A WORLD OF FIRE SALES

The world’s arms traders may be forgiven if they do not join the general rejoicing at the possibility of an early end to the eight-year war between Iran and Iraq.

The ferocious fighting around the Persian Gulf has cost more than a million deaths, disrupted world oil supplies and several times threatened to draw the superpowers to the brink of a confrontation. But for arms manufacturers, it has represented an unparalleled marketing opportunity worth, according to expert sources, perhaps $40 billion in new sales.

The high-tech anti-aircraft and anti-tank missiles surreptitiously provided to Iran by the United States, and the Chinese “Silkworm” anti-ship missiles, have probably been the most publicized weapons-deliveries of the war--though they account for only a minuscule fraction of total sales. Altogether, about 42 countries have supplied uncountable quantities of armored vehicles, artillery, small arms, ammunition and other conventional weapons to one side or the other, most of them to both sides.

Indeed, one of the most dangerous consequences of the long war has been to disrupt well-established patterns of world arms trade. There are now a host of new players in the international arms market, ranging from industrializing countries such as South Korea, Brazil and Argentina, to private companies operating without the sanction of their governments in nations as avowedly pacifistic as Sweden, Norway and the Netherlands.

Until the Iran-Iraq War, arms exporting was a somewhat structured affair. The data, of course, is shadowy, but according to the most authoritative sources, world arms sales have averaged about $30 billion a year in constant dollars throughout the 1980s, even including the sales to Iran and Iraq.

Normally, the United States and the Soviet Union each supply about a third of all arms traded, with France, and more recently China, bringing up the rear. Perhaps surprisingly, total U.S. sales in world market share have dropped slowly but steadily during the Reagan years, primarily because of the unwillingness to supply either Iran or Iraq in any consistent way. The Soviet Union at first high-mindedly refused to supply Iraq, a traditional client, but when France quickly moved into the breach, the Soviets reversed field and have been the Iraqis’ major weapons supplier for the past several years.

It is accurate, but somewhat misleading, to say that the lion’s share of arms sales are from the industrialized countries to the “Third World,” a term used by the arms research institutes to refer, in general, to countries outside the North Atlantic Treaty Organization and Warsaw Pact military alliances. Slightly more than half of U.S. arms sales during the 1980s have been to the Third World, and about two-thirds of the Soviet sales. The Third World accounts for virtually all sales of most other arms-trading nations--if only because the United States and the Soviet Union have such a lock on sales to their own power blocs.

While such a volume of arms sales is unquestionably deplorable, it is at the same time not generally true that the poor countries of the world are impoverishing themselves to buy weapons from rich countries. First, about half of all arms traded on the world markets are sold into the Middle East. That is, they are being paid for by oil or, as in the case of Israel and Egypt, primarily with U.S. loans that will probably never be repaid. Deplorable, to be sure, but not necessarily impoverishing. The remaining sales are to countries that can arguably afford them, such as Taiwan and South Korea, and possibly India; or, as in the case of Cuba, they are financed with money supplied by one or the other superpower in pursuit of its own foreign-policy objectives.

Overall, five countries--Egypt, Saudi Arabia, Israel, Taiwan and Pakistan--account for two-thirds of U.S. arms sales, with almost half going to Egypt and Saudi Arabia; and five countries--Syria, India, Iraq, Libya and Cuba--account for three-fourths of Soviet sales with about half going to Syria and India.

Despite the high-profile involvement of gold-braided military men in developing country politics, most national defense budgets are not a great burden on their economies. According to one recent compilation, only 16 countries in the world devote more than 10% of their national income to their military. Eleven of the 16 were in the Middle East. The others were, sadly, Cambodia and Laos, then the Soviet Union, North Korea and Nicaragua.

Two-thirds of the nations of the world keep their military requirements under--usually well under--5% of their income. Brazil’s 1987 defense budget, for example, is only about 0.7% of national income, proportionately only about an eighth as big as the United States’. No doubt Brazil could find better uses for the money, but it does not impose an extraordinary strain. Sub-Saharan African countries such as Ghana, Nigeria, the Congo and the Ivory Coast have defense budgets that range from 0.7% to 2.5% of their productive capacity.

Brazil, in fact, is the leading example, along with Israel, of how an entrepreneurial industrializing country can turn world’s arms appetite to its economic advantage. Brazil makes excellent armored vehicles, the Cascavel and the Urutu, reliable series of light jet aircraft, like the Tucano, and has converted them into a major exporting success.

Israel sells high-tech weapons and systems, such as the formidable Kfir jet fighter, and specializes in electronic components for old U.S. equipment. Israeli components kept the Iranian fleet of F-4 Phantoms flying throughout the war with Iraq. The Chinese and the South Africans are also major customers.

Brazil and Israel each account for about 23% of the arms sales by newly industrializing countries. Counting only locally manufactured arms--since many Third World arms exporters are simply reselling old Soviet or U.S. weapons--Brazil and Israel account for 80% of total Third World arms sales.

The success of Brazil and Israel has not been lost on other countries hoping to earn foreign exchange and build up local manufacturing capabilities. India, Argentina, North Korea, South Korea and Vietnam are all investing heavily in local armaments capacity. Although their technology may be a decade or more behind the big powers, they are beginning to produce some formidable hardware.

China, Brazil, Argentina, Israel and India have developed capacity to manufacture short- or medium-range missiles. And every country on that list, if it was truly determined, has the technical ability to fit its missiles with nuclear warheads.

For almost 40 years after the end of World War II, the United States and the Soviet Union could, despite the occasional free-lancing of countries like France or China, determine within broad limits the supply and pace of local arms buildups. They could thereby exercise substantial, if not always conclusive, influence over the course and severity of local conflicts throughout the world.

No one could argue that the two superpowers managed the world arms buildup either wisely or well. But the new world of multiple, sophisticated arms-supply points will certainly be far more dangerous. That may be the final curse of a cursed Gulf War.