RUSSIA NOW TOP ARMS SELLER TO DEVELOPING WORLD

by Jim Lobe

(IPS) WASHINGTON -- For the first time in the last eight years, Russia surpassed the United States in the value of new arms agreements with developing countries in 2005.

Russia's arms sales totaled $7 billion, or about one quarter of a $30 billion market last year, according to a new report by the Congressional Research Service (CRS).

The United States, which has dominated the arms market for the past decade, retained its lead in the value of actual arms deliveries last year, according to the report, the latest in an annual series. It delivered $8.1 billion worth of arms to developing countries, or nearly half of all deliveries of conventional weapons to developing countries made in 2005. It marked the eighth year in a row that the U.S. ranked first in arms deliveries.

Most of those deliveries were made to U.S. allies in the Near East, principally Saudi Arabia, Israel, Egypt, and several of the smaller Gulf states. From 2002-05, the region accounted for more than half of all arms deliveries to the world's developing countries.

But Asia last year eclipsed the Near East in the value of new arms agreements. From 2002-05, Asian countries accounted for some $43.6 billion in new arms purchases, or 48.4 percent of the total value of all new arms agreements contracted by suppliers with all developing nations.

With $5.4 billion in new contracts, India ranked first among all developing world recipients in the value of arms transfer agreements last year, followed by Saudi Arabia ($3.4 billion), and China ($2.8 billion).

Indeed, India has been the leading developing world arms purchaser since 1998, making agreements totaling $20.7 billion -- or nearly 12 percent of all arms purchases by developing countries during the eight-year period. Despite its rapidly improving military ties with the United States, India's main supplier has been Russia.

The report, "Conventional Arms Transfers to Developing Nations," is produced each year by CRS expert Richard Grimmett. It is widely considered to be one of the most authoritative sources on the conventional arms trade because it is based on classified information as well as public data, and its methodology has remained constant for some two decades. Its statistics include military sales and aid.

While it reports on new arms sales and deliveries that took place during the year preceding its publication, it highlights longer-term trends. Thus, this year's report focuses on 1998-2005.

The value of all arms transfer agreements worldwide -- to both developed and developing nations -- reached $44 billion last year, the highest total in the past eight years, according to the report. The U.S. led with $12.8 billion, or nearly 30 percent of the value of all such agreements, but roughly half that total represented new sales to other developed countries.

Developing countries contracted to buy nearly $30.2 billion in conventional arms in 2005 -- also an eight-year record and about 68.5 percent of the value of all arms transfers during the year. Developing countries have made up about two-thirds of the global arms market for well over a decade.

Only $17.7 billion worth of arms was actually delivered to developing countries during 2005, an eight-year low, according to the report. Russia ranked second behind the U.S. with $2.7 billion in deliveries, followed by Britain ($2.4 billion), France ($1.3 billion), China ($800 million), and Israel ($400 million).

While the U.S. and Russia have dominated the arms market in the developing world over the past four years -- together accounting for more than half of all new contracts -- 2005 was the first in which Moscow surpassed Washington. It signed $7 billion in arms contracts with developing countries, a sharp increase from $5.4 billion in 2004, while U.S. contracts plunged from $9.4 billion in 2004 to about $6.2 billion last year, even below the $6.4 billion in contracts snagged by France.

From 2002-2005, the United States made a total of $33 billion in arms transfer agreements with developing countries, or 35.2 percent of all such contracts, while Russia made $21.8 billion, or 24.3 percent. France, the third-leading supplier, made $8.7 billion, or 9.3 percent.

In regional terms, the U.S. has dominated the Near Eastern market, accounting for 50.2 percent of all arms agreements with the region during the same four-year period -- down from 65 percent in 1998-2001. West European countries and Russia appear to have been the main beneficiaries of the U.S. drop. They claimed 25 percent and 12.2 percent of the market, respectively, in the latest period.

The shares of the growing Asia market, by contrast, remained relatively stable in the eight-year period. While the U.S. claimed about one quarter of that market, Russia -- with strong clients in India and China -- was the predominant player at about 37.5 percent, while Europe's share came to nearly 20 percent. China, which is both an arms exporter and an importer, claimed about 6 percent over the eight-year period.

Latin America more than doubled its arms purchases, from $3.6 billion in the 1998-2001 period to $7.4 billion in the 2002-2005 period. About 60 percent of the weaponry came from European sources, while the United States supplied a slightly less than a third, and Russia, about 8 percent.

At the same time, the value of agreements with African countries fell from nearly $10 billion in the first four-year period to $4 billion in the more recent period. France, Russia, China, and non-major European producers were the biggest suppliers, while Washington provided only about 4 percent of the total regional market.

The top 10 recipients of arms agreements over the eight-year period accounted for some 70 percent of all arms sales to developing countries. India led the list with $20.7 billion worth of purchases, followed by the United Arab Emirates ($17.6 billion), China ($16.7 billion), Saudi Arabia ($16.4 billion), and Egypt ($13.6 billion).

The remaining five were led by Israel ($9.5 billion), Taiwan ($8.9 billion), South Korea ($6.9 billion), South Africa ($6.1 billion), and Pakistan ($5.9 billion).