Capabilities of Potential Adversaries Are

Limited and Will Likely Be Slowly Improved

Figure 3.1: Trend in the Worldwide Transfer of Conventional Arms (Constant 1994 Dollars in Billions)

During the Cold War, the Soviet Union was a primary supplier of arms to
the Third World, often providing weapons without charging for them. Now
Russia generally requires payment, often in hard currency, for the
weapons it transfers. The latest available ACDA data show worldwide
Soviet Union/Russian transfers fell from $23.1 billion in 1987 to $1.3 billion
in 1994. China also reduced its arms exports over that period.2 Agreements
for future deliveries also fell for Russia and China from the levels of the
1980s. However, Russia has increased the value of its agreements for
future weapons deliveries since 1992.

2An August 15, 1996, Congressional Research Service report on conventional arms transfers shows an increase in transfers in 1995 over 1994. The percentage of the market held by Russia and China increased to 13 percent. The United States and its allies remained the dominant suppliers of arms and developing countries friendly to the United States were the principal recipients.

Capabilities of Potential Adversaries Are

Limited and Will Likely Be Slowly Improved

While overall arms transfers have fallen, those who have been buying have
shown a preference for American and Western European equipment.
Buyers prefer proven high quality weapons that are accompanied by good
logistics support. For the most recent 3-year period available, 1992 to 1994,
the arms market in terms of actual arms transfers has been dominated on
the seller side by the United States and a few of its North Atlantic Treaty
Organization (NATO) allies, and on the buyer side by allies of the United
States in Europe, the Middle East, and East Asia. Transfers to the Middle
East by supplier are shown in figure 3.2.

Figure 3.2: Arms Transfer Deliveries to the Middle East by Source (1992-94)

U.S. and allies (86%)

Russia and China (7%)

Rest of world (7%)

Source: World Military Expenditures and Arms Transfers, 1995, ACDA.

As figure 3.2 shows, 86 percent of the value of actual deliveries of
conventional arms to the Middle East for the period shown originated
from the United States and four close allies-the United Kingdom, France,
Canada, and Germany-and were primarily to members of the Gulf War
coalition. Only about 14 percent came from Russia, China, and other

Capabilities of Potential Adversaries Are

Limited and Will Likely Be Slowly Improved

sources, and some of that total also went to U.S. Gulf War allies in the Middle East.

The pattern for arms sales agreements for future deliveries is similar; that
is, the United States and its NATO allies are the dominant suppliers (see
fig. 3.3).

Figure 3.3: Agreements for Future Deliveries to the Middle East by Source (1992-94)

U.S. and allies (92%)

Russia and China (4%)

Rest of world (4%)

Source: World Military Expenditures and Arms Transfers, 1995, ACDA.

From 1992 to 1994, almost 92 percent of the value of sales agreements for future conventional arms deliveries to the Middle East were made by the United States, the United Kingdom, France, and Germany. Only 8 percent of agreements for future Middle East deliveries originated from Russia, China, or the rest of the world.

The decline in transfers has been accompanied by the contraction of the arms industries of many weapons exporters in terms of both production and development. Arms manufacturing nations have tended to reduce the size of their own armed forces and their arms production capabilities since

Capabilities of Potential Adversaries Are

Limited and Will Likely Be Slowly Improved

the Cold War ended. Development programs have been slowed in many cases, and major weapon production programs have been subject to delay, reduction, or cancellation. Although arms producers want to continue exports to protect domestic jobs and reduce the cost of modernizing their own forces, they are presently finding few large buyers. Arms deliveries to India have fallen substantially and transfers to Pakistan have fallen since 1990. The buying spree of America's Persian Gulf allies has also slowed. At the same time, potential adversaries that may desire advanced weapons have not been obtaining them or placing orders with producers, in part because of economic constraints and internationally imposed limits on arms transfers.

High Costs and
Export Restrictions
May Limit Advances
in Capability

While the development of more capable weapons is likely to continue, the ability of potential adversaries to obtain these weapons in large numbers is not assured. The cost of modern high technology weapons continues to grow, while the ability of these countries to afford such systems is constrained. Additionally, international efforts to restrict arms and technology proliferation have been increasing in terms of both the types of technology targeted and the number of exporting nations agreeing to restrictions.

Weapons Prices Increase
While Potential
Adversaries' Economies
Stagnate

The high technology weapons that could seriously threaten U.S. air power
are expensive, no matter what the source. For example, each aircraft that
is part of the original Eurofighter 2000 tactical aircraft contract is
projected to cost about $75 million. An advanced surface-to-air system like
the Patriot PAC-3 costs over $100 million per battery. Nations that depend
on export sales of selected commodities to finance their militaries or that
have closed economies could find it much harder to afford high
technology systems. The more likely course for these nations is to upgrade
their existing equipment, either by mixing new components with their old
systems or through other upgrade programs from arms suppliers. Although
such attempts could offer new challenges to the United States and its
allies, they would be less threatening than more modern equipment.

International Agreements
Could Inhibit Capability
Enhancements

Part of the National Military Strategy entails increasing cooperation with regional allies while containing regional powers not friendly to the United States and its allies. Conventional arms control is part of this strategy. Some international agreements/collaborations and domestic weapons export policies are designed to limit the opportunities for regional powers

Capabilities of Potential Adversaries Are

Limited and Will Likely Be Slowly Improved

to acquire advanced weapons. For example, the United Nations imposed sanctions on more than one nation in the 1990s, prohibiting transfers of weapons or commercial technology to these nations that could be used for military purposes. ACDA data show no measurable arms transfers to nations under U.N. sanctions since sanctions were imposed.

A key collaboration, the Wassenaar Arrangement, took effect in December 1995. This arrangement—the goal of which is complete disclosure of arms transfers-has 28 member nations. This cooperative effort replaces the Coordinating Committee for Multilateral Export Controls (COCOM), the Cold War regime that limited arms and technology transfers to Soviet bloc nations. The Wassenaar Arrangement has identified several nations that are to be excluded from arms exports or exports of potential dual-use technology—that is, technology with military as well as commercial applications. It is hoped that this agreement will allow major weapons producers to target volatile regions for restraint in the transfer of arms. Although Wassenaar does not constitute a formal treaty, major arms manufacturing countries have agreed to its arms transfer restrictions as part of their country's domestic arms transfer policies.

A third major arms control agreement, the Missile Technology Control Regime, was created in 1987 and is designed to specifically limit the transfer of missiles-including cruise and ballistic-and missile-related and dual-use technology. Original members were major NATO partners and Japan, but the Regime has been expanded to include more than 20 nations.

The combination of U.N. sanctions, the Wassenaar Arrangement, and the Missile Technology Control Regime represent an obstacle to potential adversaries that seek to acquire highly capable weapons and advanced technology. Again, ACDA data indicate sharply reduced transfers to these nations in recent years, and there are no indications these agreements will be relaxed significantly in the near future. In fact, according to the State Department, the United States intends to strengthen the Wassenaar Arrangement. Given that Wassenaar members are the major arms producers and that potential adversaries generally lack an indigenous advanced weapon development and production capability, the potential for significantly inhibiting potential adversaries from improvements in capability is, to a great extent, in these member nations' hands.