Politics Stack Exchange is a question and answer site for people interested in governments, policies, and political processes. It only takes a minute to sign up.
Sign up to join this community
I read this internet article recently, which argued that weapon manufacturers are benefiting from war between Russia and Ukraine. Did this article get it right? Do weapon manufacturers benefit from wars? Who else might benefit, if any?
This question is more general than: In what ways will the Russian-Ukraine war benefit/harm the United States?
A few beneficiaries that come to mind:
Wars are fought for a reason. If Russia can somehow win this war, then they (mainly the governing elite including but not limited to Vladimir Putin) will benefit. If Ukraine on the other hand can successfully defend their country, then they also benefit greatly although at a very high price to pay (hundreds of billions of dollars destroyed property, tens of thousands of lost lives).
As for weapon producers, yes military spending will increase in the future because of the increased risk, so weapon producers will produce more weapons and make more profit. For example, just this week Germany confirmed a one time investment in their army of 100 billion € over the next 10 years with a big chunk expected to go into new military airplanes.
Resource producers also benefited from increased prices although Russia not as much with a price cap on Russian oil set by the G7.
On the other hand there is a quite long list of losers of this War, so not sure it's so interesting to ask for beneficiaries alone. In general, you can count yourself lucky if you do not lose too much in war.
Many countries which do not participate in the EU/US sanctions will most likely benefit from an increased trading with Russia. Russia will try to replace goods imported from the sanctioning countries as well as will seek for new export markets. This is usually beneficial for both sides. For example, China, India and Pakistan are already interested in increasing the trading with Russia in the near future. I also heard that Tadjikistan and Kyrgizistan may win a lot by "relabelling" various Russian products and trying to export those to EU or in the other direction by selling sanctioned stuff to Russia; they already did this with the sanctions made back in 2014.
One party that benefits, short term, is Putin and his security state.
Putin’s favorability ratings jumped from 69 percent in January to 83 percent in late March,
Dissidents can now be sent to jail for 15 years if they criticize the war.
Expect more doctoring of the election processes.
Russian balance of trade: highly spiked oil profits (so far), lessened imports.
Longer term, this endeavour is risky for Putin and his regime. Neither a frozen conflict with ongoing low level Russian losses in the occupied areas, a la Afghanistan, nor a settlement restituting the status quo of February 2022 will make them look good. Strangely enough, Putin seems to be getting challenged from the pro-war side, rather than anti-war.
Domestic dissent within Russian military circles, claiming that the Kremlin is not doing enough to win the war, continues to grow. Former Russian Federal Security Service (FSB) officer Igor Girkin (also known as Strelkov) condemned Russian Foreign Minister Sergey Lavrov’s statements about the priority of the “special operation” in Ukraine being the liberation of the Donbas.2 Girkin claimed that the Kremlin has forgone the ideological underpinnings of the conflict by focusing the conflict on the Donbas, rather than the entirety of Ukraine.
Girkin’s dissent is emblematic of continued shifts within circles of Russian military enthusiasts and ex-servicemen. As ISW has previously reported, the Kremlin has repeatedly revised its objectives for the war in Ukraine downwards due to battlefield failures. The Kremlin is increasingly facing discontent not from Russians opposed to the war as a whole, but military and nationalist figures angry at Russian losses and frustrated with shifting Kremlin framing of the war. Russian officials are increasingly unable to employ the same ideological justifications for the invasion in the face of clear setbacks, and a lack of concrete military gains within Ukraine will continue to foment domestic dissatisfaction with the war.
Russia's gas is going to have less European buyers - keeping in mind that fossil fuels are getting phased out, this might be foregoing future sales. Sanctions are impacting the Russia supply chain. Look at what goes into an Orlan drone (I realize that video is Ukrainian propaganda, but does that mean it is untrue?).
Western arms companies are seeing their shares climb: their gear seems more useful than usual and is being used up. Unlike the OP, I don't see this as nefarious, though I am very cynical the military industrial complex's impact on budgeting most of the time.
Energy companies. Perhaps counter-intuitively, energy company profits go up when oil price is up.
Alternative energy industrials in Europe. This has intensified the drive to uncouple Europe from Russian oil and gas, which will drive investment in renewables in Europe (and also LNG terminals, as a question asked here inquired about). So public money is being thrown at the problem, which will certainly benefit some.
NATO. See @convert's answer for details.
One could assume that countries that do not participate in sanctions are getting discount on Russian imports. But they will often find that the increased cost of other inputs (fertilizers, food, oil) more than offsets the benefits. India for example is getting some cheap oil, but can't import all that much of it due to logistical bottlenecks (Russian exports are highly pipeline-bound).
Russian ship loadings headed for the subcontinent are expected to have risen to 230,000 bpd in March, up from nothing in the previous three months (this excludes cpc, a blend of mainly Kazakh and Russian crude). Yet India is unlikely to buy much, at least in the short term. Nearly half its imports come from the Middle East, and shipping from the Gulf is much cheaper than shipping from Russia. Payment cannot be settled in dollars, requiring India to experiment with a rouble-rupee mechanism.
And if you get a 30% discount on a product that is now 50% more expensive than 6 months ago, how much are you ahead, compared to 6 months ago?
Likewise, food producers and farmers are also uncertain winners. Sure, their output go up in price, but so do their inputs in fertilizers and fuel. And if people are stretched on their food budget, they will cut back on more expensive foods with higher margins so a food conglomerate may not see all that much upside.
It is not wrong to look at public policy decisions and try to untangle who gains and who loses to determine what kind of influence parties brought to bear to achieve their preferred outcome. For example, one might cynically look at ethanol fuel regulations in the US and see little benefit for the environment and lots for corn farmers. Then you can cross-check how climate-skeptics senators from the Midwest vote on ethanol regulations.
This is what the article linked to in the OP's question explicitly does:
The war-promoting hydras are not going to go away any time soon, and they play a far greater role in the Ukraine crisis than is being widely acknowledged. Any understanding of the crisis simply must factor in that as well as everything else, it is a matter of business: the business of war.
This is not a new concern, Eisenhower was already stating the risks back in 1959:
In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.1
However, this war is different. Regardless of who benefits, and it would be foolish to argue that Western arms manufacturers aren't benefiting, this war was not started by some conspiracy cabal of cigar-chomping arms and oil barons. As far as anyone understands what started it, the choice of going to war seems to have been largely based on the will of one person: Putin himself. With a distant and very debatable runner-up of perhaps NATO having mishandled its expansion intents back in 2007.
Russia's war against Ukraine is contributing to a global economic crisis. The outcome of such a crisis, and the ultimate beneficiaries, are hard to predict with any clarity.
So my not-too-clear answer is that only hindsight can tell. People who happily garner profits on arms contracts or commodity futures in the immediate future could suffer in a depression which comes in the long term. Not least, it will depend on who seems to have won -- will the West be reinvigorated and Russia diminshed, or the other way around?
Many beneficiaries were already mentioned in other answers, so I´ll not repeat them. I am wondering why NATO wasn´t mentioned in this context. No meter who winns at the end, NATO is profiting the most:
Finland and Sveden gave up their neutrality and going to join NATO
Most countries (when not even all) will now folow the 2% goal.
The aliance is united against the common enemy as strong as during Cold War, posibly even stronger.
EU also benefiting in a similar way.
Weapon manufacturers from all the NATO countries are benefiting from this war in Ukraine. US and other NATO countries are either buying weapons from weapon companies or taking out weapons from their military warehouses, to send them over to Ukraine. When clearing out their weapons warehouse, the countries will buy the newer advanced versions from the weapons companies. Either way, weapons companies profit from war.
Note that the west is not supplying medical resources to Ukraine, nor training medical troops in Ukraine. Every foreigner who goes to Ukraine to for 'humanitarian' causes, ends up with a gun/RPG, to fight on the front lines. This means the west is not concerned with saving lives, only profiting from this war.
