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Right after I graduated, I interned with the Arms Control Association. It was terrific.

– George Stephanopolous
Host of ABC's This Week
January 1, 2005
U.S. Increases Worldwide Share Of Arms Deliveries, Agreements in 1996
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Wade Boese

THE UNITED STATES dominated the conventional arms market in 1996, according to a Congressional Research Service (CRS) Report released August 13. Data measured by CRS national defense specialist Richard F. Grimmett in Conventional Arms Transfers to Developing Nations, 1989 1996, show the United States expanded its worldwide share of both arms transfer agreements and deliveries, outpacing the combined exports of the next largest suppliers: Britain and Russia.

In 1996, the total value of all agreements reached $31.8 billion (all figures in current dollars), the first increase since 1992, while the value of all deliveries increased slightly to $30.1 billion, far below the 1989 total of 45.4 billion (the peak year of the period covered by the report). Nearly three quarters (73.9 percent) of all deliveries went to developing countries in 1996, with Saudi Arabia, the largest recipient, importing arms worth $6.3 billion. Developing countries accounted for 61 percent of all agreements led by India ($2.5 billion) and Egypt ($2.4 billion).

Worldwide U.S. agreements were valued at $11.3 billion (35.5 percent the total), an increase of $2.1 billion from 1995, but only half the 1993 total of $22.4 billion. The value of U.S. agreements with developing countries rose to $7.3 billion, representing 37.5 percent of the market, up from 23.7 percent in 1995. Because the United States is the only major arms supplier that maintains two distinct export systems (government to government and commercial sales), the report includes only U.S. government to government sales, which comprise the "overwhelming portion" of all U.S. transfers, according to Grimmett.

While the value of Britain's agreements in 1996 rose from the 1995 level of $1 billion to $4.8 billion, Russian agreements plummeted from $8.2 billion to $4.6 billion. Russia, the 1995 leader in developing world agreements, saw a 12 percent decrease in agreements and only delivered $2.2 billion worth of arms to developing states, while U.S. deliveries totaled $9.5 billion.

Russia's declining share in the arms market in 1996 reflected the fact that Russia's clients have less purchasing power than the West's wealthy clients in the Middle East. Buyers are also unsure whether Moscow can supply the necessary spare parts and services to maintain equipment. Russian sales in 1996 were bolstered by an Indian purchase of 40 Su 30 fighters and a deepening relationship with China, which recently finalized a deal to co produce some 200 Su 27 aircraft with Russia. But Grimmett said Russia's real problem may surface in the long term, when Russia's failure to invest in advanced research and development could place Moscow at a competitive disadvantage.

Despite the modest increase in the arms market from 1995 to 1996, Grimmett feels that the market has reached a point of stability following the post Gulf War surge and that major purchases, such as fighter aircraft, will subside as suppliers increasingly focus on retaining traditional clients and maintaining and upgrading previously supplied equipment.