Many corporations were born out of the wars and today a strong relationship between military expansion and companies remains. While globally, military expenditure accounts for 3% of Gross National Product (GNP) compared with social development expenditure of 10% for health and education. In some countries, military expenditure even exceeds social spending. There is particular concern about the sale of arms to oppressive or aggressive regimes, or into areas of potential instability.
There is also particular concern about certain types of weapons: landmines and nuclear/ chemical/biological weapons. Such weapons cause substantial civilian casualties, can linger for many years, and risk escalation and uncontrollable damage. For many groups, companies involved in the manufacture of these types of weapons are particularly unacceptable.
Contemporary war economies are characterized in part by the sometimes legal but more often illicit or informal exploitation of abundant valuable natural resources, including but not limited to oil, diamonds, timber, and columbite-tantalite ore (Coltan). Coltan is used in the fabrication of mobile telephones, laptop computers and other high-tech products. Proceeds from these ‘conflict commodities’ have provided significant financing for the parties involved in wars, and are pointed to as one of the contributing factors in the continuation or risk of renewed outbreak of these conflicts
Natural resource endowment alone does not necessarily mean that a country is at risk of civil war. However, when combined with other factors such as poor governance, extreme income inequalities, economic and social exclusion, declining growth rates, ethnic tensions, etc., they are more likely to become a source of tension as competing groups attempt to control access to them. A World Bank study has revealed that the risk of civil war is four times higher for natural resource-dependent states than for countries having no primary resource commodities. Also while resources can prove a boon for economic expansion, in developing countries they have more often been with little or no positive effects on the local economy. For example, it is worth noting that twelve of the world’s 25 most mineral-dependent states and six of the world’s most oil-dependent states are classified by the World Bank as highly indebted poor countries with amongst the world’s worst Human Development Indicators.
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Several explanations have been offered for the emergence of new tensions and wars. The most common is that with the abrupt retraction of superpower patronage in the early 1990s, governments and guerrilla groups alike were left to their own devices to finance their military campaigns in what had become extensions of the proxy wars that characterized the Cold War.
Warfare and conflict divert resources away from development. The two World Wars have shown us that war destroys the whole economies of nations. Large armies and armaments industries increase the risk of conflict, and the temptation to use such forces, either directly or as a threat, for example by terrorists results in diversion of expenditure from social spending into unproductive military and arms trade. This is of grave concern to the progress of sustainable development.