The international traffic in arms consists mainly of arms sales between governments or between government controlled firms and other governments. The traffic facilitates arms races in certain regions or between blocs. The supply of arms to an area of potential conflict is a destabilizing factor which increases the risk of conflict. The trade in armaments is one of the largest sectors of the global economy, exceeding oil. There is no recognized fixed-price range for weaponry and very few arms are sold at their true value. Rather deals are made, based on barter or cash, and there may be dubious allocations for "agents expenses", "percentages" and the like. The trade in nuclear weapons is subject to treaty control (although many 'nonnuclear' weapons could be used as part of a nuclear delivery system), but there is very little coordination or agreement concerning the types of non-nuclear weapons to be supplied and the types of clients that may receive them.
As an indication, the value of imports by third world countries of major weapons (ships, aircraft, armoured fighting vehicles and missiles) in 1982 was estimated as $8,448 million (1975 constant dollars). In 1972, imports were valued at $3,473 million on the same basis. Information about the transfer of other weapons (rifles, automatic weapons, mortars, artillery pieces) is fragmentary and unreliable. This can be compared with the report that arms sales to the Third World fell by 20% in 1992 to their lowest levels since at least 1985 (from $28.6 billion in 1991 to $23.9 billion in 1992, measured in constant dollars.) Sales from Russia fell to $1.3 billion from $5.9 billion in 1991, and a peak of $28.8 billion in 1986. (Russia was by far the largest arms producer and exporter of the Soviet Republics, and part of the reason for the fall in sales is the reduction of military aid programmes that granted large discounts to Cold War clients.) The USA, France and the UK were the three largest manufacturing countries exporting major arms to the Third World in 1991, to the value of $14 billion, $3.8 billion and $2.4 billion, respectively. The Middle East was the largest arms market in the Third World countries. Germany led all other nations in export of missiles and missile launchers in 1992.
The war between Iran and Iraq was able to continue for so many years partly due to the provision of arms from Europe and the USA. Between 1981 and 1988, Iran bought $17.5 billion worth of arms, Iraq bought $47.3 billion worth and developing nations as a whole purchased $301.4 billion worth. In 1988, the former Soviet Union sold $9.9 billion, the USA sold $9.2 billion, and France and China, each, sold $3.1 billion worth of arms to developing countries. Some of the other nations involved in arms sales include: Czechoslovakia, North Korea, Britain, Italy, Germany, Austria, Belgium, the Netherlands, Norway, Sweden, and Brazil.
Arms purchases by governments encourage producers to use resources in the production of arms instead of alternative types of production which might employ more people and strengthen the capacity of the economy in the producing country to produce items that would fulfill human needs. In addition, the arms trade often enhances the capacity of receiving governments to control their populations, hence arms trade may strengthen military regimes.
Savings on arms spending in the North could represent a promising prospect for massive increases in official development assistance to the South. Yet, instead of providing examples of restraint in this area, developing countries have been spending a greater proportion of their GDP's on the armed forces than the developed countries, with the added burden that most of their arms expenditures take the form of payment in hard currencies for imported weapons. In most cases, these countries are not responding to greater defence needs as much as to the intensive campaigns of the arms exporters, along with the importers' illusion that greater quantities of arms may bring greater security and stability. The Third World as a whole spends more on weapons than it spends on education and health combined; this obviously results in lower socio-economic growth rates and in greater chances of armed conflict.
Developing countries are often misled into believing that increased armament stockpiles will result in a parallel increase in national security, rather than realizing that armaments lead to greater chances of conflict; and that the only benefits go to those who export arms, in general for reasons only of their own short-term interests. Some money to buy arms by countries which are impoverished is undoubtedly taken from overseas aid allocations.
A provision of the 1994 USA Defense Department Authorization Act provides $1 billion in loan guarantees for the export of weapons to NATO members, Australia, Japan, South Korea and Israel. Such subsidies for foreign arms are a mistake. When America subsidizes its allies, other countries subsidize sales to their own allies and weapons proliferate exponentially.
If arms production is a serious disorder in the present world with regard to true human needs and the employment of the means capable of satisfying those needs, the arms trade is equally to blame. Indeed, with reference to the latter it must be added that the moral judgment is even more severe. As we all know, this is a trade without frontiers capable of crossing even the barriers of the blocs. It knows how to overcome the division between East and West, and above all the one between North and South, to the point-and this is more serious-of pushing its way into the different sections which make up the southern hemisphere. We are thus confronted with a strange phenomenon: while economic aid and development plans meet with the obstacle of insuperable ideological barriers, and with tariff and trade barriers, arms of whatever origin circulate with almost total freedom all over the world. Everyone knows that in certain cases the capital lent by the developed world has been used in the underdeveloped world to buy weapons. (Papal Encyclical, Sollicitudo Rei Socialis, 30 December 1987).
In the existing international structure certain arms transactions are clearly inevitable and, within the limitations of current international philosophy, admissible. So long as military alliances exist, it would be unrealistic to criticize the exchange of weapons among allies. The important area for examination is that which concerns the less developed countries.
It is unrealistic to assume that any single developing country will reduce arms spending unilaterally while its neighbours continue the arms race. In order for this to happen, there must be a mutual conviction of peaceful settlement, which is becoming increasingly unlikely as mutual trust steadily erodes.