U.S. Selling Record Number of Weapons to Third World

Arms sales to Third World countries rose to $19.4 billion, up from the 17.3 billion dollars spent in 1995, says the independent Congressional Research Service (CRS).

The United States was the biggest supplier by far in 1996. U.S. companies sold $7.3 billion in arms to poor countries -- or 37.6 percent of all weapons transferred to the developing world during the year, says CRS.

That was up from $4.1 billion in 1995 when Washington held less than 25 percent of the market.

It delivered $9.5 billion in arms to developing country clients -- nearly twice as much as Britain, its nearest competitor for the year -- and more than four times the value of deliveries made by France and Russia.

India signed about $2.5 billion in new arms contracts, making it the top weapons purchaser in the developing world for 1996. It was followed by Egypt, which ordered $2.4 billion in new arms, and Saudi Arabia which signed $1.9 billion in new contracts. That pushed Riyadh's total for arms agreements with major suppliers between 1989 and 1997 to $47 billion, confirming its place as the developing world's number one arms consumer by far. Its seven-year total was three times more than second-place Taiwan, and four times the third-place recipient, Egypt.

Washington received more than 70 percent of Saudi Arabia's orders during that period and virtually all of Egypt's, according to the report.

The 86-page study, which is based on classified as well as public information about arms transfers, notes that the increase in arms purchases by developing countries was mirrored by the world as a whole. Global sales agreements came to $31.8 billion in 1996, the first increase for any year since 1992, when sales worth $42 billion were signed.

The report pointed out that the 1996 total was still far below the Cold War years or the period immediately after the Gulf War when many Gulf countries embarked on crash rearmament programs.

During 1989-92, countries transferred some 188 billion dollars worth of arms worldwide, about 70 percent of which went to developing countries. During 1993-96, arms transfers totalled some $136 billion, of which the developing world accounted for 63.2 percent, according to the report.

The report argues that competition for arms sales, especially in the developing world, appears to be intensifying among major arms suppliers. The still-limited resources of the vast majority of poor countries, as well as the need for most selling countries for cash, are likely to restrain a major expansion in sales, the report says.

On the other hand, it predicts that western manufacturers are certain to compete hard for new sales opportunities made possible by the eastward expansion of NATO, as well as the interest of governments in the Near East, Asia, and Latin America in replacing older military equipment with more modern weapons. Indeed, U.S. aerospace companies recently scored a major victory in their effort to have a 19-year ban on sales of high-performance combat aircraft to Latin America lifted when the administration of President Bill Clinton decided to review such sales on a "case-by-case" basis.

The move, which was strongly opposed by disarmament experts who say it could result in an arms race regional governments can ill afford, will permit Lockheed Martin and McDonnell Douglas Corporation to compete for a Chilean contract for as much as $500 million for 24 jet aircraft.

Brazil is also expected to buy at least 70 new warplanes over the next year in a deal that could be worth two billion dollars. The report said that lifting the ban "may result in some important arms transfers to (Latin America)...in the future." Such sales would only increase Washington's already-dominant hold on the developing country arms market. In the period 1989-96, Washington ranked as the top arms supplier to developing nations with more than $80 billion in contracts -- a 40 percent market share.

Its nearest competitor, Russia and the former Soviet Union, claimed $44 billion in agreements over the same period, but fully half of that total came during the first two years. In 1996, Moscow was the second largest arms supplier with $3.9 billion in new contracts -- a substantial reduction, however, from the $5.5 billion it sold in 1995.

Russia, according to the report, has been making aggressive efforts to sell more weapons but is handicapped by a number of factors, according to the report, including doubts about its ability to provide spare parts and servicing for weapons. Iran, a major client, has ceased to buy much due to its economic problems, although China has recently made some significant purchases from Moscow.

The report predicts that Washington will remain the developing world's top supplier for the foreseeable future, with France, which was number one in 1994, Russia, and Britain routinely shifting their rankings among the top five.

The top ten developing country buyers, who accounted for more than 70 percent of the developing world market, were concentrated heavily in the Near East and Asia. The major buyer, Saudi Arabia, signed more than 20 billion dollars worth of contracts. It was followed by China (7.0 billion dollars), Kuwait (5.3 billion dollars), the United Arab Emirates (5.2 billion dollars), Egypt (4.9 billion dollars), and Israel (4.2 billion dollars).

The top ten in 1996 were India, Egypt, Saudi Arabia, South Korea, Indonesia, the U.A.E., Qatar, Peru, Israel and Pakistan in that order.