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Chapter 13. International arms transfers
by Björn Hagelin, Pieter D. Wezeman, Siemon T. Wezeman and Nicholas Chipperfield
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* Chapter summary from the SIPRI Yearbook 2003:
Armaments, Disarmament and International Security
(Oxford: Oxford University Press, 2003)

Major conventional arms transfers in the period 1998–2002 remained at a post-cold war low. Despite an increase in the period 2000–2002, the five-year moving average for 2002 was the lowest so far. The five largest suppliers in the period 1998–2002 accounted for about 80% of major conventional arms transfers. While the trend for Russia has constantly increased since 1998, that for the USA has constantly decreased. France, Germany and the UK show varied trends over recent years.

The USA was the largest supplier in 1998–2002 with 41% of global deliveries. Russia accounted for 22% of total arms transfers, which gave it second place. However, for the second year in a row, Russia was the largest supplier, with 36% of global deliveries in that year. China was the fourth largest supplier in 2002, which was a major change from previous years. It accounted for 5% of all deliveries—mainly as a result of its deliveries of combat aircraft to Pakistan.

Among the major arms recipients were countries involved in wars against terrorism. The initial focus of military action was on Afghanistan, but intra-state conflicts in other parts of the world were redefined during 2002 by their respective governments in an attempt to gain legitimacy for their actions. Taken together, the cases studied did not support the hypothesis that levels of major arms transfers would be higher because of anti-terrorist deliveries in 2002. In fact, most transfers of major conventional weapons during 2002 were the result of decisions taken before September 2001.

It is uncertain how important anti-terrorist activities will be for the future trend in transfers of major weapons. On the one hand, major weapons might not be the most effective means for fighting terrorism. On the other hand, if military anti-terrorist activities multiply and become long, drawn-out operations, continued deliveries involving major weapons may be regarded as necessary in order to increase the chances of success. This could lead to new or additional legislation or reduced political willingness to implement arms export controls restrictively vis-à-vis certain countries. Should that happen, it could become increasingly difficult to distinguish between a legitimate ambition to support anti-terrorism abroad and attempts to help indigenous military companies to find foreign markets. Even without major long-term changes to that effect, low-level ad hoc transfers of major weapons could become important for smaller suppliers and make a substantial contribution to the military capability of particular recipients. It is not certain that such developments will support regional stability. To that should be added problems with illegal transfers.

There are also problems with implementing UN arms embargoes. There is a need for further development of instruments for enforcement, not only by closing legal loopholes but also by cooperating and coordinating the monitoring of arms transfers from departure to arrival at the authorized final destination.

Although few significant new developments took place in national arms transfers reporting during 2002, the EU showed a willingness to create more public transparency in arms transfers. Nonetheless, more scope for openness remains, not least at the regional level. The Organization for Security and Cooperation in Europe (OSCE) Document on Small Arms and Light Weapons is also a first step that could develop into an open and public report, also including transfers of small arms outside the OSCE area.

Appendices 13A, 13B and 13C provide data on the transfers of major conventional weapons.


Appendix 13D explains the sources and methods for the data collection.

Appendix 13E, by Peter C. Evans, explores the role of export credits and guarantees in the financing of arms sales.
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Easy credit for military equipment buyers induced by the competition between supplier states is the norm rather than the exception in the international arms market. Financing has emerged as an important factor in winning the large military equipment orders arising from NATO enlargement. The Polish competition for fighter jet aircraft, won by Lockheed Martin in December 2002 with the support of a $3.8 billion loan authorization from the US Government, illustrates the mixed incentives that drive supplier states to offer subsidized export financing. Only limited effort has been made internationally to extend export credit financing disciplines to the military sector.

CONTENTS
Introduction: Trends and challenges in international security
1. The Euro-Atlantic system and global security
2. Major armed conflicts
3. Multilateral peace missions
4. Afghanistan and the new dynamics of intervention: counter-terrorism and nation building
5. The nuclear confrontation in South Asia
6. The military and security dimensions of the European Union
7. Security sector reform and NATO and EU enlargement
8. The processes of budgeting for the military sector in Africa
9.The military sector in a changing context
10. Military expenditure
11. Arms production
12. New developments in unmanned air vehicles and land-attack cruise missiles
13. International arms transfers
14. Arms control in the new security environment
15. Nuclear arms control, non-proliferation and ballistic missile defence
16. Chemical and biological weapon developments and arms control
17. Conventional arms control in Europe
18. Supply-side measures

Annex A. Arms control and disarmament agreements

Annex B. Chronology 2002

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17-June-2003