The business of war

La Moncloa consolidates Spain as the world's seventh largest arms exporter

Sales have increased threefold in the last decade thanks to the impulse of governments

4 min
The state-owned shipping company Navantia is one of Spain's leading defense companies.

BarcelonaThere is one sector of the Spanish economy that does not suffer so much from the crisis: the military industry. For a decade now, Spain has been one of the top 10 countries that export the most arms in the world, a place far above its economic capacity or its global political weight. According to the latest report of the Stockholm International Peace and Research Institute (SIPRI), published two weeks ago, it ranks seventh in the world ranking of arms exporters in the period 2016-2020, only behind the great military powers of the planet: the United States, Russia, France, Germany, China and the United Kingdom. In 2018 it ranked fifth. In recent years, 3.2% of all weapons sold in the world were manufactured in Spain, with the corresponding authorizations to market them from the government in Madrid. Arms exports made in Spain have soared by 295.4% between 2010 and 2019. A whole business that grows in opacity, protected by the Law of State Secrets.

From Narcís Serra to Pedro Morenés

How has the Spanish military industry been able to position itself in recent years in such a preponderant place in the world market? The answer, like so many other things, has to be sought in the Transition period. "The first Socialist government, with Narcís Serra as Minister of Defence, considered that one way of democratising the Spanish army was to place it close to its European counterparts, and this could be done by involving it in research and production contracts. And the economy could also benefit from this", Tica Font, a researcher at the Delàs Centre for Peace Studies, explains to ARA.

The machinery was set in motion then, but it picked up cruising speed after the economic crash of 2008-2009, when Pedro Morenés (who had been a director of Construcciones Navales del Norte and the pan-European missile company MBDA or Instalaza, the Zaragoza firm that manufactured cluster bombs, now banned) became Minister of Defence in the first government of Mariano Rajoy. "The military industry had been involved in very expensive projects encouraged by the government, and with the crisis they found that they could not maintain public aid and credits. So the government opted to "compensate" arms manufacturers by helping them to export to other countries", adds Jordi Armadans of Fundipau. The Spanish monarchy's dangerous friendships with its Gulf counterparts, and in particular Saudi Arabia - which for some years has been engaged in an arms race to position itself as a major regional player in the Middle East - have done the rest.

Arms factory in La Coruña

The Secretary of State for Trade, which is responsible for export control, justifies Spain's position as an arms exporter by arguing that "around 80 per cent of the value of exports corresponds to aircraft that are assembled or modified in Spain and in which other EU members and third countries participate in the framework of cooperation programmes". As for the financial support that the administration gives to the sector, it limits itself to pointing out that "defence and security material exports are included in the scope of action of traditional instruments such as the Fund for the Internationalisation of Spanish Companies". The sector employs 21,000 people and has an annual turnover of 6.2 billion euros, 0.5% of GDP, according to the government.

A large portfolio of buyers

And who buys Spanish arms? According to the latest official statistics, which correspond to the first half of 2020, 71% of defence exports were destined for NATO countries (including Turkey), which in many cases correspond to joint military projects of the EU, which is trying to harmonise the 27 armies of the member states so that they can act jointly. The rest were sold to Saudi Arabia, Kazakhstan, the United Arab Emirates, Singapore and Oman. The government, which has to authorise all exports, halted the sale of missile control and launching systems for frigates in Burma, applying European agreements. Police and security equipment was also exported to Togo, Tunisia, Portugal, the United States and France, and what is known as dual-use equipment (which can have a civilian but also a military use, such as sensors and software), again to Saudi Arabia, the United States and China. In the last decade, exports have accelerated to Asia and the Middle East, two areas of the planet that are experiencing a veritable arms race.

One of the keys to the success of the Spanish military industry is diversification, which allows it to offer itself to many countries: from EU partners with high technological capacity (Brussels plans in its budget for the coming years to subsidise joint arms purchases to facilitate the homogenisation of armies) to other countries with a low level of development. They manufacture everything from aircraft to ammunition, simulators and software.

The most substantial contracts are those of the Airbus aircraft manufactured in Madrid and the frigates of Cadiz, which in recent years have been marked by controversy over the large contracts signed with Saudi Arabia which, unlike European partners such as Italy, Germany and France, the Spanish government has decided to maintain despite the scandal of the murder of journalist Jamal Kashoggi or the evidence of war crimes committed by the Saudi army in Yemen. Between 2010 and 2019 Spain sold defence material in Saudi Arabia worth 3,736 million euros. Exports that, according to what NGOs have denounced in the Control Arms campaign, violate the legislation - the international treaty of 2014, the European common position of 2008 and the Spanish law of 2007, a legislative framework product of pressure from peace movements - which emphasizes that arms cannot be exported to countries where there are indications that they will be used to violate human rights. In their reports they have warned that between 15% and 25% of Spanish arms exports are questionable from this point of view.

Hunting shotguns and ammunition

However, there are also less important contracts in economic terms that are worrying. One example is Ghana, which has imported Spanish-made ammunition and hunting weapons worth 38.2 million euros over the past decade. "Even if the entire population of Ghana spent all day hunting, they wouldn't be able to spend that much on guns and ammunition. It seems quite clear that what they do is re-export them to other countries, and this is not being controlled", warns Font.