World View : Shifting Battle Lines in Arms Race : A shortage of cash has cut into global weapons purchases. But some individual nations and regions are surging ahead.

Four years after the fall of the Berlin Wall signaled the onset of global change, the race to acquire the world’s deadliest and most destructive weapons is far from over.

Rather than open an era in which the world can convert swords into plowshares, the end of the Cold War instead finds nations devising ever more ingenious ways to improve their arsenals by upgrading arms rather than buying anew, to expand arsenals by tapping into a postwar weapons glut and to disguise big-buck spending on national security by playing financial shell games.

Even tangible progress heralded in a spate of new reports--a 15% cut in defense spending globally and a 20% decline in arms sales to the Third World last year (see box)--is so grossly uneven that it tends to obscure the military preparedness of several states and their potential threat.

Only a handful of countries, for example, now account for more than 75% of the world’s major weapons sales.

“Man’s quest for bigger and better weapons is not over,” said Eva Marie Loofe, an expert on military spending at the Stockholm International Peace Research Institute (SIPRI). “For several reasons, the new (disarmament) trends do not look permanent. Many can and probably will be reversed.”

Basic military doctrine and attitudes about the utility of nuclear weapons have undergone little fundamental change. And the progress so far does not herald any general commitment to a “new world order” in which countries proactively or altruistically disarm.

The biggest single cause of defense cutbacks is instead simple economics. Because of foreign debt and deep recessions, many Third World countries now lack sufficient cash reserves in hard currency to buy big guns, tanks and warplanes. Even some First World nations are financially strapped.

Meanwhile, former Soviet proxy states no longer have access to the grants and large discounts from Moscow that once gave them easy and relatively cheap access to sophisticated weaponry.

“No one’s cutting willingly. If economies improve, arms sales will go up again,” Loofe said.

Also, while the Cold War’s end may have slowed the production and sale of new arms, it hasn’t decreased the flow of older weapons. Indeed, it may even have facilitated arms transfers.

“Massive quantities of very lethal equipment have been released for practically nothing over the past four years,” according to Edward J. Laurance, an arms specialist at the Monterey Institute of International Studies and a U.N. consultant.

“If you’re a state or a sub-state, there’s literally tons of materiel being offered on street corners, in catalogues and at bazaars. A lot of people are particularly taking advantage of the fact that new states don’t have export-control laws in place yet,” he added, referring to the 15 former Soviet republics and other nations undergoing major political transformations.

Five worrisome trends are running counter to the good news about post-Cold War arms cutbacks, according to European and U.S. experts.

* Cascading. The first is described by a key new buzzword within the trade: “Cascading,” or the flow of arms from larger to smaller powers at minimal or no cost as a result of new arms pacts or the breakup of nations.

The 1990 Conventional Forces in Europe Treaty among the 53 members of the Conference on Security and Cooperation in Europe, for example, put limits on the number of tanks, warplanes and other war materiel the signers could keep in their arsenals.

But rather than destroy equipment--an expensive process in itself--several countries transferred some of their surplus to smaller or poorer allies. Among the thousands of transfers: Germany gave 11 tanks and 105 armored personnel carriers (APCs) to Turkey as aid, while the Netherlands transferred 100 tanks and 53 APCs to Greece.

And after the Soviet breakup, Moscow gave weapons from arsenals in Russia to other republics. Moldova, which didn’t have its own army two years ago, is now receiving equipment that was in the hands of Soviet troops based there.

The ominous side of cascading is that arms are often transferred to hot spots--thus contributing to the prospect of conflict.

“The good news is that the levels of arms among the world’s two major antagonists are down. The bad news is that there’s lots more equipment in the hands of countries that didn’t have them before. It’s taking weapons out of the hands of people who are not fighting and giving them to people who are often in or near hot spots,” Laurance said.

Once combatants over Cyprus, Turkey and Greece remain rivals, for example. Yet last year, Greece received 592 tanks and 206 APCs, while Turkey got 588 tanks and 335 APCs, all courtesy of cascading from Germany, the Netherlands and the United States.

And cascading among former Soviet republics has contributed to the increasingly bloody civil war in Tajikistan, fighting between Georgia and its Ossetian and Abkhazian minorities and the war between Azerbaijanis and Armenians.

* Surplus. Other weapons are flooding the market because, with the Cold War over, they’re now surplus. Many valued in the hundreds of thousands or millions of dollars in the 1980s are available in the 1990s for the price of junk.

In May, the Armed Forces Journal quoted the price of a Chieftain tank, which has normally sold in the range of $1 million, at around $4,000. The cost was based on its weight and the price of scrap per ton rather than the tank’s military value.

The British have over 800 fully equipped and operational Chieftains for sale at that price, the magazine reported.

The Cold War’s end has also shifted alliances and lifted restraints on doing business with the opposition. Several former rivals are now tapping into each other’s arsenals.

The United Arab Emirates last year almost bought 400 U.S.-made Bradley APCs. Priced at $1 million apiece, the sale would have been a classic Cold War deal. In the end, however, the emirates instead bought more than 400 surplus APCs from Russia. Although brand-new, they were priced as surplus--about $20,000 apiece, Laurance said.

* Upgrade. Rather than buy new weapons, an increasing number of countries are now upgrading what they have, according to Steve Irwin, a senior analyst at Defense Forecasts Inc. The cost is usually 20% to 70% of buying new materiel.

One of the dominant trends for the 1990s, experts now predict, will be upgrading warplanes, since most countries can no longer afford new fleets of big-ticket combat aircraft.

“Upgrading means that although the amount of money being spent is going down, the sophistication of weaponry and the combat capability are increasing,” Irwin said.

In one of the many ironic twists since the end to superpower rivalry, American companies are now offering upgrades on Soviet-made MIG-21 warplanes--as are the French, Israelis and, of course, Russians. All four, plus Britain and Canada, also offer upgrades on other equipment in one of the few growth industries in arms.

Fighter and bomber aircraft, helicopters, tanks and various warships can be upgraded, while artillery and missiles cannot, Irwin said. The key is often whether electronics can be improved--one of the reasons upgrading will for the near future be dominated by industrialized nations.

Some countries see opportunity in buying surplus equipment, then upgrading it. This year Pakistan has reportedly considered buying British Chieftains at $20,000 apiece and having them upgraded with advanced heat-seeking imaging devices. An alternative is to buy T-72 tanks--the Chieftain’s East Bloc equivalent--from Poland for hundreds of thousands of dollars more.

* Barter. Third World countries are also getting around rising economic constraints by bartering for arms. Supplier countries, particularly in the old East Bloc, are often willing to accept payment in kind because of declining interest in their military wares.

Russia, for example, has agreed to sell weapons to Iran, in defiance of pressure from the West, in exchange for oil that can either be consumed domestically or resold.

After weighing the merits of U.S. and Russian warplanes, Malaysia this year bought 18 state-of-the-art MIG-29 warplanes from Moscow. Kuala Lumpur initially hesitated due to fears that political instability in Russia might jeopardize supplies of spare parts. The clincher was Russia’s agreement to accept partial payment in Malaysian palm oil.

* Domestic Production. Finally, an increasing number of countries are now producing their own arms in ever wider varieties, according to Michael Renner, a senior defense researcher at the Worldwatch Institute. The trend within the developing world started in the 1970s, accelerated in the 1980s and is now expanding widely.

In 1990, Pakistan began production of heavy artillery, while Chile launched the manufacture of propeller-driven aircraft. South Africa began manufacturing military helicopters and, the next year, production of its own main battle tanks, Renner said.

Since the Cold War’s end, India has begun production or made plans to produce equipment it once imported, including main battle tanks, helicopters and guided missiles. Even the city-state of Singapore, once a producer only of small arms, is now producing large artillery.

Some countries are building up their independent capabilities because they no longer have a superpower shield and fear abandonment--a concern accentuated after the outside world’s refusal to intervene in Bosnia-Herzegovina.

“For 95% of the world’s conflicts in the post-Cold War world, it’s reasonable to say that there probably won’t be international intervention. So countries are looking to their own preparedness. They don’t want to depend any more on external security guarantees,” said Ian Anthony, a SIPRI arms specialist.

Other countries are simply expanding existing industries. Turkey, Greece and Spain, for example, are becoming arms producers through licenses from Western allies. Their current intent is to export mainly to cover initial costs, said Saadet Dager, also a SIPRI specialist.

Still other nations, notably China and Brazil, want to become Third World alternatives in the big-bucks world of arms sales--plans made possible by greater access to key technology. With the Cold War’s end, for example, China has acquired technology and scientists from Russia, a former rival, to upgrade its arms industry.

China is now adapting Russian technology for new types of lighter aircraft and electronics for tanks. The world’s most populous nation is also expected to be increasingly capable at sea with its own submarines and aircraft carriers, Dager predicted.

And Indonesia now makes helicopters based on German technology, while India and Pakistan both now produce their own missiles based on technology from, respectively, Russia and China.

The fact that most weapons produced in Third World countries are small or mid-size doesn’t diminish international concern.

“We still need to worry, because weapons don’t have to be expensive to be deadly or worrisome,” said Richard F. Grimmett, author of a new Congressional Research Service report on arms sales to the Third World.

“China sold only $100 million (worth of arms) in 1992 and was ranked a distant 10th,” Grimmett explained. “It’s way down from the time it sold to both Iran and Iraq during their war. But the fact is that China has the capacity to sell various forms of missiles which don’t have to cost a lot. So the dollar value is not the key. The issue is what’s being sold to whom--not necessarily how much--that defines whether there’s a problem.”

The enormous volume of lower- and middle-level weaponry--from machine guns to antitank weapons and artillery--already on the world market and the knowledge of how to produce them will also make them increasingly difficult to track or accurately monitor, the experts said.

Like the international arms trade, positive trends in defense spending since 1989 have also been overshadowed by countertrends.

One of the most worrisome is the way several countries cutting back on military budgets turn around and increase spending on internal security.

“We’re seeing a hidden reverse twist to military spending” that reflects the shift in threats from wars between countries to conflicts within states, said Dager of the Stockholm peace institute.

Of the five major new armed conflicts in 1992, in which more than 1,000 people died, four were internal: Azerbaijan, Tajikistan, Bosnia and Laos. (The Kashmir crisis involving both India and Pakistan was the fifth.)

“Because countries are afraid of internal breakup or fighting, they’re trying to accumulate small arms, sometimes even illegally, which may not register in the arms data. They’re also increasing paramilitary and police,” Dager added.

The level of cutbacks in military spending worldwide is also far from even. The global decline of 15% is largely due to the halving of spending in one year by the 15 former Soviet republics.

But the North Atlantic Treaty Organization’s military spending, of which the United States accounted for the largest percentage, actually rose, according to the 1993 SIPRI survey due out this month. U.S. military spending went up by 3.5% in real terms between 1991 and 1992, SIPRI figures show.

Even within the developing world, where spending generally has been falling for a decade, defense budgets are rising in the Far East and Mideast. Saudi Arabia, with $36 billion worth of weaponry bought in the 1989-1992 period, has accounted for fully one-third of all Third World arms purchases since the end of the Cold War.

And the cutbacks, as in Latin America and Africa, can be deceiving, since the long-term debt to pay for earlier arms acquisitions now stands at $1.06 trillion.

Cuts within individual countries also belie a growing collective expense.

The number of international peacekeepers, for example, has soared from a steady level of 10,000 to 15,000 in the late 1980s to 62,000 by the end of 1992, due largely to the rising number of internal wars. Accordingly, SIPRI reported, the costs of international peacekeeping quadrupled last year to $1.4 billion--an expense absorbed by the international community.

The bottom line on both decreased defense spending and cutbacks in arms sales is that neither necessarily bears any relation to diminished prospects for conflict.

“The most pessimistic aspect of the arms sale story is that most of the budding conflicts today are the result of the weapons scattered around the world during the Cold War, mainly the lower-end arms with which the world has become awash courtesy of the past half-century,” said William Durch, an international security specialist at the Henry L. Stimson Center in Washington.

“The breadth and depth of armament in general is already such that you can’t expect to dampen or avoid conflict because people don’t have guns, which might have been true of the first half of the century.”

Arms Sales to Third World

Since the Berlin Wall fell in 1989, the United States has become the world’s top arms exporter, and Russia’s exports have steadily fallen.

Marching Orders

Statistics shed light on the global arms slowdown since the Cold War ended. The figures below are from two new reports by the Congressional Research Service and by the Stockholm International Peace Research Institute.

WORLDWIDE--NOW

* Defense spending fell globally by 15% last year, and the value of foreign deliveries of major conventional weapons decreased even more--by about 25%.

* Nearly 80% of the world’s 100 largest arms manufacturers have significantly reduced personnel, due to slower business.

WORLDWIDE--FUTURE

* If the current pattern continues, world military expenditures by the year 2000 will be down one-third from what they were in 1992. The prospect of a future war in space is lower than it has been in a decade.

THIRD WORLD

* In this region--a perennial buyer of weapons during the Cold War--sales of warplanes, artillery, tanks and other arms, measured in constant dollars, declined by almost 20% in 1992.

* In 1991, arms sales to the Third World dropped from almost $29 billion to less than $24 billion--or about one-third of the 1985 high of nearly $65 billion.

* About 80% of all arms deliveries last year went to only 10 of the more than 150 Third World countries--mostly oil-rich nations in the Mideast and the economic “tigers” of Asia.

CHINA

* New arms contracts registered by China, the source of arms for several radical states, dropped to only $100 million last year from a whopping $2.3 billion in 1991.

TAIWAN

* Meanwhile, Taiwan is spending more. Last year, it shelled out $10 billion for weapons, mainly U.S. and French warplanes--the most of any developing nation. Saudi Arabia was second in orders ($4.5 billion) but first in terms of arms deliveries.

RUSSIA

* The value of Russian arms agreements with the Third World dropped to $1.3 billion in 1992, an extraordinary decline from a Soviet high in 1986 of $28.8 billion. Russia’s sales were always the biggest part of Soviet exports.