Czechoslovaks Still Turning Out Arms Despite Outbreak of Peace : Weapons: Conversion of plants is on a slow track amid enormous pressure to retain manufacturing jobs.

It has been the most agonizing of reappraisals by the peace-loving leaders of Czechoslovakia, but there seems no way out. This country, once a major manufacturer of the East Bloc’s weapons arsenal, is going to stay in the arms business.

Selling weaponry goes deeply against the grain of President Vaclav Havel and most of the former dissident figures who came to office with him in 1990, but hard-nosed politicians, even those who want to see the country’s traditional arms makers convert to the production of farm implements or electronics, say that weapons production cannot be phased out quickly.

“There are some things we will have to do over time, and some things we can do quickly,” said Foreign Minister Jiri Dienstbier, a longtime Havel associate, when he assumed office. When asked what could be done quickly, Dienstbier said, “Well, for one thing, we can stop producing weapons.”

“Those were euphoric days,” said Jan Solc, chairman of the defense subcommittee of the federal Parliament, which is drafting new legislation it hopes will control an industry that, although depressed by a sudden decline in sales, has spawned many new salespeople, hoping to cash in on what demand there is.

Finance Minister Vaclav Klaus said recently in Washington that Prague aims to cut its arms production by 80% of present levels by 1997. In the meantime, he said, arms production will continue, perhaps reaching record outputs this year. Klaus said that production peaked in 1987, when output reached 29 billion Czech crowns, or a little over $1 billion at today’s exchange rates.

Since early 1990, when the state-owned arms-selling concern, Omnipol, lost its monopoly, at least 24 firms have jumped into the business, most of them welcomed by the country’s 28 arms factories, eager to unload stockpiles of weaponry.

Since 1989, when the political revolutions swept Eastern Europe, arms sales to the former Warsaw Pact countries and the Soviet Union have ceased entirely, and most plants have weapons stocks piled in warehouses. They are eager to do business.

Although some plants are working on conversion and have been given state assistance to attempt the changeover, there is enormous pressure to continue manufacturing weapons, including the heavy and outmoded Soviet-designed T-72 tanks from the heavy weapons and machinery factory located in Martin, in Slovakia.

It is a controversial business, and this was illustrated recently when a German freighter in the Mediterranean was halted carrying a load of Martin tanks bound for Syria. Another freighter was similarly halted by the Danish government. Israel has protested the sale of the tanks in a diplomatic note that lawmaker Solc called “polite but firm enough.”

“Our friends have been understanding,” Solc said of the sale of the tanks (the deal was for 250 of the T-72s), “but we cannot expect that understanding to last indefinitely.”

Despite the controversy generated by weapons-making in Czechoslovakia, the pressure of unemployment has had at least equal force. Most of the arms industry is located in Slovakia, where unemployment exceeds 10%, double the level in the Czech lands. Of the 45,000 industrial workers who have lost their jobs, 85% have been in the arms industry.

It is a steep fall for an industry where workers had always enjoyed a high standard of living (with salaries commonly three times that of other industrial workers) and guaranteed job security. Before 1989, the arms industry represented 8% of the country’s gross national income, according to government figures.

The problem is further complicated by the continuing divisions between the Czechs and the Slovaks. Slovak politicians, appealing to nationalist sentiments, charge that phasing out arms manufacture is a device to make the Slovaks pay for the moral qualms of the Czechs.

Vladimar Meciar, head of the leading Slovak party, pressed the federal prime minister, Marian Calfa, on behalf of the 1991 Syrian tank deal and has argued that the government’s policies on arms sales were “irresponsible.” He further warned that if Czechoslovakia got out of the arms business, other countries would enter it.

The government has responded gingerly. It approved the sale of the Syrian tanks, over the objections of the United States and Israel, and it seems unlikely to approve such an explosively controversial sale in the future. But Vladimir Dlouhy, the federal economic minister, said recently in a tour of Slovak arms factories that the government would take a pragmatic approach to arms sales and would approve them if they conform to policies set by the Foreign Ministry.

Officials say the list of forbidden clients includes Yugoslavia, Arab countries, North Korea, China, Cuba and Somalia, with Pakistan listed as “not recommended.”

In the years between 1984 and 1989, the leading buyers for Czechoslovak arms were the Soviet Union, Libya, Iran, Syria, Algeria and Cuba. Sometime in this period, Czechoslovakia sold Libya about 1,400 pounds of Semtex plastic explosive--a transaction for which Vaclav Havel apologized to the world.

A well-documented article in the Prague weekly Respekt recently argued that Czechoslovak tanks are so old and outmoded that virtually the only future market for them is likely to be “poor, conflict-ridden” countries. It also charged that in a meeting in Islamabad, Pakistan, last year, several Prague officials discussed the sale of Czechoslovak tanks.

Respekt also said that money the government had allotted to many arms factories for conversion to other products had wound up paying the salaries of factory managers. “It would be logical to convert,” Respekt said. “But the pressure of arms dealers is stronger than logic.”

In the cloak-and-dagger secrecy attending many arms deals, controls have proved difficult to enforce. Even when deals are approved by a watchful Foreign Ministry, weapons can frequently turn up where they were not expected. Last September, a Nigerian cargo plane was grounded by the Yugoslav air force, carrying weapons that Yugoslav officials said were bound for Croatia.

In a quiet suburban neighborhood of Prague, Pavel Jerabek, 36, operates a trading company from his house, dealing mostly, he said, in textile production equipment to India or the Far East. But last year, he registered his firm, Loyal Trading, with the Ministry of Foreign Trade as a potential arms dealer.

“It is just a side business,” he said, “not bread and butter.”