US, Saudis Top Seller And Buyer of Arms

FOR the first time since 1983, the United States last year passed the Soviet Union to become the top seller of arms to the third world, according to an authoritative new congressional report.Sales generated by the Gulf crisis accounted for a large part of the US surge. American weapons deals with Saudi Arabia alone in 1990 were valued at $14.5 billion - almost 80 percent of the US total of $18.5 billion in arms sales for the year. The US-Saudi arms agreements were so big they "exceeded the total value ($12.1 billion) of all arms transfer agreements made by the Soviet Union with the entire third world," said the report by Congressional Research Service defense specialist Richard Grimmett. Arms agreements between all suppliers and third-world nations totaled $41.3 billion in 1990, according to the report. That's up from $34 billion in 1989. Before the Gulf crisis hit, the world arms market had in fact been turning soft. For three years beginning in 1988, weapons sales to less-developed nations went down every year. One reason the market had been declining was the winding down of the Iran-Iraq war, a conflict in which both sides had spent freely. Another was the fast pace of purchases in the early '80s. Many other buyers were still absorbing new fleets of planes and tanks, and were spending only on parts and support services. Then Saddam Hussein invaded Kuwait. Without this stimulus it is likely 1990 arms sales "would have either remained at roughly 1989 levels or continued their decline," concluded the study.

More competition foreseen Not all US sales to Saudi Arabia took place after the Aug. 2 invasion, however. Some $6.1 billion were planned beforehand, including light armored vehicles and antitank missiles, M1 tanks, and upgrades for Saudi E-3 AWACS radar aircraft. With developed nations spending less and less on defense, the competition for third-world weapons contracts is only going to get fiercer in years ahead, wrote Mr. Grimmett. The arms bazaar today has three levels of suppliers. At the top level are the US and the Soviet Union, whose breadth of product lines and customer contacts surpass everyone else's by far. Since 1983 the two superpowers have between them accounted for more than 60 percent of third-world arms deals. Next are European nations such as France and the United Kingdom, whose defense industries are often heavily export-dependent, and China, which emerged as an important arms supplier in the '80s, largely because of big sales to both Iraq and Iran. In fact, China was the No. 3 arms seller for 1990, with $2.6 billion in agreements.

Missile sales worrisome In recent years the US has worried about China's penchant for selling missiles throughout the third world. Chinese CSS-2 intermediate-range ballistic missiles have been sent to Saudi Arabia and Silkworm antiship missiles to Iran, among others, notes the CRS study. The third level of weapons dealers consists of nations with smaller industries and more sporadic sales, such as North Korea. While their technology is relatively simple, some of these nations are more willing to sell arms on exclusively commercial considerations than are the larger weapons suppliers. The two major third-world buyers of arms in recent years, by far, are Saudi Arabia and Iraq. Between them they have accounted for almost 30 percent of all arms purchases since 1983, according to CRS figures. Last year, Saudi Arabia stayed No. 1, with its total of $19 billion in 1990 arms purchases. Iraq, hit by the UN arms embargo, slipped down the list to fifth. The No. 2 arms buyer in 1990 was Afghanistan, with agreements totaling $3.7 billion. No. 3 was Iran, at $2.8 billion, and No. 4 was India, at $2 billion. It is no surprise that the biggest regional market is the Middle East. In recent years Asia has usually ranked second, with Latin America the third-largest buying region. This order is likely to continue unless calls for a restraint agreement on Middle East arms sales are heeded by the developed world. Such an agreement "could result in notable reductions in the overall third-world arms trade," according to Grimmett.

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