The ongoing conflict between Russia and Ukraine, which began in 2014, has had far-reaching consequences for both countries and the global geopolitical landscape. While the human toll of this conflict cannot be overstated, it is also essential to examine how the conflict has had unintended consequences, particularly in bolstering the military-industrial complex. In this article, we will explore how the Russia-Ukraine war has enhanced militarism and benefited the military-industrial complex.
The Russia-Ukraine conflict began in 2014, following the Ukrainian Revolution of Dignity. Russia annexed the Crimean Peninsula from Ukraine and began supporting pro-Russian separatists in eastern Ukraine. The conflict has resulted in the deaths of over 13,000 people and the displacement of millions more. In February 2022, Russia launched a full-scale invasion of Ukraine. This was the largest military conflict in Europe since World War II. The invasion has been met with strong international condemnation, and many countries have imposed severe sanctions on Russia.
As of September 25, 2023, the United Nations Office for the Coordination of Humanitarian Affairs (OCHA) reports that the Russia-Ukraine conflict has resulted in over 13,000 casualties, including more than 3,000 civilians. The crisis has led to the displacement of over 8 million people within Ukraine and over 6 million who have sought refuge in neighboring countries. Infrastructure, including homes, schools, hospitals, and roads, has suffered widespread damage, exacerbating the humanitarian situation. Additionally, the conflict has triggered a global food crisis due to Ukraine’s role as a major exporter of wheat and other agricultural products. Furthermore, the sanctions imposed on Russia have caused higher energy and food prices, contributing to inflation worldwide and impacting the global economy.
The Military-Industrial Complex: A Brief Overview
The term “military-industrial complex” was famously coined by President Dwight D. Eisenhower in his 1961 farewell address. He warned against the undue influence of the defense industry, which includes arms manufacturers, lobbyists, and government agencies, on national policy.
The military-industrial complex is a term used to describe the close relationship between the military, the government, and the defense industry. These three groups work together to promote and maintain militarism, which is the belief that military strength is essential to national security and international order.
Over the decades, this complex has grown in size and influence, with a vested interest in perpetuating military conflicts to sustain its profitability.
Defense Budgets and Spending The conflict has also prompted many countries, especially in Eastern Europe and NATO member states, to increase their defense budgets. The Russia-Ukraine conflict has led to a significant increase in military spending by Western countries. In 2022, the United States allocated more than $48 billion in supplemental appropriations for security assistance for Ukraine. Other Western countries, such as Germany and the United Kingdom, have also announced significant increases in military spending.
The United States and its NATO allies have spent tens of billions of dollars helping Ukraine defend itself from a brutal Russian invasion, and rightly so. Military assistance provided by states to bolster Ukraine’s war effort with Nato members has crossed $40bn [€38bn] in military aid.
Since the invasion European leaders have pledged unprecedented increases to their military budget. By mid-May 2022, bloc members had announced almost €20bn in increases with the European Commission considering as a matter of urgency the “short-term need to replenish and expand defense stocks including to compensate for the military assistance to Ukraine”.
Similarly, the EU earmarked half a billion euros for joint arms procurement and announced future increases to the European Defence Fund, which finances the research and development of arms. Structural changes were taking place across the EU, not only to fast-track arms to Ukraine, but also to make large pools of public finance available to the highly lucrative arms industry.
These budget increases are driven by concerns about regional security and the need to deter potential aggressors. Consequently, governments allocate more funds to defense procurement, which further enriches the military-industrial complex.
On European Defence Innovation Day, European Defence Agency chief executive Jiří Šedivý said that ‘the brutal Russian war of aggression in Ukraine vividly shows why we need to urgently strengthen European defence’, while the European Commission’s high representative for foreign affairs and security policy, Josep Borrell, added that “we either innovate [sic] or we risk becoming irrelevant in the field of security and defence”.
Arms Sales and Exports One of the most obvious ways in which the Russia-Ukraine conflict has benefited the military-industrial complex is through increased arms sales and exports.
This increase in military spending is a major windfall for the military-industrial complex. Defense companies are able to charge higher prices for their products and services, and they are able to sell more weapons and equipment to the military. The Russia-Ukraine conflict has also led to an increase in the demand for military products and services from other countries. Countries that are concerned about the growing threat from Russia and China are increasing their military spending and buying more weapons and equipment. This increased demand for military products and services is also benefiting the military-industrial complex. Defense companies are able to sell more weapons and equipment to more countries.
As tensions escalated, both sides sought to bolster their arsenals, leading to a surge in demand for weapons, ammunition, and military equipment. Arms manufacturers profited immensely from this demand, with many countries around the world rushing to purchase the latest military hardware.
The war in Ukraine has increased demand for weapons as Russia ups production and Western nations seek to replace stock donated to Kyiv. Let us take the number one weapons manufacturer for the US being Lockheed Martin company for instance. Lockheed manufactures the famous anti-tank Javeline missiles that have been donated by the US to Ukraine. Around March 2022, Lockheed Martin was faced with increasing production of these in-demand weapons.
Technological Advancements The arms race spurred by the Russia-Ukraine conflict has incentivized military research and development. Innovations in military technology, such as autonomous drones, cyber warfare capabilities, and advanced weaponry, have received substantial investment. As a result, defense contractors have reaped the benefits of these advancements, while further fueling the complex’s influence.
The Russia-Ukraine conflict is being viewed by the Pentagon, military services, and major weapons contractors as an opportunity to significantly expand the U.S. arms industry, far beyond what is necessary to support Ukraine. Proposed plans include the construction of new weapons factories, a substantial increase in ammunition and anti-tank weapon production, and the relaxation of weapons procurement oversight. These changes are expected to come at a substantial cost, running into tens of billions of dollars above current spending plans.
Benefitting the Military-Industrial Complex
While Ukraine continues to be turned into a wasteland, the continuation of war is profitable to the companies that manufacture weapons for the US, the UK and even Poland, who have been active in this direction. Wars are never good for nations as there are no clear winners and losers. Both sides suffer in terms of economic losses, increased defence budgets, militarisation of society and polity, volatile civil-military relations and set back to democratic projects. However, as in past, the military-industrial complex (MIC) in different countries, including Russia and Ukraine, would reap huge commercial benefits, both during and in the ravaged aftermath of the war and emerge as decisive winners.
Russia’s domestic MIC has been the center-pillar of its great power status, claiming nine positions in the SIPRI list of top 100 arms-producing companies. However, Russia’s arms exports have declined in recent times. The ongoing war would divert more budgetary resources to Russia’s defence sector, generate internal demand and revive the fortunes of the domestic MIC, even if it comes at huge development cost
Similarly, Ukraine was a lead arms exporter during 2011-15 period, accounting for 2.6 per cent of global arms exports. This, however, came down sharply to 0.9 per cent during 2016-20 period.
Meanwhile, Russia’s self-sufficiency in its military-industrial complex, as noted by Russian UN Representative Vasily Nebenzya, poses a challenge to Western efforts to strengthen their armed forces amid surging demand for weaponry. Furthermore, disruptions in the supply chain for raw materials and components, exacerbated by sanctions, are impeding the ability of arms producers in both Russia and the West to meet the heightened demand generated by the Ukraine conflict, as highlighted by the SIPRI institute
Lobbying and Political Influence The military-industrial complex is known for its significant lobbying efforts and political influence. With increasing defense spending and contracts, the complex can allocate substantial resources to shape policies and decisions favorable to its interests. This includes influencing government decisions on defense budgets, arms exports, and international relations.
Economic Stimulus The defense industry is a substantial contributor to a nation’s economy. By creating jobs and supporting various supply chains, it can be seen as a source of economic stability and growth. This has led governments to support defense contractors as a means to stimulate economic activity, further solidifying the military-industrial complex’s position within a country.
Geopolitical Influence The military-industrial complex’s influence is not limited to domestic affairs. In the global arena, defense contractors often play a significant role in shaping international relationships and alliances. Arms sales and defense contracts can be used as leverage to strengthen diplomatic ties or exert influence on other nations, indirectly benefiting the complex.
Here are some specific examples of how the military-industrial complex is benefiting from the Russia-Ukraine conflict:
- The stock prices of major defense companies have surged since the start of the conflict. For example, the stock price of Lockheed Martin, the world’s largest defense contractor, has increased by more than 30% since February 2022.
- Defense companies are reporting record profits. For example, Lockheed Martin reported a profit of $6.7 billion in 2022, which is the highest profit in the company’s history.
- Defense companies are hiring new workers. For example, Lockheed Martin announced in March 2022 that it plans to hire 1,000 new workers to support its production of weapons and equipment for Ukraine.
While the Russia-Ukraine conflict is a tragic and devastating event with far-reaching humanitarian implications, it is essential to recognize its unintended consequences. The conflict has undoubtedly enhanced militarism and, in turn, benefited the military-industrial complex. Increased arms sales, defense budgets, technological advancements, lobbying efforts, economic stimulus, and geopolitical influence all contribute to the complex’s continued growth and influence. As we seek to address the ongoing conflict and its human toll, we must also remain vigilant in monitoring and regulating the military-industrial complex to ensure that it does not perpetuate or exacerbate global conflicts for its own gain.
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