World View : Arms Race, Round 2 : The region that brought you the Gulf War is fast becoming the world’s hottest arms bazaar. Exhibit A: Abu Dhabi.

A “New World Order” is being built. “Peace dividends” are being declared.

In fact, confirms Ian Anthony, an arms expert at the Stockholm International Peace Research Institute, “the single most crucial development in the global arms trade was the end of the Cold War. You no longer have the two superpowers willing to subsidize arms purchases for strategic or ideological reasons. . . . There’s no question the market has shrunk.”

Still, global spending on weapons of destruction is awesome. The developing world continues to shell out, on average,nearly $70 million daily for arms, ammunition and military hardware, according to the latest figures available. And with the collapse of the Soviet Union, the United States is the world’s biggest arms seller.

Moreover, while global arms spending is on the wane, two regions are running counter to the trend. One seems perpetually among the world’s most unstable areas. But the other is arming even as it enjoys a period of relative peace and prosperity.

Here are two reports on the world’s booming regional arms bazaars, the different forces that are fueling them and their prospects for the future.

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For five days last month, dozens of pavilions at Abu Dhabi’s International Defense Exhibition were overflowing with arms merchants and weapons buyers from Johannesburg to Moscow, London to Los Angeles and Tehran to Taiwan.

Attending what was billed as the largest and most sophisticated arms bazaar in history--in a land where Bedouins once traded camels for flintlock rifles--manufacturers from 350 companies in 34 different countries vied with defense ministers for hotel rooms in the tiny Persian Gulf emirate. Abu Dhabi was so overbooked due to the show of the latest antimissile missile systems, anti-submarine helicopters and state-of-the-art battleships that many had to stay more than 100 miles away in Dubai or Sharjah, commuting to the fair by helicopter and private jet.

By all accounts, though, it was worth it. And, before the exhibition ended, it had become a dramatic symbol of one of the most frenzied shopping and selling sprees in the history of global arms sales. It was a show of market force that capped billions of dollars in recent weapons deals between the West and the Gulf states--all of them coming in the two years since President George Bush ended the U.S.-led war on Iraq by declaring the beginning of a new chapter of demilitarization in the region.

In Abu Dhabi, there were dazzling two-hour shows of Russia’s once top-secret, computer-guided missile systems each day, along with the equally arcane antimissile technology Moscow had designed to destroy them. Abu Dhabi’s Port Zayid harbor was tip-to-stern with the latest in anti-submarine warfare vessels--items of particular interest in a region where Iran recently bought three used Russian conventional submarines for nearly $1 billion. For the first time ever, even South Africa had its own pavilion, where it pushed its latest G-6 laser-guided artillery guns.

And, at the height of the weapons fair, the oil-rich United Arab Emirates made international news by announcing its purchase of more than $4 billion worth of French Leclerc main battle tanks--just one of more than half a dozen major regional arms purchases in recent months that, taken together, have made this the hottest market in the global arms bazaar.

The nations of the still-unstable Gulf region have announced deals representing tens of billions of dollars in the past six months alone. They include a huge Saudi order for American F-15 ground-attack fighter jets, Kuwait’s orders for hundreds of America’s latest M-1A2 Abrams battle tanks and contracts from other Gulf states for high-tech radar systems that have helped bolster U.S. and European arms manufacturers hard hit by the end of the Cold War and domestic military cutbacks.

Defense experts caution that, despite the dramatic numbers, the regional arms buildup remains in its infancy, and weapons purchases in the Gulf during the past two years actually total less than they did at the peak of the Iran-Iraq War, which ended in 1988, and of the global Cold War that ended soon after.

Also, official statisticians who are charting the arms race in the Persian Gulf say it has yet to reach the dollar levels of weapons buying in the Far East--although the Gulf is expected to eclipse the newly rich Asian nations by the end of this year.

But, the weapons-trade analysts added, the Middle East’s arms bazaar is nonetheless a booming trade, particularly at a time when the dollar value of the global weapons market has shrunk because both the United States and the former Soviet Union stopped arming client states through heavily subsidized, ideologically motivated weapons programs. And, they stressed, it is the Gulf region and the Middle East as a whole that will remain the hottest and most durable consumer of the tools of destruction, perhaps through the end of the 20th Century.

“The big bucks are in the Gulf, largely because it’s one of the few regions in the world where countries have cash to spend,” said Richard Grimmett, a defense specialist with the U.S. Congressional Research Service in Washington, the world’s most authoritative monitor of Western arms sales to the Third World.

“Sure, sales are way up, but I don’t think there’s been as much buying as we’re going to see,” added an arms salesman based in the region. “People say the Gulf countries have been going shopping mad. But really, they haven’t been, compared to what we’re going to see.”

Already, though, the numbers are staggering indeed.

Together, the nations of the Gulf have ordered high-tech armaments and military systems worth an estimated $40 billion just since the end of Operation Desert Storm in March, 1991--despite cease-fire terms that froze all weapons sales to Iraq, which had been one of the world’s largest single purchasers of weapons. Collectively, Gulf nations have announced plans to spend an additional $10 billion on military hardware each year until the end of the century in an effort to balance the power in a region where Iran is now engaged in one of the largest defense buildups on the globe.

As a clear indicator of the pattern of global arms consumption, the latest figures available from the Congressional Research Service defense analysis department show that six of the 10 nations accounting for the lion’s share of the $24.7 billion in Third World arms spending in 1991 were in the Gulf and Middle East. Saudi Arabia’s $7.8 billion in orders made it the Third World’s largest single weapons purchaser--more than twice as large as the $3.1 billion in weaponry ordered by second-place South Korea.

In the months since those figures were tabulated, Saudi Arabia, Kuwait and the other Gulf states have announced post-Gulf War weapons deals worth nearly $20 billion more--among them the Saudis’ planned purchase of 72 American F-15 fighter jets and 465 Abrams tanks and Kuwait’s multibillion-dollar deal for hundreds more of the General Dynamics-built M-1A2 main battle tanks.

The Gulf arms-buying spree is based in large part on the memory of Iraq’s August, 1990, invasion of a hopelessly outgunned Kuwait--and fear that history might in some similar form repeat itself.

The Middle East arms boom is considered all the more worrisome because of simmering regional conflicts--border disputes between virtually every country in the region and a strong, shared distrust among the Gulf states of Iran, which already has replaced Saddam Hussein’s Iraq as the new regional superpower.

“I find the whole thing a bit worrying,” said Ian Anthony, an arms-trade analyst with the Stockholm International Peace Research Institute, which also monitors weapons deals between nations. “I don’t see the purchases relative to a stable regional political or diplomatic situation--especially given the national imbalances that exist in the region. Relations between those countries in the Arabian Peninsula are not particularly stable.”

Another driving force behind the Gulf’s weapons-buying spree, the experts say, is a clear-cut case of post-Cold War oversupply--an arms glut in Russia and the West, particularly in nations heavily dependent upon state-run weapons industries that no longer can sell enough to their own governments or sell for cash abroad.

“This is the main reason you’re seeing all this hype around the big air shows and arms bazaars,” said defense specialist Grimmett. “The manufacturers have a lot to sell and a big stake in being able to sell it. But there aren’t many buyers with cash to spend outside of the Gulf region. So you’re seeing tremendous competition, particularly in the areas of high-tech, modern and defensive weapons systems.”

Analysts cite Western Europe’s largely state-run military-industrial complexes, and particularly, Britain’s huge defense manufacturing sector.

Unlike U.S. arms manufacturers, whose main customer at the Pentagon has been so reliable that the U.S. Defense Department routinely has bought 20 times the amount of military hardware U.S. manufacturers have exported each year, European manufacturers such as British Aerospace and Vickers Defense Systems Ltd. have been far more dependent upon foreign clients than on their own governments.

A dramatic example: British Prime Minister John Major’s tour of the Gulf in late January, which was declared a resounding success largely because the prime minister announced at its conclusion that he had landed arms deals for British companies worth nearly $6.5 billion.

“When you consider that (a significant portion) of the working population in the United Kingdom is in defense-related industries, you can see why John Major wants to get on a plane and flog a few tanks,” said a British arms merchant in the Gulf, who asked not to be identified by name.

The arms salesman was among those predicting that recent big-ticket, high-tech sales are only the first of many that will follow--particularly in the fields of military training and support equipment. And he disagreed emphatically with analysts who view the trend as a threat to the oil-rich region’s future stability.

He and other veteran arms merchants in the region argue that the nations now buying the massive weaponry lack sufficient personnel and training to be viewed as offensive threats. Saudi Arabia’s active-duty army, for example, consists of just 70,000 men; the United Arab Emirates, which hosted the defense exhibition in its capital, has just 45,000 regulars, 30% of them foreign mercenaries, and strategic Oman has just 30,000 men, 3,700 of them foreigners.

“I don’t know who’s going to man all these tanks they’re buying,” he said. “Who’s going to fly these state-of-the-art fighters? They lack the manpower to build navies of any significance. And, at the end of the day, they’re so useless militarily, I really wonder why they bother,” the veteran Gulf arms dealer, who represents an American weapons manufacturer, said after spending all five days at the Abu Dhabi arms show last month.

“If push comes to shove in this neighborhood, they know that (the United States will) be there to help them. In the meantime, they have to be perceived to be doing something. And, in a world with little cash and even less credit, they’re just about the only countries left to buy all the stuff the West is so desperate to sell.”