War in Ukraine: Who Will Benefit?Lt Kol Dr Maimunah Omar
At the time of writing, Russia has invaded Ukraine for the 6th day. The reason behind this tension is no longer elusive.
Russia does not want Ukraine to join NATO and it wants the latter to remain under Russian control, whereby for Ukraine as a legitimate and independent country, it is their right to choose their alliance or enemy.
Putting aside all the analyses regarding this tension, the real question now is, who will benefit from this war?
Many analyses and views mentioned that the Russian, western and NATO’s desire behind this war is to show indirectly to the world who is at the apex of power and consequently, winners will add value to their administration.
The one who is likely to benefit more in this situation is none other than the Military Industry Player. It is well acknowledged that the army industry makes billions of money every year from battles.
After World War II and the end of the cold war, there was no big-scale military operation reported in history. Weapons and ammunition are traded to fight al Qaeda, Osama bin Laden and some small-scale tension around the world.
Years later, the whole world has crumbled due to the Covid-19 Pandemic, and in effect, the weapons and military equipment business has suffered.
Therefore, the Ukraine-Russia tension is paramount to the revival of this industry to regain its revenue after a few years of the "cloudy" period.
The defence industry, including aerospace, is vast and complex. It serves both military and commercial markets. The US Defence Market was experiencing steady growth in 2020, boasting USD 778 billion. In 2020, the UK defence industry generated turnover to the value of 25.3 billion British pounds. Russia's defence sector, like U.S., forms a vital aspect of the country's national power.
However, unlike American defence companies, the Russian defence industry primarily belongs to the state and Russia's large defence corporations and their subsidiaries compete not in a free market but within a so-called administrative market—an ongoing redistribution of government resources. According to a report released from the Russian Government, the Russian defence industry exported weapons worth USD 13 billion in 2020. It is crystal clear that even though the tension is still escalating among Russia and Ukraine, they already have the winner.
The military industry not only produces and supplies weaponry but also controls a steady line of politicians all around the world. Firms in the United States continue to dominate the industry, with total sales of $285bn from 41 companies accounting for about 54 percent of all arms sales among the 100 biggest companies around the world.
The 26 European arms companies jointly accounted for 21 percent of total arms sales, or $109bn, and seven UK companies recorded arms sales of $37.5bn in 2020. Total sales of the nine Russian companies was $26.4bn in 2020 although decreasing from $28.2bn in 2019 and Arms sales from the top Chinese firms amounted to an estimated $66.8bn in 2020, 1.5 percent more than in 2019.
Who Will Pay the Price? Obviously, it will be the Ukrainians, where they will either be killed or injured.
Nevertheless, people worldwide will sooner or later feel the impact when the fuel price increases when many economic issues arise, since Ukraine is one of the most significant world agricultural and industrial exports countries.
Even the European countries will receive a significant influx of refugees from Ukraine- stemming from those crossing over to their territory, in time the border security issues will come into the picture. The Russian citizens themselves might be portrayed as an aggressive and intolerant nation, and the taxpayers in the country who funding this industry will also feel the burden and may face other ugly consequences as well.
Could the war be stopped? Yes, the war could be stopped, with the withdrawal of Russian troops from the Ukrainian soil provided that the Russians can have the assurance that Ukraine will not join the NATO. Yet again, it still raises doubts and uncertainty.
Nonetheless, to this day, the answer is still as hazy as the gloomy, smoky atmosphere in Kyiv.
Lt Col Dr Maimunah Omar is the Assistant Director of the Contemporary Security Study Center at the Malaysian Institute of Defense and Security (MiDAS), Ministry of Defense Malaysia.
The views expressed in this article are the author's own and do not necessarily reflect those of Sinar Daily.