By Jim Lobe
WASHINGTON, Aug 6 1999 (IPS)

Sales of new weapons to developing nations last year fell to their lowest level since 1991 as some of the world’s largest arms markets in the Middle East and Southeast Asia suffered cash shortfalls, according to a new government report.

The United States captured more than one third of those sales – worth about 4.6 billion dollars – confirming its status as the decade’s leading supplier of arms to developing countries, said the report released by the Congressional Research Service (CRS).

Titled ‘Conventional Arms Transfers to Developing Nations’ the report revealed that, between 1991 and 1998, the United States made arms-sales agreements with poor nations worth 43 billion dollars.

The next biggest arms supplier was France, with agreements worth 34 billion dollars, then Russia – with 28 billion dollars. Russia’s share of the market, however, declined significantly over the last eight years, from about eight billion dollars in 1991 to just 1.4 billion dollars last year, the report said.

That trend is likely to continue given Moscow’s pressing cash needs, according to the report’s author, Richard Grimmett.

Apart from China and, to a lesser extent India, most potential buyers who could afford to pay cash were long-standing customers of the United States or major West European exporters and were unlikely to switch to unfamiliar systems, the report said.

Among buyers, Saudi Arabia retained its position as the developing world’s dominant arms consumer, with 2.7 billion dollars in new deals in 1998. It was followed by the United Arab Emirates (UAE) with 2.5 billion dollars and Malaysia, with 2.1 billion dollars.

But Saudi purchases also declined sharply from the 1991-94 period, when Riyadh bought more than 20 percent of all arms sold to the developing world. In the last three years, that percentage fell to 12 percent, according to the report, which noted that last year the Saudis “even had problems meeting monthly payments to the United States for existing weapons contracts.”

The report, considered one of the world’s most authoritative estimates of major arms transfers in the developing world, analysed new arms contracts reached during the previous year and actual arms deliveries.

It found that in 1998, the total value of all new arms agreements, including those among developed nations) came to nearly 23 billion dollars – more than in 1997 but substantially less than most years since the 1991 Gulf War.

Of that total, the United States racked up 7.1 billion dollars in contracts, followed by Germany (5.5 billion dollars) and France (three billion dollars). Together, these three countries accounted for more than two-thirds of all arms sales made by suppliers in 1998.

As it had for the previous seven years, the United States was ranked first in the value of all international arms deliveries for 1998 (29.8 billion dollars) – with 10.5 billion dollars, or 35.3 percent of all deliveries. It was followed by France (6.5 billion dollars), and Britain (5.3 billion dollars).

Developing countries accounted for 13.2 billion dollars in new arms agreements in 1998, or 57.3 percent of all arms transfers worldwide. That percentage was substantially below the levels of previous years, confirming a longer-term trend, the report said.

In the 1991-94 period, developing nations accounted for about 72 percent of all arms sales; that fell to 66.4 percent in the period 1995-98.

Of the almost 30 billion dollars in arms delivered worldwide in 1998, 23.2 billion dollars went to developing countries. While that was a substantial decrease in deliveries from 1997 (30.3 billion dollars), it marked an increase in the developing- country’s share of the global arms market – to 77.8 percent.

Saudi Arabia imported 8.7 billion dollars, or almost 40 percent of all developing country arms imports, in 1998. Taiwan ranked second with five billion dollars (or 21.5 percent), followed by Singapore (1.6 billion dollars); South Korea (1.4 billion dollars); Israel (1.3 billion dollars); Pakistan (1.2 billion dollars); and the UAE (1.1 billion dollars).

The ten top recipients, six of which were in the Near East region, accounted for 99.1 percent of the value of all arms deliveries to developing nations in 1998.

For the entire 1991-98 period, Saudi Arabia took delivery on 68 billion dollars of weapons, or more than three times the next biggest importer, Taiwan, which imported 20 billion dollars worth of arms.

Then followed Egypt (9.9 billion dollars); Kuwait (9.1 billion dollars); Iran (7.7 billion dollars); South Korea (7.0 billion dollars); the UAE (6.8 billion dollars); and China (5.7 billion dollars).

Iran, ranked number two behind Saudi Arabia in the 1991-94 period, fell to number 9 during the past three years, the report said.

Prospects for future arms sales are limited in much of the developing world, according to Grimmett, given the strains on their budgets and the need of many selling nations to gain cash for their weapons.

“It is possible that some significant arms sales may develop in the Near East, Asia and Latin America, as individual countries attempt to replace older military equipment,” the report said.

“However, much of the developing world has not recovered from recent major international financial problems,” including the 1997-98 plunge in the price of crude oil, the Asian financial crisis, and domestic budget constraints in Latin America.

Among suppliers, according to the report, “the United States is best positioned to lead in new arms agreements with developing nations,” although the very large weapons orders from individual countries, such as those which boosted arms sales in the Gulf in the early 1990’s, were likely to continue to decline.

Still, one independent arms monitor predicted that 1999 could be a banner year for US arms sales, given two major pending F-16 fighter jet sales valued at 10.5 billion dollars to the UAE and Israel.

“Last year’s sales were basically for spare parts,” said Tom Cardamone of the Council for a Livable World Education Fund.

The four major West European suppliers – France, Britain, Germany, and Italy – offered strong competition, he said. As a group, they held a 34.5 percent share of all new agreements with developing countries during 1991-98, and 35.7 percent in 1998.

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