Global Policy Forum

By Rachel Stohl

On Oct. 23, 2008, the Congressional Research Service released the most recent version of its annual arms transfer report, "Conventional Arms Transfers to Developing Nations, 2000-2007." According to the report, U.S. arms agreements to both developed and developing countries increased from 2006 levels, re-establishing the U.S. position of top arms supplier to the developing world, a position that Russia claimed in 2006.

The CRS report (also known as the Grimmett report after its author, CRS Specialist in National Defense Richard Grimmett) defines developing nations as all countries except the United States, Russia, the European nations, Canada, Japan, Australia and New Zealand. The report examines 14 categories of conventional weapons: tanks and self-propelled guns, artillery, armored personnel carriers and armored cars, major surface combatants, minor surface combatants, submarines, guided missile patrol boats, supersonic combat aircraft, subsonic combat aircraft, other aircraft, helicopters, surface to air missiles, surface to surface missiles and anti-ship missiles.

Global arms sales totaled nearly $60 billion in 2007, an increase of 9.2 percent from 2006 values. The United States was again the world's most dominant arms exporter, making $24.8 billion (41.5 percent) of all global arms agreements. Although Russia maintained its second place position in overall sales, its new arms agreements were valued at $10.4 billion (17.3 percent), a decrease from its $14.3 billion in 2006. The United Kingdom held the third spot for new global arms agreements in 2007, with $9.8 billion, more than doubling its $4.1 billion total in 2006. Together, the United States, Russia and the United Kingdom made up 75.2 percent of global arms agreements.

Global arms deliveries fell in 2007, to $31 billion, down from $33.6 billion. The United States was also the largest deliverer of arms worldwide, responsible for over 41 percent of global arms deliveries with approximately $12.8 billion (41.3 percent). Russia was second with $4.7 billion, and the United Kingdom was third, with 2.6 billion. These three top countries were responsible for over $20 billion in global arms deliveries (64.8 percent). According to the report, the developing world accounted for 70.5 percent of new arms transfer agreements in 2007. Arms transfer agreements with the developing world totaled over $42 billion, an increase from the 2006 total of $38.1 billion. The United States was the largest arms trading partner with the developing world with new arms agreements in 2007 reaching $12.2 billion (28.8 percent of all agreements with the developing world). The United Kingdom made the second most arms deals with the developing world, with $9.8 billion (23.2 percent) and Russia was third with $9.7 billion (23 percent).

Despite the increase in new agreements, deliveries to the developing world fell to $17.2 billion in 2007, the lowest total of the eight years covered in the report. Total arms deliveries to these countries made up 55.6 percent of all global arms deliveries. The United States remained atop the leader board for new arms deliveries to the developing world with $7.6 billion (44.2 percent) in new arms deliveries, while Russia was second at $4.6 billion (26.7 percent).

Global arms sales reached new highs in 2007 due to a variety of factors. In some cases, countries purchased major weapon systems and completed integration of modernized weapon systems. In addition, foreign policy concerns - such as the global war on terror - contributed to increased U.S. arms sales to allies assisting with the global effort. Regional tensions - either real or perceived - have also led to increased purchases, particularly in the Middle East and Africa. Economic conditions are also relevant to these arms sales trends. The rising price of oil, in many cases, helped oil producing states finance their arms purchases. At the same time, oil importing states had to scale down their purchases due to restricted funds.

The main beneficiaries of these increased arms sales to the developing world were Saudi Arabia - the leader in arms transfer agreements among the developing world, with $10.6 billion in new agreements, India with $5 billion in new agreements and Pakistan with $4.2 billion. India was the leading developing world arms purchaser in the 2000-2007 period, and according to the report that can be attributed to India's military modernization program. India has also benefited from a resumption of arms sales from the United States (as has Pakistan), as part of U.S. post-Sept. 11, 2001 arms sales policy.

New military relationships have been the norm in the period of the report. In 2007, the Grimmett report described Russia's increased sales to Latin America, particularly Venezuela, which have been of particular concern to the U.S. policy-makers, as President Hugo Chavez has made no secret of his blatant hostility toward the United States. This years report echoes that trend and illustrates Russia's attempts to enhance support services associated with arms transfers and Russia's desire to expand its arms sales into North Africa, the Middle East and Southwest Asia. Russia is not alone in the latter; the United States is also expanding its military relationships and making inroads in countries previously absent from the list of U.S customers.

As the Bush administration comes to an end, U.S. arms sales are on an upward trajectory. The Obama administration will have to make significant decisions as to what their arms sales policy will look like, which may impact the total sales and list of recipients of U.S. arms in the near future. In the short term, however, the United States is in no danger of losing its domination of the global arms market, and will continue to supply billions of dollars of heavy conventional weapons around the world.