Quietly but steadily, Singapore carves out a share of arms market

Singapore, according to a senior official of the Association of Southeast Asian Nations, sells arms to ''Malaysia, Thailand, Indonesia, Guatemala - and both sides of the Iran-Iraq war.''

Claims like these are hard to confirm as Singapore's government defense concern, Chartered Industries, prefers not to trumpet its achievements to the press.

What is clear is that Singapore is rapidly developing a modern, energetic arms industry that will soon be seriously challenging other emerging arms producers such as South Korea.

This island nation currently builds its own patrol boats and services and rebuilds a variety of aircraft.

Chartered Industries now reportedly produces all the ammunition needs for Singapore's 42,000-strong armed forces, including 155mm artillery shells. If it can obtain the license from Israel, it will produce the 155mm gun itself.

Until the end of 1979 it produced its own M-16 rifles under license from the US-based Colt Industries Inc. Now, however, it has shifted to the Sterling assault rifle made in cooperation with the British Sterling Armament Corp. Some of the old M-16s are reported to have found their way late last year to the anti-Vietnamese Khmer leader, Son Sann.

Chartered Industries is making a determined pitch for overseas sales with its Ultimax 100 light machine gun, which will be marketed abroad by Sterling and Colt.

One of the gun's attractions will be its relative cheapness: The first batch of guns had a unit price of about $1,750, compared with closer to $3,000 for most competitors.

The island's defense industries have for years been making a variety of weapons under license: antiaircraft guns from Sweden, light tanks from France, grenade launchers from the US.

They have also branched out into more peaceful concerns, among them a car rental firm, a golf range, and the Singapore mint.

Some of the weaponry produced under license has probably been sold abroad in disregard of the license terms. While the Singaporeans do not seem to mind this, others do.

''Frankly,'' sniffed one dealer, ''they cheat a bit.''