the market exchange rates of the reporting year and the US consumer price index (CPI).

The states included in the table are those that provide data on the financial value of ‘arms exports’, ‘arms export licences’ or ‘arms export agreements for any of the years covered.

Value of the global arms trade

According to the SIPRI Arms Transfers Database, states that produce official data on the financial value of their arms exports account for over 90 per cent of the total volume of deliveries of major arms. It is therefore possible to attain a rough estimate of the financial value of the total global arms trade using the data in the workbook.

However, there are significant limitations in using this data to make such an estimate. First, as noted above, the data sets used are based on different definitions and methodologies and are thus not directly comparable. Second, several states (e.g. the United Kingdom and the USA) do not release data on arms exports but only on arms export agreements and licences, while other states (e.g. China) do not release any financial data on total arms exports, export licences, agreements or orders.

Nonetheless, by adding together the data that states have made available on the financial value of their arms exports, as well as estimates for those that only provide data on arms export licences, agreements or orders, it is possible to estimate the rough total value of the global arms trade. For example, the estimate of the financial value of the global arms trade for 2019 was at least $118 billion. However, the true figure is likely to be higher.

Calculating the total value of the global arms trade

To calculate the total value of the global arms trade in 2019, figures for arms export deliveries were used where they are available.

Where figures for arms export deliveries in 2019 are not available but the figures for 2018 are, figures for arms export deliveries in 2018 have been used.

Where figures for arms export deliveries are not available for 2019 or 2018, the full figure for arms export agreements or orders in 2018 has been used, if available. The use of the full figure is based on an analysis of past cases in which states have released data on both arms export deliveries and arms export agreements or orders.

Where figures for arms export deliveries are not available for 2019 or 2018 and figures for arms export agreements or orders are unavailable for 2018, half of the figure for ‘arms export licences’ in 2019 has been used, if available. The use of half the figure (rather than the full figure) is based on an analysis of past cases in which other states have released data on both arms export deliveries and arms export licences.

In the case of Canada, the figure for arms export deliveries in 2019 has been doubled, as the available arms export figures for Canada exclude exports to the USA, which the Canadian authorities claim account for more than half of Canada’s exports of military technology.

The above-mentioned export licence-based estimate has been used for Germany, even though it provides figures for arms export deliveries. Germany’s figures for arms export deliveries only include exports of ‘war weapons’, which is a much more limited category of goods and services than is generally covered by arms export licences. The available figures for arms export deliveries for Germany therefore underestimate the total value of its arms exports.
 

For more information, please contact the SIPRI Arms Transfers Programme.