Global Growth in Guns

ECONOMY & BUSINESS

Few businesses are as politically sensitive or as subject to moral condemnation as the world trade in weapons. For that reason, government officials and private businessmen who negotiate sales of guns, jets, tanks, warships and other instruments of war are notoriously secretive about their dealings. One secret, however, can no longer be kept: largely because of hot buying by Middle East oil countries, the export of arms, long a global growth industry, is accelerating to near supersonic speed.

Total international sales of weapons approached $15 billion last year, more than double the $6.2 billion exports of 1971. The U.S. maintained the world lead, recording orders for more than $5 billion, up 20% from the year before (both figures exclude weapons given away under formal military-aid programs). The Soviet Union ran a close second, registering sales of $4 billion, followed by France, with $1.4 billion. No fewer than 53 other countries also sold arms outside their own borders. Even neutral, pacifist Sweden has exported some $300 million worth in the past three years.

Still Testing. The energy crisis is indirectly intensifying the arms boom. Middle East nations, flush with fast-mounting oil revenues, are gobbling up military hardware to brandish against Israel and, occasionally, each other. Iran, which fought in a brief border clash with Iraq a few weeks ago, bought $2 billion in ships, planes and missiles from the U.S. last year. Within the past few months, it has ordered $900 million worth of Grumman F-14 Tomcat fighters, and it is negotiating with McDonnell Douglas Corp. to buy 50 F-15 Eagle fighters, a model so new that the U.S. Air Force is still testing it.

At the same time, other Western oil-importing nations are vigorously hawking-arms to the Arabs, in part to pay their higher petroleum bills. France is about to conclude an agreement to sell Saudi Arabia 38 Mirage IIIE fighter-bombers, 275 AMX-30 tanks and assorted other military items. In return, the Saudis have agreed to provide France with about $50 billion worth of oil over the next 20 years. Britain last week was completing delivery of twelve Westland Mark I commando-carrying helicopters to Egypt, and British salesmen are now trying to interest Saudi Arabia in some Scorpion light tanks.

Even West Germany, which officially disdains the sale of armaments, is said to be back in the arms business. Despite government denials, reports persist that Bonn is negotiating to build a tank-parts factory in Teheran. Private German armsmakers report soaring sales to the Middle East and tacit government encouragement of any deal likely to win favor with the oil exporters. Says a veteran weapons dealer in Bonn: "If you know the secret word, you can get an arms export license to any Arab country in eight days. The secret word is oil."

Middle East nations are far from the only customers for Western weapons. Other developing countries, including Turkey and Venezuela, are also eager buyers. In addition, the major arms-exporting nations sell about half their lethal wares to industrial powers like themselves. The U.S., for example, imports Beretta light machine guns from Italy and sells Phantom jet fighters to West Germany.

Less Choosy. Governments of the arms-producing nations insist that they will not let just any country buy from their weapons makers. France maintains a blacklist that is said to be longer than the list of approved customers. Recently, Paris refused to permit shipment to Chile of 35 AMX tanks that were ordered before the armed forces there overthrew the Allende government in a bloody coup. U.S. manufacturers are bound by the stringent 1968 Foreign Military Sales Act, which, among other restrictions, prohibits arms exports to countries that seize U.S. fishing boats. Says a State Department official: "Read that as Ecuador."

Nonetheless, most governments are steadily getting less choosy about whom they will deal with. Britain late last year dropped a prohibition on arms sales to nations involved in the recent Middle East war. France is expected to lift a similar ban any day. In the U.S., the Nixon Administration has changed course and is now willing to permit sales of sophisticated weapons to Latin American countries other than Ecuador. Presidents Kennedy and Johnson believed that Latin countries that used scarce resources to buy supersonic fighters were in effect taking food out of the mouths of their people. Nixon officials reasoned that the Latin generals were only buying their weapons elsewhere.

Several governments, indeed, are going beyond merely licensing arms exports and taking over much of the burden of salesmanship. Britain has compiled a 734-page catalogue of almost every military item that the nation's manufacturers offer, from corvettes to combat socks. France maintains a permanent exposition near Versailles for the drop-in trade, and publishes its own three-volume catalogue. Sample prices: hand grenade, $1.80; AMX-30 tank, $400,000; Mirage III reconnaissance jet, $1,500,000. Only about 20% of U.S. arms exports are negotiated by private manufacturers who obtain export licenses from the State Department. The rest are sold by the Government, acting as a middleman.

With such eagerness to sell, it seems inevitable that more and more arms will turn up in unauthorized hands, however governments may try to control the trade. France officially opposes colonialism. But not long ago French officials discovered to their embarrassment that helicopters supposedly sold to Liechtenstein--a tiny principality wedged between Switzerland and Austria--were actually being used by Portugal to suppress black independence movements in Angola and Mozambique. And Italian police recently arrested five Arabs with two missile launchers that they had allegedly intended to use to knock an airliner out of the sky over Rome's Fiumicino Airport. Where had they gotten such advanced weapons? Police say that they bought them in Italy.

This file is automatically generated by a robot program, so viewer discretion is required.