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TRADE: Russia Now Biggest Arms Seller to Developing World

Jim Lobe

WASHINGTON, Oct 30 2006 (IPS) - 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, with seven billion dollars in sales, or about one quarter of a 30-billion-dollar 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 dollars 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. During the period 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, as it has for several years now. In the period 2002-05, Asian countries accounted for some 43.6 billion dollars 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 dollars 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 dollars), and China (2.8 billion dollars).

Indeed, India has been the leading developing world arms purchaser since 1998, making agreements totaling 20.7 billion dollars – 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 and 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 the period 1998-2005.

The value of all arms transfer agreements worldwide – to both developed and developing nations – reached some 44 billion dollars last year, the highest total in the past eight years, according to the report. Of these, the U.S. led with 12.8 billion dollars, 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 dollars 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 dollars 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 dollars in deliveries, followed by Britain (2.4 billion dollars), France (1.3 billion dollars), China (800 million dollars), and Israel (400 million dollars).

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 seven billion dollars in arms contracts with developing countries, a sharp increase from 5.4 billion dollars in 2004, while U.S. contracts plunged from 9.4 billion dollars in 2004 to about 6.2 billion dollars last year, even below the 6.4 billion dollars in contracts snagged by France.

>From 2002-2005, the United States made a total of 33 billion dollars in arms transfer agreements with developing countries, or 35.2 percent of all such contracts, while Russia made 21.8 billion dollars, or 24.3 percent. France, the third-leading supplier, made 8.7 billion dollars, 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 the 1998-2001 period. 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 six percent over the eight-year period.

Latin America more than doubled its arms purchases, from 3.6 billion dollars in the 1998-2001 period to 7.4 billion dollars 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 eight percent.

At the same time, the value of agreements with African countries fell from nearly 10 billion dollars in the first four-year period to four billion dollars in the more recent period. France, Russia, China, and non-major European producers were the biggest suppliers, while Washington provided only about four 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 dollars worth of purchases, followed by the United Arab Emirates (17.6 billion dollars), China (16.7 billion dollars), Saudi Arabia (16.4 billion dollars), and Egypt (13.6 billon dollars).

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