In the post-Persian Gulf War arms market, the United States, according to data in an authoritative arms trade report, stands unrivaled as the top arms supplier to the world, including to developing nations. Dated August 18, the annual Congressional Research Service (CRS) report revealed that the 1999 total of $30.2 billion in global arms deals marked the second year of growth for weapons sales after a 1997 low. The United States announced more than $3.5 billion in new arms deals over the course of roughly two weeks in July.
Over an eight-year period starting in 1992, the world's nations signed more than $265 billion (all figures in constant U.S. dollars) in arms deals, according to the CRS report, Conventional Arms Transfers to Developing Nations, 1992-1999. The United States accounted for $114 billion of the agreements, far exceeding the $41.1 billion sold by France, the second leading arms seller. Russia, which no longer grants deep discounts on arms sales as it did during the Soviet period, ranked third with $33.6 billion in agreements for the entire period.
Richard Grimmett, author of the report, described the 1999 market as one of continuing "intense competition" among suppliers. Yet the United States accounted for more than one-third of new deals with $11.7 billion in sales, while the runner-up, Russia, totaled less than half of that amount with $4.8 billion in agreements. Moscow's total, bolstered by a sale of 40-60 advanced Su-30 multi-role fighter aircraft to China, marked the first rise in Russia's arms sales since a steady decline from an $8.2 billion high in 1995.
While worldwide arms agreements rose between 1998 and 1999, weapons deliveries declined by $2.4 billion to roughly $34 billion. However, U.S. arms deliveries, which include Pentagon and commercial deliveries, increased by more than $1 billion to total $18.3 billion, equaling more than half of all arms shipments in 1999. The high U.S. total reflected the continued implementation of arms deals concluded in the wake of the Persian Gulf War, which not only awakened Near Eastern countries to potential threats but also served as a showcase for U.S. weaponry.
Buyers in the developing world—identified by Grimmett as all countries except the United States, Russia, European countries, Canada, Japan, Australia, and New Zealand—signed deals for $20.5 billion in 1999, accounting for more than two-thirds of the global total. For the second consecutive year, Washington concluded the largest share of these deals with a $8 billion total. Though major sales to key U.S. arms clients in the Near East helped push up the U.S. sum, Grimmett noted that sales of spare parts, upgrades to existing weapons, munitions, and support services made up a "very significant part."
Russia ranked second in deals with developing nations, totaling $4.1 billion in agreements. With Iran experiencing economic difficulties and Iraq under a UN arms embargo, Russia is actively marketing its weapons in search of hard currency, though some potential arms buyers, according to Grimmett, question whether Russia can serve as a reliable supplier of spare parts and support services. China and India remain Russia's "principal clients."
Weapons deliveries to the developing world in 1999 amounted to $22.6 billion. For the eighth straight year, the United States led all suppliers, accounting for half of the transfer total. U.S. allies Britain and France tallied $3.9 billion and $2.2 billion, respectively, to rank second and third.
Among developing nation recipients, South Africa, which recently launched a military modernization program, signed the most deals in 1999, totaling $3.3 billion. Egypt, a major buyer of U.S. arms since its 1979 peace treaty with Israel, ranked second in new deals with a sum of $2.6 billion, while Israel followed closely behind with agreements worth $2.3 billion. Leading the entire eight-year period, Saudi Arabia, which has imported some $66 billion in weapons since the Persian Gulf War, signed contracts valued at $28.9 billion.
Looking to the future, Grimmett projected that major arms purchases will likely be made by "more affluent developing countries," such as the United Arab Emirates, while remaining sales will be based on supporting or upgrading previously sold weapons. Limited resources on the part of developing nations and the need for cash by many weapons sellers "places constraints on significant expansion of the arms trade," Grimmett wrote.
Over $3.5 Billion in About Two WeeksBetween July 12 and 24, the Pentagon reported to Congress $2.8 billion in potential new U.S. arms sales with 14 countries, raising the total for Pentagon-negotiated arms deals in 2000 to at least $5 billion. Lockheed Martin, maker of the F-16 fighter aircraft, also announced in July the sale of 20 F-16 fighter aircraft apiece to both Singapore and South Korea, while Thailand, which dropped a buy of F/A-18 fighters in 1998 for economic reasons, agreed in July to purchase 16 F-16 aircraft. The company did not release a value for the Singapore deal, but the South Korea sale totaled $700 million and Thailand's purchase will cost $133 million.
U.S. arms customers can purchase weapons either through direct commercial sales with U.S. companies or through the Pentagon's Foreign Military Sales (FMS) program. The U.S. government, in recent years, has typically authorized some $20 billion every year in commercial contracts, which are good for four years, though not all result in completed deals.
Under the 1976 Arms Export Control Act, Congress must be notified of all arms deals, both commercial and FMS, that equal or exceed $14 million. If it passes a joint resolution of disapproval within 30 days (15 in the case of NATO members, Japan, Australia, and New Zealand), Congress can block the sale. Congress has never voided a sale after being formally notified.
Agreements with three countries in the Near East—Egypt, Kuwait, and Saudi Arabia—accounted for more than half of the July deals recently reported by the Pentagon. Egypt led with $882 million in possible deals, while Saudi Arabia ranked second with a proposed buy of 500 AIM-120C advanced medium range air-to-air missiles valued at $475 million. Both buyers' potential purchases are geared toward upgrading or arming weapons previously supplied by the United States.