Global Recession Spurs Competition in Arms Sales

09.26.11 | 2 min read | Text by Steven Aftergood

Led by the United States, arms-exporting nations are competing ever more intensely to win lucrative sales contracts in a shrinking global marketplace, according to a new report (pdf) from the Congressional Research Service.

“Worldwide weapons sales declined generally in 2010 in response to the constraints created by the tenuous state of the global economy,” the report said.  The value of all arms transfer agreements with developing nations declined from $49.8 billion in 2009 to over $30.7 billion in 2010.  At the same time, however, the value of all arms deliveries to developing nations was nearly $21.9 billion, which is “the highest total in these deliveries values since 2006.”  See “Conventional Arms Transfers to Developing Nations, 2003-2010” by Richard F. Grimmett, Congressional Research Service, September 22, 2011.

Yet “as new arms sales have become more difficult to conclude since the global recession began, competition among sellers has become increasingly intense,” the report said.

“A number of weapons-exporting nations are focusing not only on the clients with whom they have held historic competitive advantages, due to well-established military-support relationships, but also on potential new clients in countries and regions where they have not been traditional arms suppliers.”

Meanwhile, “[D]eveloping nations have been leveraging their attractiveness as clients by demanding greater cost offsetting elements in their arms contracts, as well as transfer of more advanced technology and provisions for domestic production options,” the report said.

The United States dominates the global arms market both in sales agreements and in deliveries, according to the CRS report, which was first reported in the New York Times on September 24.

The annual CRS reports prepared by Mr. Grimmett are authoritative compilations of official data on arms transfers, based on privileged access by CRS to government records.  As such, they may have enduring reference value for researchers in the field (despite the fact that the reports do not include clandestine or covert transfers).   A collection of all CRS annual reports on conventional arms transfers dating back to 1982 is available on the Federation of American Scientists website here.  Additional background is available from the FAS Arms Sales Monitoring Project.