Conventional Arms Transfers to Developing Nations, 1997-2004.

[The following are excerpts from the Conventional Arms Transfers to Developing Nations, 1997-2004, August 29, 2005. Note: Not all sections, tables, or figures are included. Those that are included will keep their original section, table, and or figure number. The report in its entirety can be viewed at the following web site: http://fas.org/asmp/resources/govern/109th/CRSRL0.33051pdf.]

Summary

This report is prepared annually to provide unclassified quantitative data on conventional arms transfers to developing nations by the United States and foreign countries for the preceding eight calendar years. Some general data are provided on worldwide conventional arms transfers, but the principal focus is the level of arms transfers by major weapons suppliers to nations in the developing world.

Developing nations continue to be the primary focus of foreign arms sales activity by weapons suppliers. During the years 1997-2004, the value of arms transfer agreements with developing nations comprised 62.7 percent of all such agreements worldwide. More recently, arms transfer agreements with developing nations constituted 57.3 percent of all such agreements globally from 2001-2004, and 58.9 percent of these agreements in 2004.

The value of all arms transfer agreements with developing nations in 2004 was nearly $21.8 billion. This was a substantial increase over 2003, and the highest total, in real terms, since 2000. In 2004, the value of all arms deliveries to developing nations was nearly $22.5 billion, the highest total in these deliveries values since 2000 (in constant 2004 dollars).

Recently, from 2001-2004, the United States and Russia have dominated the arms market in the developing world, with the United States ranking first and Russia second each of the last four years in the value of arms transfer agreements. From 2001-2004, the United States made $29.8 billion in arms transfer agreements with developing nations, in constant 2004 dollars, 39.9 percent of all such agreements. Russia, the second leading supplier during this period, made $21.7 billion in arms transfer agreements, or 29.1 percent.

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In 2004, the United States ranked first in arms transfer agreements with developing nations with nearly $6.9 billion or 31.6 percent of these agreements. Russia was second with $5.9 billion or 27.1 percent of such agreements. In 2004, the United States ranked first in the value of arms deliveries to developing nations at nearly $9.6 billion, or 42.6 percent of all such deliveries. Russia ranked second at $4.5 billion or 20 percent of such deliveries. France ranked third at $4.2 billion or 18.7 percent of such deliveries.

During the 2001-2004 period, China ranked first among developing nations purchasers in the value of arms transfer agreements, concluding $10.4 billion in such agreements. India ranked second at $7.9 billion. Egypt ranked third at $6.5 billion. In 2004, India ranked first in the value of arms transfer agreements among all developing nations weapons purchasers, concluding $5.7 billion in such agreements. Saudi Arabia ranked second with $2.9 billion in such agreements. China ranked third with $2.2 billion.

Introduction

This report provides unclassified background data from U.S. government sources on transfers of conventional arms to developing nations by major suppliers for the period 1997 through 2004. It also includes some data on world-wide supplier transactions. It updates and revises the report entitled Conventional Arms Transfers to Developing Nations, 1996-2003, published by the Congressional Research Service (CRS) on August 26, 2004 (CRS Report RL32547).

The data in the report illustrate how global patterns of conventional arms transfers have changed in the post-Cold War and post-Persian Gulf War years. Relationships between arms suppliers and recipients continue to evolve in response to changing political, military, and economic circumstances. Nonetheless, the developing world continues to be the primary focus of foreign arms sales activity by conventional weapons suppliers. During the period of this report, 1997-2004, conventional arms transfer agreements (which represent orders for future delivery) to developing nations have comprised 62.7 percent of the value of all international arms transfer agreements. The portion of agreements with developing countries constituted 57.3 percent of all agreements globally from 2001-2004. In 2004, arms transfer agreements with developing countries accounted for 58.9 percent of the value of all such agreements globally. Deliveries of conventional arms to developing nations, from 2001-2004, constituted 63.2 percent of all international arms deliveries. In 2004, arms deliveries to developing nations constituted 64.6 percent of the value of all such arms deliveries worldwide.

The data in this new report supersede all data published in previous editions. Since these new data for 1997-2004 reflect potentially significant updates to and revisions in the underlying databases utilized for this report, only the data in this most recent edition should be used. The data are expressed in U.S. dollars for the calendar years indicated, and adjusted for inflation. U.S. commercially licensed arms exports values are incorporated in the main delivery data tables, and noted separately. Excluded are arms transfers by any supplier to sub national groups. The definition of developing nations, as used in this report, and the specific classes of items included in its values totals are found in the text that follows.

Calendar Year Data Used

All arms transfer and arms delivery data in this report are for the calendar year or calendar year period given. This applies to both U.S. and foreign data alike. The United States government departments and agencies publish data on U.S. arms transfers and deliveries but generally use the United States fiscal year as the computational time period for these data. (A U.S. fiscal year covers the period from October 1 through September 30). As a consequence, there are likely to be distinct differences noted in those published totals using a fiscal year basis and those provided in this report which use a calendar year basis for its figures. Details on data used are outlined in footnotes at the bottom of Tables 1, and 2.

Constant 2004 Dollars

Throughout this report values of arms transfer agreements and values of arms deliveries for all suppliers are expressed in U.S. dollars. Values for any given year generally reflect the exchange rates that prevailed during that specific year. In many instances, the report converts these dollar amounts (current dollars) into constant 2004 dollars. Although this helps to eliminate the distorting effects of U.S. inflation to permit a more accurate comparison of various dollar levels over time, the effects of fluctuating exchange rates are not neutralized. The deflators used for the constant dollar calculations in this report are those provided by the U.S. Department of Defense and are set out at the bottom of tables 1, 2, 8, and 9. Unless otherwise noted in the report, all dollar values are stated in constant terms. Because all regional data tables are composed of four-year aggregate dollar totals (1997-2000 and 2001-2004), they must be expressed in current dollar terms. Where tables rank leading arms suppliers to developing nations or leading developing nation recipients using four-year aggregate dollar totals, these values are expressed in current dollars.

Definition of Developing Nations and Regions

As used in this report, the developing nations category includes all countries except the United States, Russia, European nations, Canada, Japan, Australia, and New Zealand. A listing of countries located in the regions defined for the purpose of this analysis Asia, Near East, Latin America, and Africa is provided at the end of the report.

Arms Transfer Values

The values of arms transfer agreements (or deliveries) in this report refer to the total values of arms orders (or deliveries as the case may be) which include all categories of weapons and ammunition, military spare parts, military construction, military assistance and training programs, and all associated services.

Major Findings

General Trends in Arms Transfers Worldwide

The value of all arms transfer agreements worldwide (to both developed and developing nations) in 2004 was nearly $37 billion. This is a significant increase in arms agreements values over 2003, and is the first year that total arms agreements have increased since 2000. Chart 1.

In 2004, the United States led in arms transfer agreements worldwide, making agreements valued at nearly $12.4 billion (33.5 percent of all such agreements), down notably from $15.1 billion in 2003. Russia ranked second with $4.4 billion in agreements (16.5 percent of these agreements globally), up notably from nearly $4.4 billion in 2003. The United Kingdom ranked third, its arms transfer agreements worldwide standing at $5.5 billion in 2004, up significantly from $311 million in 2003. The United States and Russia collectively made agreements in 2004 valued at nearly $18.5 billion, about 50 percent of all international arms transfer agreements made by all suppliers. Figure 1.

For the period 2001-2004, the total value of all international arms transfer agreements ($130.2 billion) was lower than the worldwide value during 1997-2000 ($139.2 billion), a decrease of 6.5 percent. During the period 1997-2000, developing world nations accounted for 67.7 percent of the value of all arms transfer agreements made worldwide. During 2001-2004, developing world nations accounted for 57.3 percent of all arms transfer agreements made globally. In 2004, developing nations accounted for 58.9 percent of all arms transfer agreements made worldwide. Figure 1.

In 2004, the United States ranked first in the value of all arms deliveries worldwide, making nearly $18.6 billion in such deliveries or 53.4 percent. This is the eighth year in a row that the United States has led in global arms deliveries, reflecting the magnitude of U.S. post-Persian Gulf War arms transfer agreements which are now being implemented. Russia ranked second in worldwide arms deliveries in 2004, making $4.6 billion in such deliveries. France ranked third in 2004, making $4.4 billion in such deliveries. These top three suppliers of arms in 2004 collectively delivered over $27.5 billion, 79.3 percent of all arms delivered worldwide by all suppliers in that year. Figure 2.

The value of all international arms deliveries in 2004 was nearly $34.8 billion. This is a nominal decrease in the total value of arms deliveries from the previous year (a fall of $874 million). However, the total value of such arms deliveries worldwide in 2001-2004 ($131.2 billion) was substantially lower in the value of arms deliveries by all suppliers worldwide from 1997-2000 ($181.2 billion, a decline of over $50 billion). Figure 2, Charts 7 and 8.

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Developing nations from 2001-2004 accounted for 63.2 percent of the value of all international arms deliveries. In the earlier period, 1997-2000, developing nations accounted for 71.8 percent of the value of all arms deliveries worldwide. In 2004, developing nations collectively accounted for 64.6 percent of the value of all international arms deliveries. Figure and Table A.

The decline in weapons orders worldwide since 000 has been notable. Global arms agreement values have fallen from $42.1 billion in 2000 to about $37 billion in 2004. Were it not for the conclusion of a few very large orders in 2004, the total for that year likely would have been lower than the previous year. Some of the major weapons orders placed in 2004 were deferred purchases that were finally concluded after years of negotiations. It has increasingly become the practice of developed nations in recent years to seek to protect important elements of their national military industrial bases by limiting arms purchases from other developed nations. They have placed greater emphasis on joint production of various weapons systems with other developed nations as a more effective way to preserve a domestic weapons production capability, while sharing the costs of new weapons development, both for their own militaries, as well as for export. Some leading weapons producers have been forced to consolidate sectors of their domestic defense industry in the face of intense foreign competition, while other supplying nations have chosen to manufacture items for niche arms markets where their specialized production capabilities provide them with important advantages in the evolving international arms marketplace.

Because the arms market in recent years has become so intensely competitive, supplying states have come to emphasize sales efforts directed toward regions and nations where individual suppliers have had competitive advantages resulting from well established military support relationships with the prospective customers. The potential has developed within Europe for arms sales to nations that have recently become members of the North Atlantic Treaty Organization (NATO), that are modernizing their basic force structures, and that are replacing obsolete systems. There are inherent limitations on these intra-European sales due to the smaller defense budgets of many of the prospective client states. Yet creative seller financing options, as well as the use of co-assembly, coproduction, and countertrade, to offset costs to the purchasers, has resulted in some contracts being signed. Competition seems likely between the United States and European countries or consortia over the prospective arms contracts within the European region in the years ahead. Such sales have the potential to compensate for lost contracts resulting from reduced demand for weapons from other clients in the developing world.

More recently, various developing nations have reduced their weapons purchases primarily due to their lack of sufficient funds to pay for such weaponry. Even those prospective arms purchasers in the developing world with significant financial assets continue to exercise caution before embarking upon new and costly weapons procurement programs. The spike in the price of oil, while a boon to the oil producing nations, has caused economic difficulties for many consuming states. The unsettled state of the world economy has influenced a number of developing nations to upgrade existing weapons systems in their inventories, while limiting their purchases of newer ones. There has also been a notable reduction in new arms agreements by a number of nations in the developing world, due to the substantial arms purchases these countries made in the 1990s. Several of them are curtailing their purchases while they absorb and integrate previously acquired weapons systems into their force structures.

Presently, there appear to be fewer large weapons purchases being made by developing nations in the Near East, while a relatively larger increase in purchases are being made by developing nations in Asia, lead principally by China and India. While these apparent trends are subject to abrupt change based on the strength of either the international or regional economies, the strength of individual economies in various nations in the developing world continues to be a very significant factor in the timing of their arms purchasing decisions.

Some nations in Latin America, and, to a much lesser extent, in Africa, have expressed interest in modernizing important sectors of their military forces, yet many states in these regions also continue to be constrained by their limited financial resources. The limited availability of seller-supplied credit and financing seems likely to continue to be a factor that inhibits conclusion of major weapons deals in these regions of the developing world.

General Trends in Arms Transfers to Developing Nations

The value of all arms transfer agreements with developing nations in 2004 was nearly $21.8 billion, a significant increase over the $15.1 billion total in 2003. This was the highest annual total, in real terms, since 2000. In 2004, the value of all arms deliveries to developing nations (about $22.5 billion) was a clear increase from the value of 00 deliveries (nearly $20.8 billion), and the highest total since 2000. Charts 1, 7, 8, Figure 1, 2, Tables 1A and 2A.

Recently, from 2001-2004, the United States and Russia have dominated the arms market in the developing world, with the United States ranking first each of the last four years in the value of arms transfer agreements. From 2001-2004, the United States made $29.8 billion in arms transfer agreements with developing nations, 9.9 percent of all such agreements. Russia, the second leading supplier during this period, made $21.7 billion in arms transfer agreements or 29.1 percent. The United Kingdom (U.K.), the third leading supplier, from 2001-2004 made about $4.2 billion or 5.6 percent of all such agreements with developing nations during these years. In the earlier period (1997 through 2000) the United States ranked first with $34.6 billion in arms transfer agreements with developing nations or 36.8 percent; Russia made $17.3 billion in arms transfer agreements during this period or 18.4 percent. France made $11.1 billion in agreements or 11.8 percent. Table 1A.

During the years from 1997-2004, most arms transfers to developing nations were made by two to three major suppliers in any given year. The United States has ranked first among these suppliers every year during this eight year period. Russia has been a strong competitor for the lead in arms transfer agreements with developing nations, ranking second every year from 1999 through 2004. Despite the larger traditional client base for armaments held by other Major West European suppliers, Russia's successes in securing new arms orders suggests that despite the traditional marketing advantage held by Major West European competitors, Russia is likely to continue to rank higher in the value of new arms agreements than other key European arms suppliers, for the near term. However, Russia's largest value arms transfer agreements continue to be with two countries, China and India. Russian success in the arms trade with developed nations in the future will depend on its ability to expand its client base. To this end, Russia has sought to expand its prospects in Southeast Asia. The Russian government has also stated that it has adopted more flexible payment arrangements for its prospective customers in the developing world, and is seeking to enhance the quality of its follow-on support services to make Russian products more attractive and competitive.

European arms suppliers such as France, the United Kingdom and Germany occasionally conclude notably large orders with developing countries, based on either long-term supply relationships or their having specialized weapons systems they can readily provide. Nevertheless, the United States continues to appear best equipped to secure new arms agreements with developing nations that are able to afford major new arms purchases. Prospects for purchases of new and highly expensive weapons by many developing countries seem likely to be limited in the near term, given the unsettled state of the international economy, and the paucity of funds for such undertakings in the procurement budgets of several developing nations. Consequently, the overall level of the arms trade with developing nations, which has been generally declining in the years since 2000, despite the notable level of agreements in 2004, is likely to remain relatively static or continue to decline in the near term, even though a few wealthier developing nations may make some significant arms purchases on occasion.

Arms suppliers in the tier below the United States and Russia, such as China, other European, and non-European suppliers, have participated in the arms trade with developing nations at a much lower level. However, these suppliers are capable, on occasion, of making an arms deal of significance. Most of their annual arms transfer agreements values totals during 1997-2004 have been relatively low, and are based upon generally smaller transactions of less sophisticated military equipment. It is unlikely that most of these countries will be able to rise to the status of a major supplier of advanced weaponry on a consistent basis. Tables A, F, G, A, F and G.

United States

In 2004, the total value in real terms of United States arms transfer agreements with developing nations rose to nearly $6.9 billion from $6.5 billion in 2003. The U.S. share of the value of all such agreements was 31.6 percent in 2004, down from a 43.1 percent share in 2004. Charts 1, 3 and 4, Figure 1, Tables 1A and 1B.

In 2004, the value of U.S. arms transfer agreements with developing nations was primarily attributable to a number of purchases by a wide variety of U.S. clients in the Near East and in Asia, instead of a couple of very expensive contracts with one or two countries. These arms agreement totals illustrate the U.S. advantage of having well established defense support arrangements with weapons purchasers worldwide.

U.S. agreements with all of its clients in 2004 include not only sales of major weapons systems, but also the upgrading of systems previously provided. The U.S. totals also include agreements for a wide variety of spare parts, ammunition, ordinance, training, and support services which, in the aggregate, have significant value. Among major weapons systems agreements the United States concluded in 2004 with developing nations were: with Egypt for three Fast Missile Craft, and associated weapons for $536 million; with Taiwan for two UHF long-range early warning radars for $436 million; with Brazil for 10 UH-60L Black Hawk helicopters for $183 million; with Egypt for 100 High Mobility Multi-purpose Wheeled vehicles for $105 million; with Egypt for the upgrading of four Chinook helicopters to the CH47D configuration for $103 million; with Israel for 6 AH-64D Apache Longbow helicopters for $67 million; with Oman for 1 AN/AAQ-24 (V) NEMESIS Countermeasures system; and with Pakistan for Cobra combat helicopter. The United States also concluded agreements for the sale of various missile systems to nations in both the Near East and in Asia.

It must be emphasized that the sale of munitions, upgrades to existing systems, spare parts, training and support services to developing nations worldwide account for a very substantial portion of the total value of U.S. arms transfer agreements. A large number of countries in both the developing and developed world have, over decades, acquired and continue to utilize a wide range of American weapons systems, and have a continuing requirement to support, modify, and replace them.

Russia

The total value of Russia's arms transfer agreements with developing nations in 2004 was $5.9 billion, a notable increase from $4.3 billion in 2003, placing a strong second in such agreements with the developing world. Russia's share of all developing world arms transfer agreements decreased slightly, falling from 28.1 percent in 2003 to 27.1 percent in 2004. Charts 1, 3 and 4 Figure 1, and Tables 1A, 1B and 1G.

Russian arms transfer agreements totals with developing nations have been notable during the last four years. During the 2001-2004 period, Russia ranked second among all suppliers to developing countries, making $21.7 billion in agreements (in constant 2004 dollars). Russia's status as the second leading supplier of arms to developing nations stems from an increasingly successful effort to overcome the significant economic and political problems associated with the dissolution of the former Soviet Union. The traditional arms clients of the former Soviet Union were generally less wealthy developing countries valued as much for their political support in the Cold War, as for their desire for Soviet weaponry. Many of these traditional Soviet client states received substantial military aid grants and significant discounts on their arms purchases. After the breakup of the Soviet Union in December 1991 these practices were greatly curtailed. The Russia that emerged in 1991 consistently placed a premium on obtaining hard currency for the weapons it sold. Faced with stiff competition from Western arms suppliers in the 1990s, Russia gradually adapted its selling practices in an effort to regain and sustain an important share of the developing world arms market.

Russian leaders have made important efforts, in recent years, to provide more flexible and creative financing and payment options for prospective arms clients. It has also agreed to engage in countertrade, offsets, debt-swapping, and, in key cases, to make significant licensed production agreements in order to sell its weapons. The willingness to license production has been a central element in several cases involving Russia's principal arms clients, China and India. Russia's efforts to expand its arms customer base have been met with mixed results. In the early 1990s, Russia developed a supply relationship with Iran, providing that country with MiG-29 fighter aircraft, Su-24 fighter-bombers, T-72 Main Battle Tanks, and Kilo-class attack submarines. Although new Russian sales to Iran were suspended for a period from 1995-2000 in accordance with an agreement with the United States, Russia now asserts its option to sell arms to Iran should it choose to do so. Despite discussions held between Russia and Iran on prospective future arms purchases, there has not been, as of this date, major new Iranian procurement from Russia of advanced weapons systems, comparable to the types and quantities obtained in the early 1990s. Russia's arms sales efforts, apart from those with China and India, seem focused on Southeast Asia, where it has had some success in securing arms agreements with Malaysia, Vietnam and Indonesia, although recurring financial problems of some clients in this region have hampered significant growth in Russian sales to them. Similarly, Russian combat fighter aircraft sales have been made in recent years to Algeria and Yemen. Elsewhere in the developing world Russian military equipment still holds attractions because it ranges from the most basic to the highly advanced, and can be less expensive than similar arms available from other major suppliers.

Russia continues to confront a significant obstacle in breaking into arms markets traditionally dominated by Western suppliers, namely, its perceived inability to provide consistent high-quality follow-on support, spare parts, and training for the weapons systems it sells. There is an almost ingrained reluctance on the part of many developing nations to purchase advanced armaments from a supplier like Russia that is still engaged in reorganization and rationalization of its defense production base, when more stable, well-known, and established sources of such weapons exist. Aerospace systems continue to be Russia's strong suit in arms sales, but in the absence of major new research and development efforts in this and other military equipment areas future Russian foreign arms sales may be more difficult to make. Some military research and development programs do exist in Russia, but the other major arms suppliers in the West are currently in the process of developing and producing weaponry much more advanced than those in existing Russian programs. Nonetheless, Russia continues to have very significant on-going arms transfer programs involving China and India, which should provide it with sustained business during this decade. On the basis of agreements concluded starting in the mid-1990s, Russia has sold major combat fighter aircraft, and main battle tanks to India, and has provided other major weapons systems though lease or licensed production. In 2004, Russia concluded a major agreement with India for the transfer, following modernization, of the aircraft carrier Admiral Gorshkov, together with 12 MiG-29K fighters, four MiG-29KUB training jets, as well as six to eight Ka-28 Helix-A and Ka-31 Helix-B helicopters for about $1.5 billion. China, however, continues to be a central client for Russia's arms export program, particularly in aircraft and naval systems. Since 1996, Russia has sold China Su-27 fighter aircraft and agreed to licensed production of them. It has also sold the Chinese quantities of Su-30 multi-role fighter aircraft, Sovremenny-class destroyers equipped with Sunburn anti-ship missiles, and Kiloclass Project submarines. Russia has also sold the Chinese a variety of other weapons systems and missiles. In 2004, Russia sold China eight battalions of S-300PMU-2 Air Defense Missile Systems for nearly $1 billion. It also concluded a $900 million agreement with China for engines for the Chinese J-10 fighter aircraft.

China

China was an important arms supplier to certain developing nations in the 9 0s, primarily through arms agreements with both combatants in the Iran and Iraq war. From 2001-2004, the value of China's arms transfer agreements with developing nations has averaged about $600 million annually, while fluctuating considerably from year to year. During the period of this report, the value of China's arms transfer agreements with developing nations peaked in 1999 at $2.9 billion. Its sales figures that year resulted generally from several smaller valued weapons deals in Asia, Africa, and the Near East, rather than one or two especially large sales of major weapons systems. Similar arms deals with small scale purchasers in these regions continue. In 2004, China's arms transfer agreements total was $600 million, consistent with its average total in most recent years. For most of the mid-1990s on, China's principal focus has not been on selling arms but on advancing a significant military procurement program, aimed at modernizing its own military forces, with Russia serving as its principal supplier of advanced combat aircraft, submarines, surface combatants, and air defense systems. Tables A, G, 1H and Chart 3.

Few clients for weapons with financial resources have sought to purchase Chinese military equipment during the eight year period of this report, because much is less advanced and sophisticated than weaponry available from Western suppliers or Russia. China does not appear likely to be a major supplier of conventional weapons in the international arms market in the foreseeable future. Its likely clients are states in Asia and Africa seeking quantities of small arms and light weapons, rather than major combat systems. At the same time, China is an important source of missiles in the developing world arms market. China supplied Silkworm anti-ship missiles to Iran. Credible reports persist in various publications that China has sold surface-to-surface missiles to Pakistan, a long-standing client. Iran and North Korea have also reportedly received Chinese missile technology. Credible reports of this nature raise important questions about China's stated commitment to the restrictions on missile transfers set out in the Missile Technology Control Regime (MTCR), including its pledge not to assist others in building missiles that could deliver nuclear weapons. Given its continuing need for hard currency, and the fact that it has some military products, particularly missiles that some developing countries would like to acquire, China can present an important obstacle to efforts to stem proliferation of advanced missile systems to some areas of the developing world where political and military tensions are significant, and where some nations are seeking to develop asymmetric military capabilities.

Major West European Suppliers

The four major West European suppliers:

* France;

* United Kingdom;

* Germany; and

* Italy

As a group, registered a significant increase in their collective share of all arms transfer agreements with developing nations between 2003 and 2004. This group's share rose from 5.5 percent in 2003 to 22 percent in 2004. The collective value of this group's arms transfer agreements with developing nations in 2004 was $4.8 billion compared with a total of $830 million in 2003. Of these four nations, the United Kingdom was the leading supplier with $3.2 billion in agreements in 2004, a substantial increase from essentially no agreements in 2003. An important portion of the United Kingdom's total in 2004 was attributable to a $1.8 billion agreement with India for Hawk advanced jet trainers, and a large agreement totaling in excess of $1 billion with Saudi Arabia under the Al Yamamah military procurement arrangement. France increased its agreements total to $1 billion in 2004 from $519 million in 2003, aided by a contract to provide support for Saudi Arabia's Crotale air defense systems, and Shahine ground-to-air missiles for about $410 million. Italy increased its arms transfer agreements with the developing world from $311 million in 2003 to $600 million in 2004. Germany registered effectively no new developing world arms orders in 2004. Charts 3, 4, Tables 1A and 1B.

The four major West European suppliers collectively held a percent share of all arms transfer agreements with developing nations during 2004. In the period after the Persian Gulf war, the major West European suppliers generally maintained a notable share of arms transfer agreements. But more recently this share has declined, despite the large collective values total for the four nations in 2004. During the 2001-2004 period, they collectively held 11 percent of all arms transfer agreements with developing nations ($8.2 billion). Individual suppliers within the major West European group have had notable years for arms agreements, especially France in 1998 and 2000 ($6.3 billion and $2.5 billion respectively). The United Kingdom also had a large agreement year in 2004 ($3.2 billion), and at least $1.2 billion in agreements in 1997, 1998, and 1999. Germany concluded arms agreements totaling $1.7 billion in 1998, with its highest total at $2.3 billion in 1999. For each of these three nations, large agreement totals in one year have usually reflected the conclusion of very large arms contracts with one or more major purchasers in that particular year. Tables A and B.

Traditionally, Major West European suppliers have had their competitive position in weapons exports strengthened through strong government marketing support for their foreign arms sales. Since they can produce both advanced and basic air, ground, and naval weapons systems, the four major West European suppliers have competed successfully for arms sales contracts with developing nations against both the United States, which has tended to sell to several of the same clients, and with Russia, which has sold to nations not traditional customers of either the West Europeans or the U.S. The demand for U.S. weapons in the global arms marketplace, from a large established client base, has created a more difficult environment for individual West European suppliers to secure large new contracts with developing nations on a sustained basis. Furthermore, with the decline in demand by key Near East countries for major weapons purchases, the levels of new arms agreements by Major West European suppliers have fallen off notably.

As the result of these factors, some of these suppliers have begun to phase out production of certain types of weapons systems, and have increasingly engaged in joint production ventures with other key European weapons suppliers or even client countries in an effort to sustain major sectors of their individual defense industrial bases, even if a substantial portion of the weapons produced are for their own armed forces. The Eurofighter project is one example; Eurocopter is another. Some European suppliers have also adopted the strategy of cooperating in defense production ventures with the United States such as the Joint Strike Fighter (JSF), to both meet their own requirements for advanced combat aircraft, and to share in profits resulting from future sales of this aircraft.

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Regional Arms Transfer Agreements

A major stimulus to new weapons procurements in the Near East region was the Persian Gulf crisis of August 1990 through February 1991. This crisis, culminating in a war to expel Iraq from Kuwait, created new demands by key purchasers such as Saudi Arabia, Kuwait, the United Arab Emirates, and other members of the Gulf Cooperation Council (GCC), for a variety of advanced weapons systems. Egypt and Israel continued their modernization and increased their weapons purchases from the United States. The Gulf states' arms purchase demands were not only a response to Iraq's aggression against Kuwait, but a reflection of concerns regarding perceived threats from a potentially hostile Iran. It remains to be seen whether Gulf states' assessments of the future threat environment in the post-Saddam Hussein era in Iraq will lead to long-term declines in their arms purchases.

In recent years, the position of Saudi Arabia as principal arms purchaser in the Persian Gulf has notably leveled off. In the period from 1997-2000, Saudi Arabia's total arms agreements were valued at $4.9 billion. For the period from 2001-2004, Saudi Arabia's total arms agreements were $5.6 billion. In Asia, efforts in several developing nations have been focused on upgrading and modernizing defense forces, and this has led to important new conventional weapons sales in that region. Since the mid-1990s, Russia has become the principal supplier of advanced conventional weaponry to China selling fighters, submarines, destroyers, and missiles while maintaining its position as principal arms supplier to India. Russia has also made progress in expanding its client base in Asia, receiving aircraft orders from Malaysia, Vietnam, and Indonesia. India, has also expanded its weapons supplier base, purchasing in 2004 from Israel, the Phalcon early warning defense system aircraft for $1.1 billion. The data on regional arms transfer agreements from 1997-2004 continue to reflect that Near East and Asian nations are the primary sources of orders for conventional weaponry in the developing world.

Near East

The Near East has historically been the largest arms market in the developing world. In 1997 through 2000, it accounted for 49.2 percent of the total value of all developing nations arms transfer agreements (about $37 billion in current dollars), ranking it first ahead of Asia which ranked second with 41.2 percent of these agreements. However, during 2001-2004, the Asia region accounted for 49.2 percent of all such agreements ($34.9 billion in current dollars), placing it first in arms agreements with the developing world. The Near East region ranked second with $28.5 billion in agreements. Tables 1C and 1D.

The United States dominated arms transfer agreements with the Near East during the 1997 through 2000 period with 61.1 percent of their total value ($22.6 billion in current dollars). France was second during these years with 14.9 percent ($5.5 billion in current dollars). Recently, from 2001-2004, the United States accounted for 65.9 percent of arms agreements with this region ($18.8 billion in current dollars), while Russia accounted for 9.1 percent of the region's agreements ($2.6 billion in current dollars). Chart 5, Tables 1C and 1E.

Asia

Asia has historically been the second largest developing world arms market. Yet in 2001-2004, Asia ranked first, accounting for 49.2 percent of the total value of all arms transfer agreements with developing nations ($34.9 billion in current dollars).

In the earlier period, 1997-2000, the region accounted for 41.2 percent of all such agreements ($30.9 billion in current dollars), ranking second. Tables C and D In the earlier period (1997-2000), Russia ranked first in the value of arms transfer agreements with Asia with 36.9 percent ($11.4 billion in current dollars). The United States ranked second with 19.5 percent ($6 billion in current dollars). The major West European suppliers, as a group, made 24.9 percent of this region's agreements in 1997-2000. In the later period (2001-2004), Russia ranked first in Asian agreements with 48.1 percent ($16.8 billion in current dollars), primarily due to major combat aircraft, and naval system sales to India and China. The United States ranked second with 21.3 percent ($7.4 billion in current dollars). The major West European suppliers, as a group, made 9.7 percent of this region's agreements in 2001-2004. Chart 6 and Table 1E.

Leading Developing Nations Arms Purchasers

India was the leading developing world arms purchaser from 1997 through 2004, making arms transfer agreements totaling $15.7 billion during these years (in current dollars). In the 1997 through 2000 period, the United Arab Emirates (UAE) ranked first in arms transfer agreements at $13.3 billion (in current dollars). In 2001-2004, however, China ranked first in arms transfer agreements, with a dramatic increase to $10.4 billion from $4.9 billion in the earlier 1997-2000 period (in current dollars). This increase reflects the military modernization effort by China, beginning in the mid-1990s, and based primarily on major arms agreements with Russia. The total value of all arms transfer agreements with developing nations from 1997 through 2004 was $152.2 billion in current dollars. Thus India alone was responsible for 10.3 percent of all developing world arms transfer agreements during these eight years. In the most recent period, 00 through 2004, China made $10.4 billion in arms transfer agreements (in current dollars). This total constituted 14.6 percent of all arm transfer agreements with developing nations during these four years ($71.3 billion in current dollars). India ranked second in arms transfer agreements during 2001 through 2004 with $7.9 billion (in current dollars), or 11.1 percent of the value of all developing world arms transfer agreements. Tables 1, 1H, 1I and 1J.

The values of the arms transfer agreements of the top ten developing world recipient nations in both the 1997-2000 and 2001-2004 periods accounted for the largest portion of the total developing nations arms market. During 1997-2000, the top ten recipients collectively accounted for 71.3 percent of all developing world arms transfer agreements. During 2001-2004, the top ten recipients collectively accounted for 67.9 percent of all such agreements. Arms transfer agreements with the top ten developing world recipients, as a group, totaled $16.8 billion in 2004 or 77.1 percent of all arms transfer agreements with developing nations in that year. This reflects the continued concentration of major arms purchases by developing nations within a few countries. Tables , I and J.

India ranked first among all developing world recipients in the value of arms transfer agreements in 2004, concluding $5.7 billion in such agreements. Saudi Arabia ranked second in agreements in 2004 at $2.9 billion. China ranked third with $2.2 billion in agreements. Five of these top ten recipients were in the Asian region, five were in the Near East. Table 1J

The United Arab Emirates was the leading recipient of arms deliveries among developing world recipients in 2004, receiving $3.6 billion in such deliveries. Saudi Arabia ranked second in arms deliveries in 2004 with $3.2 billion. China ranked third with $2.7 billion. Table 2J

Arms deliveries to the top ten developing nation recipients, as a group, were valued at $17.7 billion, or 78.8 percent of all arms deliveries to developing nations in 2004. Five of these top ten recipients were in Asia; four were in the Near East; one was in Africa. Tables and J

Weapons Types Recently Delivered to Near East Nations

Regional weapons delivery data reflect the diverse sources of supply of conventional weaponry available to developing nations. Even though the United States, Russia, and the four major West European suppliers dominate in the delivery of the fourteen classes of weapons examined, it is also evident that the other European suppliers and some non-European suppliers, including China, are capable of being leading suppliers of selected types of conventional armaments to developing nations.

Weapons deliveries to the Near East, historically the largest purchasing region in the developing world, reflect the substantial quantities and types delivered by both major and lesser suppliers. The following is an illustrative summary of weapons deliveries to this region for the period 2001-2004 from Table (see original report to view Table):

United States

* 401 tanks and self-propelled guns

* 36 APCs and armored cars

* 2 major surface combatants

* 4 minor surface combatants

* 31 supersonic combat aircraft

* 12 helicopters

* 347 surface-to-air missiles

* 122 anti-ship missiles

Russia

* 10 tanks and self-propelled guns

* 190 APCs and armored cars

* 30 supersonic combat aircraft

* 60 helicopters

* 1,000 surface-to-air missiles

China

* 20 Artillery pieces

* 40 APCs and armored cars

* 5 minor surface combatants

* 70 anti-ship missiles

Major West European Suppliers

* 300 tanks and self-propelled guns

* 70 artillery pieces

* 30 APCs and armored cars

* 5 major surface combatants

* 26 minor surface combatants

* 5 guided missile boats

* 30 supersonic combat aircraft

* 20 helicopters

All Other European Suppliers

* 270 tanks and self-propelled guns

* 130 APCs and armored cars

* 1 major surface combatant

* 28 minor surface combatants

* 10 supersonic combat aircraft

* 540 surface-to-air missiles

All Other Suppliers

* 270 APCs and armored cars

* 80 minor surface combatants

* 20 helicopters

* 40 surface-to-surface missiles

* 20 anti-ship missiles

Large numbers of major combat systems were delivered to the Near East region from 2001-2004, specifically, tanks and self-propelled guns, armored vehicles, major and minor surface combatants, supersonic combat aircraft, helicopters, air defense and anti-ship missiles. The United States and Russia made significant deliveries of supersonic combat aircraft and anti-ship missiles to the region. The United States, Russia, and European suppliers in general were principal suppliers of tanks and self-propelled guns, APCs and armored cars, surface-to-air missiles, as well as helicopters. Three of these weapons categories, supersonic combat aircraft, helicopters, and tanks and self-propelled guns are especially costly and are an important portion of the dollar values of arms deliveries by the United States, Russia, and European suppliers to the Near East region during the 00 through 2004 period.

The cost of naval combatants is also generally high, and suppliers of such systems during this period had their delivery value totals notably increased due to these transfers. Some of the less expensive weapons systems delivered to the Near East are still deadly and can create important security threats within the region. In particular, from 2001-2004, the United States delivered 122 anti-ship missiles to the Near East region while China delivered 70. The United States delivered two major surface combatants and four minor surface combatants to the Near East, while the major West European suppliers collectively delivered five guided missile boats, 5 major surface combatants, and 26 minor surface combatants. Other non-European suppliers delivered 80 minor surface combatants, as well as 40 surface-to-surface missiles, a weapons category not delivered by any of the other major weapons suppliers during this period to any region.

United States Commercial Arms Exports

The United States commercial deliveries data set out below in this report are included in the main data tables for deliveries worldwide and for deliveries to developing nations collectively. They are presented separately here to provide an indicator of their overall magnitude in the U.S. aggregate deliveries totals to the world and to all developing nations. The United States is the only major arms supplier that has two distinct systems for the export of weapons: the government-to-government foreign military sales (FMS) system, and the licensed commercial export system. It should be noted that data maintained on U.S. commercial sales agreements and deliveries are incomplete, and are not collected or revised on an on-going basis, making them significantly less precise than those for the U.S. FMS program which accounts for the overwhelming portion of U.S. conventional arms transfer agreements and deliveries involving weapons systems. There are no official compilations of commercial agreement data comparable to that for the FMS program maintained on an annual basis. Once an exporter receives from the Department of State a commercial license authorization to sell which is valid for four years there is no current requirement that the exporter provide to the Department of State, on a systematic and on-going basis, comprehensive details regarding any sales contract that results from the license approval, including if any such contract is reduced in scope or cancelled. Nor is the exporter required to report that no contract with the prospective buyer resulted. Annual commercial deliveries data are obtained from shipper's export documents and completed licenses returned from ports of exit by the U.S. Customs Service to the Office of Defense Trade Controls (PM/DTC) of the Department of State, which makes the final compilation of such data. This process for obtaining commercial deliveries data is much less systematic and much less timely than that taken by the Department of Defense for government-to-government FMS transactions. Recently, efforts have been initiated by the U.S. government to improve the timeliness and quality of U.S. commercial deliveries data. The values of U.S. commercial arms deliveries to all nations and deliveries to developing nations for fiscal years 1997-2004, in current dollars, according to the U.S. Department of State, were as follows:</p> <pre> Summary of Data Trends, 1997-2004 Fiscal Year Commercial Deliveries

Commercial Deliveries (Worldwide)

(to Developing Nations) 1997 $1,818,000,000

$1,141,000,000 1998 $2,045,000,000

$798,000,000 1999 $654,000,000 $323,000,000 2000 $478,000,000 $233,000,000

2001 $821,000,000 $588,000,000 2002

$341,000,000 $213,000,000 2003

$2,727,000,000 $342,000,000 2004 $7,618,000,000 $2,625,000,000 </pre> <p>Summary of Data Trends, 1997-2004

Tables 1 through 1J present data on arms transfer agreements with developing nations by major suppliers from 1997-2004. These data show the most recent trends in arms contract activity by major suppliers. Delivery data, which reflect implementation of sales decisions taken earlier, are shown in Tables 2 through 2J. These data sets reflect the comparative order of magnitude of arms transactions by arms suppliers with recipient nations expressed in constant dollar terms, unless otherwise noted.

What follows is a detailed summary of data trends from the tables in the report. The summary statements also reference tables and/or charts pertinent to the point(s) noted. Where graphic representations of some major points are made in individual charts, their underlying data are taken from the pertinent tables of this report.

Total Developing Nations Arms Transfer Agreement Values

Table shows the annual current dollar values of arms transfer agreements with developing nations. Since these figures do not allow for the effects of inflation, they are, by themselves, of somewhat limited use. They provide, however, the data from which Table A (constant dollars) and Table 1B (supplier percentages) are derived. Some of the more noteworthy facts reflected by these data are summarized below.

* The value of all arms transfer agreements with developing nations in 2004 was $21.8 billion. This was a substantial increase over 00 , and the highest total, in real terms, for arms transfer agreements with developing nations since 000. Tables 1 and 1A, Chart 1

* The total value of United States agreements with developing nations rose slightly from $6.5 billion in 2003 to $6.9 billion in 2004. The United States' share of all developing world arms transfer agreements fell significantly from 43.1 percent in 2003 to 31.6 percent in 2004. Tables 1A, 1B, and Chart 3.

* In 2004, the total value, in real terms, of Russian arms transfer agreements with developing nations increased notably from the previous year, rising from $4.3 billion in 2003 to $5.9 billion in 2004. The Russian share of all such agreements declined from 28.1 percent in 2003 to 27.1 percent in 2004. Charts 3, 4, and Tables 1A and 1B.

* The four major West European suppliers, as a group (France, United Kingdom, Germany, Italy), registered a significant increase in their collective share of all arms transfer agreements with developing nations between 2003 and 2004. This group's share rose dramatically from 5.5 percent in 2003 to 22 percent in 2004. The collective value of this group's arms transfer agreements with developing nations in 2004 was $4.8 billion compared with a total of $830 million in 2003. Tables 1A, 1B, Charts 3 and 4.

* The United Kingdom registered a substantial increase in its share of all arms transfer agreements with developing nations, rising from essentially nil in 2003 to 14.7 percent in 2004. The value of its agreements with developing nations rose dramatically from essentially nil in 2003 to $3.2 billion in 2004. Tables 1A and 1B

* In 2004, the United States ranked first in arms transfer agreements with developing nations at $6.9 billion. Russia ranked second at $5.9 billion. Charts 3 and 4, Tables 1A, 1B and 1G

Regional Arms Transfer Agreements, 1997-2004

Table 1C gives the values of arms transfer agreements between suppliers and individual regions of the developing world for the periods 1997-2000 and 2001-2004. These values are expressed in current U.S. dollars. (1) Table 1D, derived from Table 1C, gives the percentage distribution of each supplier's agreement values within the regions for the two time periods. Table 1E, also derived from Table 1C, illustrates what percentage share of each developing world region's total arms transfer agreements was held by specific suppliers during the years 1997-2000 and 2001-2004. Among the facts reflected in these tables are the following:

Near East

* The Near East has historically been the largest arms market in the developing world. In 1997-2000, it accounted for nearly 49.2 percent of the total value of all developing nations arms transfer agreements (about $37 billion in current dollars), ranking it first ahead of Asia which ranked second with 41.2 percent of these agreements. However, during 2001-2004, the Asia region accounted for 49.2 percent of all such agreements ($34.9 billion in current dollars), placing it first in arms agreements with the developing world. The Near East region ranked second with during 2001-2004 with $28.5 billion in agreements. Tables 1C and 1D

* The United States dominated arms transfer agreements with the Near East during the 1997-2000 period with 61.1 percent of their total value ($22.6 billion in current dollars). France was second during these years with 14.9 percent ($5.5 billion in current dollars). Recently, from 2001-2004, the United States accounted for 65.9 percent of arms agreements with this region ($18.8 billion in current dollars), while Russia accounted for 9.1 percent of the region's agreements ($2.6 billion in current dollars). Chart 5, Tables 1C and 1E.

* For the period 1997-2000, the United States concluded 75.5 percent of its developing world arms transfer agreements with the Near East. In 2001-2004, the U.S. concluded 66.2 percent of its agreements with this region. Table 1D.

* For the period 1997-2000, the four major West European suppliers collectively made 44 percent of their developing world arms transfer agreements with the Near East. In 2001-2004, the major West Europeans made 46.5 percent of their arms agreements with the Near East. Table D.

* For the period 1997-2000, France concluded 61.8 percent of its developing world arms transfer agreements with the Near East. In 2001-2004, France made 59.3 percent of its agreements with the Near East. Table 1D

* For the period 1997-2000, the United Kingdom concluded 24 percent of its developing world arms transfer agreements with the Near East. In 2001-2004, the United Kingdom made 45 percent of its agreements with the Near East. Table D

* For the period 1997-2000, China concluded 34.1 percent of its developing world arms transfer agreements with the Near East. In 2001-2004, China made 34.8 percent of its agreements with the Near East. Table 1D

* For the period 1997-2000, Russia concluded 15 percent of its developing world arms transfer agreements with the Near East. In 2001-2004, Russia made 12.7 percent of its agreements with the Near East. Table 1D

* In the earlier period (1997-2000), the United States ranked first in arms transfer agreements with the Near East with 61.1 percent. France ranked second with 4.9 percent. Russia ranked third with 5.9 percent. The major West European suppliers, as a group, made 17.8 percent of this region's agreements in 1997-2000. In the later period (2001-2004), the United States again ranked first in Near East agreements with 65.9 percent. Russia ranked second with 9.1 percent. The major West European suppliers, as a group, made 14 percent of this region's agreements in 2001-2004. Table 1E and Chart 5.

Asia

* Asia has historically been the second largest arms market in the developing world. Yet in 2001-2004, Asia ranked first, with 49.2 percent of the total value of all arms transfer agreements with developing nations ($34.9 billion in current dollars). In the earlier period, 1997-2000, the region accounted for 41.2 percent of all such agreements ($30.9 billion in current dollars), ranking second. Tables 1C and 1D.

* In the earlier period (1997-2000), Russia ranked first in the value of arms transfer agreements with Asia with 36.9 percent ($11.4 billion in current dollars). The United States ranked second with 19.5 percent ($6 billion in current dollars). The major West European suppliers, as a group, made 24.9 percent of this region's agreements in 1997-2000. In the later period (2001-2004), Russia ranked first in Asian agreements with 48.1 percent ($16.8 billion in current dollars), primarily due to major combat aircraft and naval craft sales to India and China. The United States ranked second with 21.3 percent ($7.4 billion in current dollars). The major West European suppliers, as a group, made 9.7 percent of this region's agreements in 2001-2004. Chart 6 and Table 1E.

Latin America

* In the earlier period, 1997-2000, the United States ranked first in arms transfer agreements with Latin America with 36.7 percent. France ranked second with 12.1 percent. The major West European suppliers, as a group, made 15.1 percent of this region's agreements in 1997-2000. In the later period, 2001-2004, the United States ranked first with 42.5 percent. Russia ranked second with 10.7 percent. All other non-European suppliers collectively made 25.6 percent of the region's agreements in 2001-2004. Latin America registered a significant increase in the total value of its arms transfer agreements from 1997-2000 to 20012004 rising from $3.3 billion in the earlier period to $4.7 billion in the latter. Tables C and E.

Africa

* In the earlier period, 1997-2000, Russia ranked first in agreements with Africa with 23.2 percent ($900 million in current dollars). China was second with 15.5 percent. The non-major European suppliers, as a group, made 33.5 percent of the region's agreements in 1997-2000. The United States made 2 percent. In the later period, 2001-2004, Russia and Germany tied for first in agreements with 20.3 percent each ($600 million each). China ranked third with 6.8 percent ($200 million). The major West European suppliers, as a group, made 27 percent of this region's agreements in 2001-2004 ($800 million). All other European suppliers collectively made 23.6 percent ($700 million). The United States made 5.4 percent. Africa registered a notable decline in the total value of its arms transfer agreements from 1997-2000 to 2001-2004, falling from $3.9 billion in the earlier period to about $3 billion in the latter (in current dollars). This decline is attributable to the fact that arms orders of South Africa, as part of its new defense procurement program, were placed during the earlier time period. Tables 1C and 1E.

Arms Transfer Agreements With Developing Nations, 1997-2004: Leading Suppliers Compared

Table 1F gives the values of arms transfer agreements with the developing nations from 1997-2004 by the top eleven suppliers. The table ranks these suppliers on the basis of the total current dollar values of their respective agreements with the developing world for each of three periods including; 1997-2000, 2001-2004 and 1997-2004. Among the facts reflected in this table are the following:

* The United States ranked first among all suppliers to developing nations in the value of arms transfer agreements from 2001-2004 ($28.4 billion), and first for the entire period from 1997-2004 ($58.3 billion).

* Russia ranked second among all suppliers to developing nations in the value of arms transfer agreements from 2001-2004 ($20.7 billion), and second from 1997-2004 ($35.6 billion).

* The United Kingdom ranked third among all suppliers to developing nations in the value of arms transfer agreements from 2001-2004 ($4.1 billion), and fourth from 1997-2004 ($7.2 billion).

* France ranked fourth among all suppliers to developing nations in the value of arms transfer agreements from 2001-2004 ($2.6 billion), and third from 1997-2004 ($12.1 billion).

* Israel ranked fifth among all suppliers to developing nations in the value of arms transfer agreements from 2001-2004 ($2.5 million), and seventh from 1997-2004 ($4.2 billion).

Arms Transfer Agreements With Developing Nations in 2004: Leading Suppliers Compared

Table 1G ranks and gives for 2004 the values of arms transfer agreements with developing nations of the top eleven suppliers in current U.S. dollars. Among the facts reflected in this table are the following:

* The United States, Russia, and the United Kingdom, the year's top three arms suppliers, ranked by the value of their arms transfer agreements, collectively made agreements in 2004 valued at nearly $16 billion, 73.4 percent of all arms transfer agreements made with developing nations by all suppliers ($21.8 billion).

* In 2004, the United States ranked first in arms transfer agreements with developing nations, making $6.9 billion in such agreements, or 31.6 percent of them.

* Russia ranked second and the United Kingdom third in arms transfer agreements with developing nations in 2004, making $5.9 billion and $3.2 billion in such agreements respectively.

* Israel ranked fourth in arms transfer agreements with developing nations in 2004, making $1.2 billion in such agreements, while France ranked fifth with $1 billion.

Arms Transfer Agreements With Near East 1997-2004: Suppliers And Recipients

Table 1H gives the values of arms transfer agreements with the Near East nations by suppliers or categories of suppliers for the periods 1997-2000 and 2001-2004. These values are expressed in current U.S. dollars. They are a subset of the data contained in Tables and 1C. Among the facts reflected by this table are the following:

* For the most recent period, 2001-2004, the principal purchasers of U.S. arms in the

Near East region, based on the value of agreements were:

* Egypt ($5.7 billion),

* Israel ($4.4 billion), and

* Saudi Arabia ($3.8 billion).

The principal purchasers of Russian arms were:

* Yemen($600 million), Iran ($400 million);

* Israel ($300 million);

* Egypt, Morocco, and Syria ($200 million each).

The principal purchasers of arms from China were

* Egypt ($300 million);

* Iran and Kuwait ($200 million each).

The principal purchasers of arms from the four major West European suppliers, as a group, were:

* Saudi Arabia ($1.7 billion);

* Oman ($1.2 billion), and

* United Arab Emirates ($500 million). The principal purchasers of arms from all other European suppliers collectively were

* United Arab Emirates ($400 million); and

* Egypt and Iraq ($200 million each).

The principal purchasers of arms from all other suppliers combined were Libya ($300 million), and Kuwait ($200 million).

* For the period from 2001-2004, Egypt made $6.5 billion in arms transfer agreements. The United States ($5.7 billion), was its largest supplier. Saudi Arabia made $5.6 billion in arms transfer agreements. Its major suppliers were the United States ($3.8 billion), and the four major West European suppliers ($1.7 billion). Israel made $4.8 billion in arms transfer agreements. Its principal supplier was the United States ($4.4 billion). Kuwait made $2.3 billion in arms transfer agreements. Its principal supplier was: the United States ($1.8 billion).

* The total value of arms transfer agreements by China with Iran fell from $600 million to $200 million during the periods from 1997-2000 to 2001-2004 respectively. The value of Russia's arms transfer agreements with Iran was $400 million in both periods.

* The value of arms transfer agreements by the United States with Saudi Arabia fell slightly from the 1997-2000 period to the 2001-2004 period, declining from $4.1 billion in the earlier period to $3.8 billion in the later period. Saudi Arabia still made 67.9 percent of all its arms transfer agreements with the United States during 2001-2004. Meanwhile, arms transfer agreements by the United Arab Emirates with all suppliers decreased significantly from 1997-2000 to 2001-2004, falling from $13.3 billion to $1.7 billion.

Arms Transfers to Developing Nations, 1997-2004: Agreements With Leading Recipients

Table I gives the values of arms transfer agreements made by the top ten recipients of arms in the developing world from 1997-2004 with all suppliers collectively. The table ranks recipients on the basis of the total current dollar values of their respective agreements with all suppliers for each of three periods; 1997-2000, 2001-2004 and 1997-2004. Among the facts reflected in this table are the following:

* India was the leading developing world arms purchaser from 1997-2004, making arms transfer agreements totaling $15.7 billion during these years (in current dollars). In the 1997-2000 period, the United Arab Emirates ranked first in arms transfer agreements at $13.3 billion (in current dollars). In 2001-2004, however, China ranked first in arms transfer agreements, with a dramatic increase to $10.4 billion from $4.9 billion in the earlier period (in current dollars). This increase reflects the military modernization program of China, beginning in the mid-1990s, and based primarily on major arms agreements with Russia. The total value of all arms transfer agreements with developing nations from 1997-2004 was $152.2 billion in current dollars. Thus India alone was responsible for 10.3 percent of all developing world arms transfer agreements during these eight years. In the most recent period, 2001-2004, China made $10.4 billion in arms transfer agreements (in current dollars). This total constituted 4. percent of all arm transfer agreements with developing nations during 2001-2004, which totaled $71.3 billion. India ranked second in arms transfer agreements during 2001-2004 with $7.9 billion (in current dollars), or 11.1 percent of the value of all developing world arms transfer agreements. Tables , H, I and J.

* During 1997-2000, the top ten recipients collectively accounted for 71.3 percent of all developing world arms transfer agreements. During 2001-2004, the top ten recipients collectively accounted for 67.9 percent of all such agreements. Tables 1 and 1I.

Arms Transfers to Developing Nations in 2004: Agreements With Leading Recipients

Table 1J names the top ten developing world recipients of arms transfer agreements in 2004. The table ranks these recipients on the basis of the total current dollar values of their respective agreements with all suppliers in 2004. Among the facts reflected in this table are the following:

* India ranked first among all developing nations recipients in the value of arms transfer agreements in 2004, concluding $5.7 billion in such agreements. Saudi Arabia ranked second with $2.9 billion. China ranked third with $2.2 billion.

* Five of the top ten developing world recipients of arms transfer agreements in 2004 were in Asia. Five were in the Near East.

* Arms transfer agreements with the top ten developing world recipients, as a group, in 2004 totaled $16.8 billion or 77.1 percent of all such agreements with the developing world, reflecting a continuing concentration of developing world arms purchases among a few nations. Tables 1 and 1J.

Developing Nations Arms Delivery Values

Table 2 shows the annual current dollar values of arms deliveries (items actually transferred) to developing nations by major suppliers from 1997-2004. The utility of these particular data is that they reflect transfers that have occurred. They provide the data from which Table 2A (constant dollars) and Table 2B (supplier percentages) are derived. Some of the more notable facts illustrated by these data are summarized below.

* In 2004 the value of all arms deliveries to developing nations ($22.5 billion) was a notable increase in deliveries values from the previous year, ($20.8 billion in constant 2004 dollars). Charts 7, 8, and Table 2A.

* The U.S. share of all deliveries to developing nations in 2004 was 42.6 percent, a substantial increase from 30.1 percent in 2003. In 2004, the United States, for the eighth year in a row, ranked first in the value of arms deliveries to developing nations ($9.6 billion) (in constant 2004 dollars). The second leading supplier in 2004 was Russia at $4.5 billion. Russia's share of all deliveries to developing nations in 2004 was 20 percent, essentially unchanged from 2004. France, the third leading supplier in 2004, made $4.2 billion in deliveries. France's share of all arms deliveries to developing nations in 2004 was 18.7 percent, up from 12 percent in 2003. The share of major West European suppliers deliveries to developing nations in 2004 was 27.2 percent, down from 36 percent in 2004. Tables 2A and 2B.

* The total value of all arms deliveries by all suppliers to developing nations from 2001-2004 ($82.9 billion in constant 2004 dollars) was dramatically lower than the value of arms deliveries by all suppliers to developing nations from 1997-2000 ($130.1 billion in constant 2004 dollars). Table 2A

* During the years 1997-2004, arms deliveries to developing nations comprised 68.2 percent of all arms deliveries worldwide. In 2004, the percentage of arms deliveries to developing nations was 64.6 percent of all arms deliveries worldwide. Table 2A and Figure 2

Regional Arms Delivery Values, 1997-2004

Table 2C gives the values of arms deliveries by suppliers to individual regions of the developing world for the periods 1997-2000 and 2001-2004. These values are expressed in current U.S. dollars. (2) Table 2D, derived from table 2C, gives the percentage distribution of each supplier's deliveries values within the regions for the two time periods. Table 2E, also derived from table 2C, illustrates what percentage share of each developing world region's total arms delivery values was held by specific suppliers during the years 1997-2000 and 2001-2004. Among the facts reflected in these tables are the following:

Near East

* The Near East has generally led in the value of arms deliveries received by the developing world. In 1997-2000, it accounted for 56.1 percent of the total value of all developing nations deliveries ($60.6 billion in current dollars). During 2001-2004 the region accounted for 51.8 percent of all such deliveries ($41.1 billion in current dollars). Tables 2C and 2D.

* For the period 1997-2000, the United States made 63.3 percent of its developing world arms deliveries to the Near East region. In 2001-2004, the United States made 58.4 percent of its developing world arms deliveries to the Near East region. Table 2D

* For the period 1997-2000, the United Kingdom made 81.4 percent of its developing world arms deliveries to the Near East region. In 2001 2004, the United Kingdom made 9 percent of its developing world arms deliveries to the Near East region. Table 2D

* For the period 1997-2000, 47.6 percent of France's arms deliveries to the developing world were to the Near East region. In the more recent period, 2001-2004, 91.1 percent of France's developing world deliveries were to nations of the Near East region. Table 2D

* For the period 1997-2000, Russia made 24.3 percent of its developing world arms deliveries to the Near East region. In 2001-2004, Russia made 8.1 percent of such deliveries to the Near East. Table 2D

* In the earlier period, 1997-2000, the United States ranked first in the value of arms deliveries to the Near East with 42.6 percent ($25.8 billion in current dollars). The United Kingdom ranked second with 25.3 percent ($15.3 billion in current dollars). France ranked third with 14.5 percent ($8.8 billion in current dollars). The major West European suppliers, as a group, held 41.6 percent of this region's delivery values in 1997-2000. In the later period (2001-2004), the United States ranked first in Near East delivery values with 40.4 percent ($16.6 billion in current dollars). The United Kingdom ranked second with 9 percent ($11.9 billion in current dollars). France ranked third with 19.7 percent ($8.1 billion in current dollars). The major West European suppliers, as a group, held 48.7 percent of this region's delivery values in 2001-2004. Tables 2C and 2E.

Asia

* The Asia region has historically ranked second in the value of arms deliveries from most suppliers in both time periods. In the earlier period, 1997-2000, 36.8 percent of all arms deliveries to developing nations were to those in Asia ($39.8 billion in current dollars). In the later period, 2001-2004, Asia accounted for 39.6 percent of such arms deliveries ($31.4 billion in current dollars). For the period 20012004, Russia made 87.6 percent of its developing world arms deliveries to Asia. Germany made 50 percent of its developing world deliveries to Asia. China made 63 percent of its developing world deliveries to Asia, while the United States made 33.8 percent. Tables 2C and 2D.

* In the period from 1997-2000, the United States ranked first in the value of arms deliveries to Asia with 35.4 percent ($14.1 billion in current dollars). France ranked second with 23.9 percent ($9.5 billion in current dollars). Russia ranked third with 17.4 percent ($6.9 billion in current dollars). The major West European suppliers, as a group, held 35.2 percent of this region's delivery values in 1997-2000 ($14 billion). In the period from 2001-2004, Russia ranked first in Asian delivery values with 44.9 percent ($14.1 billion in current dollars). The United States ranked second with 30.6 percent ($9.6 billion in current dollars). Tables 2C and 2E.

Latin America

* In the earlier period, 1997-2000, the value of all arms deliveries to Latin America was $3.8 billion. The United States ranked first in the value of arms deliveries to Latin America with 37.3 percent ($1.4 billion in current dollars). Russia and Germany tied for second with 7.8 percent ($300 million each in current dollars). The major West European suppliers, as a group, held 18.3 percent of this region's delivery values in 1997-2000. In the later period, 2001-2004, the United States ranked first in Latin American delivery values with 53.7 percent ($2.1 billion in current dollars). Italy was second with 7.7 percent ($300 million). The major West European suppliers, as a group, held 10.3 percent of this region's delivery values in 2001-2004. All other non-European suppliers combined held 20.6 percent ($800 million). During 2001-2004, the value of all arms deliveries to Latin America was $3.9 billion, essentially the same as the $3.8 billion deliveries total for 1997-2000. Tables 2C and 2E.

Africa

* In the earlier period, 1997-2000, the value of all arms deliveries to Africa was over $3.9 billion. Russia ranked first in the value of arms deliveries to Africa with 23.1 percent ($900 million in current dollars). China ranked second with 15.4 percent ($600 million in current dollars). The non-major West European suppliers, as a group, held 33.4 percent of this region's delivery values in 1997-2000 ($1.3 billion). The United States held 2.4 percent. In the later period, 2001-2004, Russia tied for first with Germany in African delivery values with 20.3 percent each ($600 million each in current dollars). China ranked third with 6.8 percent ($200 million in current dollars). The United States held 5.2 percent. The other non-major European suppliers collectively held 23.7 percent ($700 million in current dollars). All other non-European suppliers collectively held 16.9 percent ($500 million in current dollars). During the 2001-2004 period, the value of all arms deliveries to Africa decreased from $3.9 billion in 1997-2000 to about $3 billion (in current dollars). Tables 2C and 2E.

Arms Deliveries to Developing Nations, 1997-2004: Leading Suppliers Compared

Table 2F gives the values of arms deliveries to developing nations from 19972004 by the top eleven suppliers. The table ranks these suppliers on the basis of the total current dollar values of their respective deliveries to the developing world for each of three periods, 1997-2000, 2001-2004 and 1997-2004. Among the facts reflected in this table are the following:

* The United States ranked first among all suppliers to developing nations in the value of arms deliveries from 2001-2004 ($28.4 billion), and first for the entire period from 1997-2004 ($69.4 billion).

* The United Kingdom ranked third among all suppliers to developing nations in the value of arms deliveries from 2001-2004 ($12.4 billion), and second for the entire period from 1997-2004 ($1.3 billion).

* Russia ranked second among all suppliers to developing nations in the value of arms deliveries from 2001-2004 ($16.1 billion), and fourth for the entire period from 1996-2003 ($26.9 billion).

Arms Deliveries With Developing Nations in 2004: Leading Suppliers Compared

Table 2G ranks and gives for 2004 the values of arms deliveries to developing nations of the top ten suppliers in current U.S. dollars. Among the facts reflected in this table are the following:

* The United States, Russia, and France, the year's top three arms suppliers. They are ranked by the value of their arms deliveries, collectively made deliveries in 2004 valued at $18.3 billion, 81.3 percent of all arms deliveries made to developing nations by all suppliers.

* In 2004, the United States ranked first in the value of arms deliveries to developing nations, making $9.6 billion in such agreements, or 42.6 percent of them.

* Russia ranked second and France third in deliveries to developing nations in 2004, making $4.5 billion and $4.2 billion in such deliveries respectively.

* The United Kingdom ranked fourth in arms deliveries to developing nations in 2004, making $1.3 billion in such deliveries, while China ranked fifth with $600 million in deliveries.

Arms Deliveries to Near East, 1997-2004: Suppliers and Recipients

Table 2H gives the values of arms delivered to Near East nations by suppliers or categories of suppliers for the periods 1997-2000 and 2001-2004. These values are expressed in current U.S. dollars. They are a subset of the data contained in Tables 2 and 2C. Among the facts reflected by this table are the following:

* For the most recent period, 2001-2004, the principal arms recipients of the United States in the Near East region, based on the value of their arms deliveries were Egypt ($5.3 billion) Saudi Arabia ($4.7 billion), Israel ($3.3 billion), and Kuwait ($1 billion). The principal arms recipients of Russia were Yemen ($400), Egypt and the U.A.E. ($200 million each). The principal arms recipients of China were Egypt ($300 million), Kuwait ($200 million), and Algeria, Iran, and Yemen ($100 million each). The principal arms recipients of the four major West European suppliers, as a group, were Saudi Arabia ($13.9 billion), and the U.A.E. ($5.6 billion). The principal arms recipient of all other European suppliers collectively was Saudi Arabia ($400 million). The principal arms recipients of all other suppliers, as a group, were Iran, Kuwait and Libya ($400 million each).

* For the period 2001-2004, Saudi Arabia received $19 billion in arms deliveries. Its principal suppliers were the United States ($4.7 billion), and the four major West Europeans, as a group ($13.9 billion). Egypt received $5.9 billion in arms deliveries. Its principal supplier was the United States ($5.3 billion). Israel received $3.4 billion in arms deliveries. Its principal supplier was the United States ($3.3 billion). The U.A.E. received $6.8 billion in arms deliveries. Its principal suppliers were the four major West Europeans, as a group ($5.6 billion), and the United States ($800 million). Kuwait received $1.5 billion in arms deliveries. Its principal supplier was the United States ($1 billion). Iran received $500 million in arms deliveries. Its principal suppliers were Russia and China ($100 million each), all other non-major European suppliers collectively ($100 million), and all other non-European suppliers ($200 million).

* The value of United States arms deliveries to Saudi Arabia declined dramatically from $16 billion in 1997-2000 to $4.7 billion in 20012004, as implementation of major orders placed during the Persian Gulf war era were essentially concluded.

* The value of Russian arms deliveries to Iran declined dramatically from the 1997-2000 period to the 2001-2004 period. Russian arms deliveries fell from $1 billion to $100 million.

* Chinese arms deliveries to Iran dropped substantially from 1997-2000 to 2001-2004, falling from $400 million in 1997-2000 to $100 million in 2001-2004.

Arms Deliveries to Developing Nations, 1997-2004: The Leading Recipients

Table 2I gives the values of arms deliveries made to the top ten recipients of arms in the developing world from 1997-2004 by all suppliers collectively. The table ranks recipients on the basis of the total current dollar values of their respective deliveries from all suppliers for each of three periods --1997-2000, 2001-2004 and 1997-2004. Among the facts reflected in this table are the following:

* Saudi Arabia and China were the top two developing world recipients of arms from 1997-2004, receiving deliveries valued at $54.7 billion and $13 billion, respectively, during these years. The total value of all arms deliveries to developing nations from 1997-2004 was $187.2 billion in current dollars (see table). Thus, Saudi Arabia and Taiwan were responsible for 29.2 percent and 6.9 percent, respectively, of all developing world deliveries during these eight years together 36.1 percent of the total. In the most recent period, 2001-2004, Saudi Arabia and China ranked first and second in the value of arms received by developing nations ($19 billion and $8.8 billion, respectively, in current dollars). Together, Saudi Arabia and China accounted for 35.1 percent of all developing world arms deliveries ($27.8 billion out of $79.2 billion, the value of all deliveries to developing nations in 2001-2004 (in current dollars).

* For the 2001-2004 period, Saudi Arabia alone received $19 billion in arms deliveries (in current dollars), or 4 percent of all deliveries to developing nations during this period.

* During 1997-2000, the top ten recipients collectively accounted for 68.3 percent of all developing world arms deliveries. During 2001-2004, the top ten recipients collectively accounted for 76 percent of all such deliveries. Tables 2 and 2I.

Arms Transfers to Developing Nations in 2004: Agreements With Leading Recipients

Table 2J names the top ten developing world recipients of arms transfer agreements in 2004. The table ranks these recipients on the basis of the total current dollar values of their respective agreements with all suppliers in 2004. Among the facts reflected in this table are the following:

* The U.A.E. was the leading recipient of arms deliveries in 2004 among developing nations, receiving $3.6 billion in such deliveries. Saudi Arabia ranked second with $3.2 billion. China ranked third with $2.7 billion. Tables 2 and 2J.

* Arms deliveries in 2004 to the top ten developing nation recipients, collectively, constituted $17.7 billion, or 78.8 percent of all developing nations deliveries. Five of the top ten arms recipients in the developing world in 2004 were in the Asian region; four were in the Near East region; one was in Africa. Tables 2 and 2J.

Selected Weapons Deliveries to Developing Nations, 1997-2004

Other useful data for assessing arms transfers are those that indicate who has actually delivered specific numbers of specific classes of military items to a region. These data are relatively "hard" in that they reflect actual transfers of military equipment. They have the limitation of not giving detailed information regarding either the sophistication or the specific name of the equipment delivered. However, these data show relative trends in the delivery of important classes of military equipment and indicate who the leading suppliers are from region to region over time. Data in the following tables set out actual deliveries of fourteen categories of weaponry to developing nations from 1997-2004 by the United States, Russia, China, the four major West European suppliers as a group, all other European suppliers as a group, and all other suppliers as a group. Tables 3-7

Caution is warranted in using the quantitative data within these specific tables. Aggregate data on weapons categories delivered by suppliers do not provide precise indices of the quality and/or quantity of the weaponry delivered. The history of recent conventional conflicts suggests that quality and/or sophistication of weapons can offset quantitative advantage. Further, these data do not provide an indication of the relative capabilities of the recipient nations to use effectively the weapons delivered to them. Superior training, coupled with good equipment, tactical and operational proficiency, and sound logistics, may, in the last analysis, be a more important factor in a nation's ability to engage successfully in conventional warfare than the size of its weapons inventory.

Regional Weapons Deliveries Summary, 2001-2004

* The regional weapons delivery data collectively show that the United States was a leading supplier of several major classes of conventional weaponry from 2001-2004. Russia also transferred significant quantities of certain weapons classes during these years.

* The major West European suppliers were serious competitors in weapons deliveries from 2001-2004 making notable deliveries of certain categories of armaments to every region of the developing world--most particularly to the Near East, Asia, and to Latin America. In Africa, all European suppliers, China and all other non-European suppliers were major sources of weapons delivered.

* Regional weapons delivery data reflect the diverse sources of supply of conventional weaponry available to developing nations. Even though the United States, Russia, and the four major West European suppliers tend to dominate the delivery of the fourteen classes of weapons examined, it is also evident that the other European suppliers, and non-European suppliers, including China, are fully capable of providing specific classes of conventional armaments to developing nations, should their systems prove attractive to prospective purchasers. Examples are listed below.

* Tanks,

* Missiles,

* Armored vehicles,

* Aircraft,

* Artillery pieces,

* Surface-to-surface missiles,

* Surface-to-air missiles, and

* Anti-ship missiles.

Noteworthy deliveries of specific categories of weapons to regions of the developing world by specific suppliers from 2001-2004 included the following:

* Asia

Russia delivered 370 tanks and self-propelled guns, 300 APCs and armored cars, four major surface combatants, minor surface combatants, submarine, 40 supersonic combat aircraft, 200 helicopters, 770 surface-to-air missiles, and 70 anti-ship missiles. The United States delivered 32 tanks and self-propelled guns, 91 artillery pieces, 6 major surface combatants, 2 minor surface combatants, 8 supersonic combat aircraft, 65 helicopters, 2,267 surface-to-air missiles, and 198 antiship missiles. China delivered 130 tanks and self-propelled guns, 300 artillery pieces, 310 APCs and armored cars, 10 minor surface combatants, 50 supersonic combat aircraft, and 500 surface-to-air missiles. The four major West European suppliers as a group delivered major surface combatant, 7 minor surface combatants, 10 supersonic combat aircraft; and 20 helicopters. All other European suppliers collectively delivered 110 tanks and self-propelled guns, 260 APCs and armored cars, 1 major surface combatant, 24 minor surface combatants, 3 submarines, 10 helicopters, and 70 surface-to-air missiles. All other non-European suppliers collectively delivered 90 artillery pieces, 100 APCs and armored cars, major surface combatants, 4 minor surface combatants, 40 supersonic combat aircraft, and 510 surface-to-air missiles.

* Near East

Russia delivered 90 APCs and armored cars, 0 supersonic combat aircraft, 60 helicopters, and 1,000 surface-to-air missiles. The United States delivered 401 tanks and self-propelled guns, 36 APCs and armored cars, 31 supersonic combat aircraft, 12 helicopters, 347 surface-to-air missiles, and 122 anti-ship missiles. China delivered 40 APCs and armored cars, 5 minor surface combatants, and 70 anti-ship missiles. The four major West European suppliers collectively delivered 300 tanks and self-propelled guns, 30 APCs and armored cars; 5 major surface combatants, 26 minor surface combatants, guided missile boats, 0 supersonic combat aircraft; and 0 helicopters. All other European suppliers as a group delivered 270 tanks and self-propelled guns, 130 APCs and armored cars, major surface combatant, minor surface combatants, 0 supersonic combat aircraft, and 540 surface-to-air missiles. All other suppliers collectively delivered 270 APCs and armored cars, 80 minor surface combatants, 20 helicopters, 40 surface-to-surface missiles, and 20 anti-ship missiles.

* Latin America

Russia delivered 10 helicopters, and 30 surface-to-air missiles. The United States delivered artillery pieces, major surface combatants, 9 minor surface combatants; 4 supersonic combat aircraft, 14 helicopters, 22 surface-to-air missiles, and 16 anti-ship missiles. China delivered 10 minor surface combatants. The four major West European suppliers collectively delivered major surface combatants, minor surface combatant, and 0 helicopters. All other European suppliers collectively delivered 30 tanks and self-propelled guns, 10 helicopters, and 40 surface-to-air missiles. All other non-European suppliers as a group delivered 20 artillery pieces, 2 minor surface combatants, 10 helicopters, 40 surface-to-air missiles, and 30 anti-ship missiles.

* Africa

Russia delivered 10 tanks and self-propelled guns, 30 artillery pieces, 130 APCs and armored cars; 2 minor surface combatants, 60 helicopters, and 40 surface-to-air missiles. China delivered 21 minor surface combatants. The four major West European suppliers collectively delivered

* 50 APCs and armored cars;

* 4 major surface combatants,

* minor surface combatants, and

* 10 helicopters.

All other European suppliers collectively delivered

* 10 tanks and self-propelled guns,

* 800 artillery pieces, * 370 APCs and armored cars, * 4 minor surface combatants, * 20 supersonic combat aircraft, * 20 helicopters, and * 20 surface-to-air missiles.

All other non-European suppliers as a group delivered

* 50 tanks and self-propelled guns,

* 40 artillery pieces,

* 40 APCs and armored cars,

* major surface combatant;

* 4 minor surface combatants,

* 10 supersonic combat aircraft, and

* 60 helicopters.

Description of Items Counted in Weapons Categories, 1997-2004

Tanks and Self-propelled Guns: This category includes light, medium, and heavy tanks; selfpropelled artillery; self-propelled assault guns.

Artillery: This category includes field and air defense artillery, mortars, rocket launchers and recoilless rifles, 100 mm and over; FROG launchers, 100mm and over.

Armored Personnel Carriers (APCs) and Armored Cars: This category includes personnel carriers, armored and amphibious; armored infantry fighting vehicles; armored reconnaissance and command vehicles.

Major Surface Combatants: This category includes aircraft carriers, cruisers, destroyers, frigates.

Minor Surface Combatants: This category includes minesweepers, subchasers, motor torpedo boats, patrol craft, motor gunboats.

Submarines: This category includes all submarines, including midget submarines.

Guided Missile Patrol Boats: This category includes all boats in this class.

Supersonic Combat Aircraft: This category includes all fighter and bomber aircraft designed to function operationally at speeds above Mach 1.

Subsonic Combat Aircraft: This category includes all fighter and bomber aircraft designed to function operationally at speeds below Mach 1.

Other Aircraft: This category includes all other fixed-wing aircraft, including trainers, transports, reconnaissance aircraft, and communications/utility aircraft.

Helicopters: This category includes all helicopters, including combat and transport.

Surface-to-air Missiles: This category includes all ground-based air defense missiles.

Surface-to-surface Missiles: This category includes all surface-surface missiles without regard to range, such as Scuds and CSS-2s. It excludes all anti-tank missiles. It also excludes all anti-ship missiles, which are counted in a separate listing.

Anti-ship Missiles: This category includes all missiles in this class such as the Harpoon, Silkworm, Styx and Exocet.

(1) Because these regional data are composed of four-year aggregate dollar totals, they must be expressed in current dollar terms.

Richard F. Grimmett Specialist in National Defense Foreign Affairs, Defense, and Trade Division Congressional Research Service--The Library of Congress 1997-2004

(2) Because these regional data are composed of four-year aggregate dollar totals, they must be expressed in current dollar terms.

Table 1. Arms Transfer Agreements with Developing Nations, by Supplier,
1997-2004

(in millions of current U.S. dollars)

                          1997     1998     1999     2000     2001

United States            3,463    5,936    8,020   12,490    6,631
Russia                   3,300    2,100    3,300    6,200    5,400
France                     900    5,300    1,100    2,200      700
United Kingdom           1,000    1,000    1,100        0      200
China                    1,300      500    2,500      500    1,000
Germany                    100    1,400    2,000      900      100
Italy                      300        0      500      100      200
All Other European       1,300    1,400    4,000    1,400    1,000
All Others                 700    1,000    1,600    2,000    1,600
Total                   12,363   18,636   24,120   25,790   16,831
* Dollar inflation
  Index:(2004 = 1.00)   0.8215   0.8432   0.8632    0.886   0.9119

                          2002     2003     2004   1997-2000

United States            8,564    6,290    6,876      58,270
Russia                   5,300    4,100    5,900      35,600
France                     400      500    1,000      12,100
United Kingdom             700        0    3,200       7,200
China                      400      300      600       7,100
Germany                    100        0        0       4,600
Italy                        0      300      600       2,000
All Other European       1,300    2,200    1,300      13,900
All Others               1,300      900    2,300      11,400
Total                   18,064   14,590   21,776     152,170
* Dollar inflation
  Index:(2004 = 1.00)   0.9382   0.9635   1           0

Source: U.S. Government

Note: Developing nations category excludes the U.S., Europe, Canada,
Japan, Australia and New Zealand. All data are for the calendar year
given except for U. S. MAP (Military Assistance Program), IMET
(International Military Education and Training), and Excess Defense
Article data which are included for the particular fiscal year. All
amounts given include the values of all categories of weapons, spare
parts, construction, all associated services, military assistance,
excess defense articles, and training programs. Statistics for foreign
countries are based upon estimated selling prices. All foreign data are
rounded to the nearest $100 million. The United States total in 2000
includes a $6.432 billion licensed commercial agreement with the United
Arab Emirates for 80 F-16 aircraft. *Based on Department of Defense
Price Deflator.

Table 1A. Arms Transfer Agreements with Developing Nations, by
Supplier, 1997-2004 (in millions of constant 2004 U.S. dollars)

                         1997      1998      1999       2000      2001

United States           4,215     7,035     9,291     14,097     7,272
Russia                  4,017     2,489     3,823      6,998     5,922
France                  1,096     6,281     1,274      2,483       768
United Kingdom          1,217     1,185     1,274          0       219
China                   1,582       593     2,896        564     1,097
Germany                   122     1,659     2,317      1,016       110
Italy                     365         0       579        113       219
All Other European      1,582     1,659     4,634      1,580     1,097
All Others                852     1,185     1,854      2,257     1,755
Total                  15,048    22,086    27,942     29,108    18,459

                         2002      2003      2004   1997-2004

United States           9,128     6,528     6,876     64,442
Russia                  5,649     4,255     5,900     39,053
France                    426       519     1,000     13,847
United Kingdom            746         0     3,200      7,841
China                     426       311       600      8,069
Germany                   107         0         0      5,331
Italy                       0       311       600      2,187
All Other European      1,386     2,283     1,300     15,521
All Others              1,386       934     2,300     12,523
Total                  19,254    15,141    21,776    168,814

Source: U.S. Government

Table 1B. Arms Transfer Agreements with Developing Nations, by
Supplier, 1997-2004 (expressed as a percent of total, by year)

                                1997        1998       1999       2000

United States                 28.01%      31.85%     33.25%     48.43%
Russia                        26.69%      11.27%     13.68%     24.04%
France                         7.28%      28.44%      4.56%      8.53%
United Kingdom                 8.09%       5.37%      4.56%      0.00%
China                         10.52%       2.68%     10.36%      1.94%
Germany                        0.81%       7.51%      8.29%      3.49%
Italy                          2.43%       0.00%      2.07%      0.39%
All Other European            10.52%       7.51%     16.58%      5.43%
All Others                     5.66%       5.37%      6.63%      7.75%
[Major West European *        18.60%      41.32%     19.49%     12.41%
Total                        100.00%     100.00%    100.00%    100.00%

                                2001        2002       2003       2004

United States                 39.40%      47.41%     43.11%     31.58%
Russia                        32.08%      29.34%     28.10%     27.09%
France                         4.16%       2.21%      3.43%      4.59%
United Kingdom                 1.19%       3.88%      0.00%     14.70%
China                          5.94%       2.21%      2.06%      2.76%
Germany                        0.59%       0.55%      0.00%      0.00%
Italy                          1.19%       0.00%      2.06%      2.76%
All Other European             5.94%       7.20%     15.08%      5.97%
All Others                     9.51%       7.20%      6.17%     10.56%
[Major West European *         7.13%       6.64%      5.48%   22.04%]
Total                        100.00%     100.00%    100.00%    100.00%

Source: U.S. Government

* Major West European category includes France, United Kingdom,
Germany, Italy.

Table 1C. Regional Arms Transfer Agreements, by Supplier, 1997-2004
(in millions of current U.S. dollars)

                                  Asia                Near East
                         1997-2000   2001-2004   1997-2000   2001-2004

United States                6,034      7,426      22,577      18,779
Russia                      11,400     16,800       2,200       2,600
France                       3,000        900       5,500       1,600
United Kingdom               1,800      2,200         600       1,800
China                        2,300      1,300       1,500         800
Germany                      2,500        100         400         100
Italy                          400        200         100         500
All Other European           1,000      2,700       2,700       1,400
All Others                   2,500      3,300       1,400         900
[Major West European *       7,700      3,400       6,600       4,000
Total                       38,634     38,326      43,577      32,479

                             Latin America             Africa
                         1997-2000   2001-2004   1997-2000   2001-2004
United States                1,215      1,995          83       161
Russia                         200        500         900       600
France                         400        100           0       100
United Kingdom                   0          0         100         0
China                            0          0         600       200
Germany                          0        100           0       600
Italy                          100        200         100       100
All Other European             900        600       1,300       700
All Others                     500      1,200         800       500
[Major West European *         500        400         200      800]
Total                        3,815      5,095       4,083     2,961

Source: U.S. Government

Note: All foreign data are rounded to the nearest $100 million. The
United States total for Near East in 1997-2000 includes a $6.432
billion licensed commercial agreement with the United Arab Emirates in
2000 for 80 F-16 aircraft.

* Major West European category includes France, United Kingdom, Germany,
Italy.

Table 1D. Percentage of Each Supplier's Agreements Value by Region,
1997-2004

                                     Asia
                            1997-2000    2001-2004

United States                  20.17%       26.18%
Russia                         77.55%       81.95%
France                         33.71%       33.33%
United Kingdom                 72.00%       55.00%
China                          52.27%       56.52%
Germany                        86.21%       11.11%
Italy                          57.14%       20.00%
All Other European             16.95%       50.00%
All Others                     48.08%       55.93%
[Major West European *         51.33%       39.53%
Total                          41.19%       49.15%

                                    Near East
                             1997-2000   2001-2004

United States                   75.49%      66.21%
Russia                          14.97%      12.68%
France                          61.80%      59.26%
United Kingdom                  24.00%      45.00%
China                           34.09%      34.78%
Germany                         13.79%      11.11%
Italy                           14.29%      50.00%
All Other European              45.76%      25.93%
All Others                      26.92%      15.25%
[Major West European *          44.00%      46.51%
Total                           49.23%      40.08%

                               Latin America
                           1997-2000    2001-2004

United States                   4.06%        7.03%
Russia                          1.36%        2.44%
France                          4.49%        3.70%
United Kingdom                  0.00%        0.00%
China                           0.00%        0.00%
Germany                         0.00%       11.11%
Italy                          14.29%       20.00%
All Other European             15.25%       11.11%
All Others                      9.62%       20.34%
[Major West European *          3.33%        4.65%
Total                           4.41%        6.61%

                                     Africa
                             1997-2000   2001-2004

United States                   0.28%       0.57%
Russia                          6.12%       2.93%
France                          0.00%       3.70%
United Kingdom                  4.00%       0.00%
China                          13.64%       8.70%
Germany                         0.00%      66.67%
Italy                          14.29%      10.00%
All Other European             22.03%      12.96%
All Others                     15.38%       8.47%
[Major West European *          1.33%       9.30%
Total                           5.17%       4.17%

                                    Total
                           1997-2000    2001-2004

United States                 100.00%      100.00%
Russia                        100.00%      100.00%
France                        100.00%      100.00%
United Kingdom                100.00%      100.00%
China                         100.00%      100.00%
Germany                       100.00%      100.00%
Italy                         100.00%      100.00%
All Other European            100.00%      100.00%
All Others                    100.00%      100.00%
[Major West European *        100.00%    100.00%]
Total                         100.00%      100.00%

Source: U.S. Government

* Major West European category includes France, United Kingdom,
Germany, Italy.

Table 1E. Percentage of Total Agreements Value by Supplier to Regions,
1997-2004

                               Asia                Near East
                       1997-2000  2001-2004  1997-2000  2001-2004

United States            19.51%     21.26%     61.06%     65.94%
Russia                   36.85%     48.10%      5.95%      9.13%
France                    9.70%      2.58%     14.87%      5.62%
United Kingdom            5.82%      6.30%      1.62%      6.32%
China                     7.44%      3.72%      4.06%      2.81%
Germany                   8.08%      0.29%      1.08%      0.35%
Italy                     1.29%      0.57%      0.27%      1.76%
All Other European        3.23%      7.73%      7.30%      4.92%
All Others                8.08%      9.45%      3.79%      3.16%
[Major West European *   24.89%      9.73%     17.85%     14.05%
Total                   100.00%    100.00%    100.00%    100.00%

                          Latin America             Africa
                       1997-2000  2001-2004  1997-2000  2001-2004

United States            36.65%     42.49%      2.14%      5.44%
Russia                    6.03%     10.65%     23.18%     20.26%
France                   12.07%      2.13%      0.00%      3.38%
United Kingdom            0.00%      0.00%      2.58%      0.00%
China                     0.00%      0.00%     15.45%      6.75%
Germany                   0.00%      2.13%      0.00%     20.26%
Italy                     3.02%      4.26%      2.58%      3.38%
All Other European       27.15%     12.78%     33.48%     23.64%
All Others               15.08%     25.56%     20.60%     16.89%
[Major West European *   15.08%      8.52%      5.15%    27.02%]
Total                   100.00%    100.00%    100.00%    100.00%

Source: U.S. Government

* Major West European category includes France, United Kingdom,
Germany, Italy.

Table 1F. Arms Transfer Agreement with Developing Nations, 1997-2004:
Leading Suppliers compared
(in millions of current U.S. dollars)

  Rank         Supplier           Agreements Value 1997-2000
    1        United States *               29,909
    2        Russia                        14,900
    3        France                         9,500
    4        China                          4,800
    5        Germany                        4,400
    6        United Kingdom                 3,100
    7        Sweden                         2,400
    8        Israel                         1,700
    9        Ukraine                        1,300
    10       Belarus                        1,100
    11       North Korea                    1,000

  Rank         Supplier            Agreements Value 2001-2004
    1        United States *               28,361
    2        Russia                        20,700
    3        United Kingdom                 4,100
    4        France                         2,600
    5        Israel                         2,500
    6        China                          2,300
    7        Ukraine                        2,000
    8        Italy                          1,100
    9        Netherlands                    1,100
    10       Poland                           900
    11       South Africa                     600

  Rank         Supplier            Agreements Value 1997-2004
    1        United States*                58,270
    2        Russia                        35,600
    3        France                        12,100
    4        United Kingdom                 7,200
    5        China                          7,100
    6        Germany                        4,600
    7        Israel                         4,200
    8        Ukraine                        3,300
    9        Sweden                         2,400
    10       Italy                          2,000
    11       Belarus                        1,300

Source: U.S. Government

Note: All for rounded to the nearest $10 million. Where rounded data
totals are the same, the actual rank order is maintained.

* The United States total includes a $6.432 billion licensed commercial
agreement with the United Arab Emirates in 2000
for 80 F-16 aircraft.

Table 1G. Arms Transfer Agreements with Developing Nations in 2004:
Leading Suppliers Compared

(in millions of current U.S. dollars)

Rank   Supplier         Agreements Value 2004

1      United States            6,876
2      Russia                   5,900
3      United Kingdom           3,200
4      Israel                   1,200
5      France                   1,000
6      China                      600
7      Italy                      600
8      Ukraine                    400
9      South Africa               400
10     Netherlands                400
11     Libya                      300

Source: U.S. Government

Note: All foreign data are rounded to the nearest $100 million.

Where rounded data totals are the same, the actual rank order is
maintained.

Table 1H. Arms Transfer Agreements with Near East, by Supplier

(in millions of current U.S. dollars)

Recipient
Country                                             Major West
1997-2000                   U.S.   Russia   China    European

Algeria                        0      600     200            0
Bahrain                      600        0       0            0
Egypt                      5,500      100     500          100
Iran                           0      400     600          100
Iraq                           0        0       0            0
Israel                     4,900        0       0            0
Jordan                       200        0       0          300
Kuwait                       500        0     200            0
Lebanon                        0        0       0            0
Libya                          0      100       0            0
Morocco                        0        0       0          100
Oman                           0        0       0          300
Qatar                          0        0       0            0
Saudi Arabia               4,100        0       0            0
Syria                          0      300       0          100
Tunisia                        0        0       0            0
United Arab Emirates       6,800      600       0        5,600
Yemen                          0        0       0            0

Recipient
Country                   All Other     All
1997-2000                  European   Others    Total

Algeria                         500      100    1,400
Bahrain                           0        0      600
Egypt                           100        0    6,300
Iran                              0      400    1,500
Iraq                            200        0      200
Israel                            0      100    5,000
Jordan                            0      100      600
Kuwait                            0      100      800
Lebanon                           0        0        0
Libya                           200      400      700
Morocco                         300        0      400
Oman                              0        0      300
Qatar                             0        0        0
Saudi Arabia                    800        0    4,900
Syria                           100      100      600
Tunisia                           0        0        0
United Arab Emirates            200      100   13,300
Yemen                           200      200      400

Recipient
Country                                             Major West
2001-2004                   U.S.   Russia   China     European

Algeria                        0      200       0            0
Bahrain                      300        0       0          100
Egypt                      5,700      200     300          100
Iran                           0      400     200            0
Iraq                           0      100       0          300
Israel                     4,400      300       0            0
Jordan                       900        0       0            0
Kuwait                     1,800      100     200            0
Lebanon                        0        0       0            0
Libya                          0      100       0            0
Morocco                        0      200       0            0
Oman                       1,000        0       0        1,200
Qatar                          0        0       0            0
Saudi Arabia               3,800        0       0        1,700
Syria                          0      200       0            0
Tunisia                        0        0       0            0
United Arab Emirates **      700      100       0          500
Yemen                          0      600     100            0

Recipient
Country                   All Other     All
2001-2004                 European    Others   Total

Algeria                           0      100      300
Bahrain                           0      100      500
Egypt                           200        0    6,500
Iran                            100      100      800
Iraq                            200      100      700
Israel                          100        0    4,800
Jordan                          100      100    1,100
Kuwait                            0      200    2,300
Lebanon                           0        0        0
Libya                             0      300      400
Morocco                           0      100      300
Oman                              0        0    2,200
Qatar                             0        0        0
Saudi Arabia                      0      100    5,600
Syria                             0      100    3,000
Tunisia                           0        0        0
United Arab Emirates **         400        0    1,700
Yemen                           100      100      900

Source: U.S. Government

Note: 0 = data less than $50 million or nil. All data are rounded to
nearest $100 million.

* Major West European includes France, United  Kingdom, Germany, and
Italy totals as an aggregate figure.

** The United States total for 1997-2000 includes a $6.432 billion
licensed commercial agreement with the United Arab Emirates in 2000 for
80 F-16 aircraft.

Table 1I. Arms Transfer Agreements of Developing Nations, 1997-2004
Agreements by the Leading Recipients

(in millions of current U.S. dollars)

Rank   Recipient                 Agreements Value 1997-2000

1      United Arab Emirates. *             13,300
2      India                               7,800
3      Egypt                               6,300
4      South Africa                        5,100
5      Israel                              5,000
6      Saudi Arabia                        4,900
7      China                               4,900
8      South Korea                         4,900
9      Singapore                           3,000
10     Malaysia                            2,500

Rank   Recipient                 Agreements Value 2001-2004

1      China                               10,400
2      India                               7,900
3      Egypt                               6,500
4      Saudi Arabia                        5,600
5      Israel                              4,800
6      South Korea                         3,300
7      Malaysia                            2,900
8      Pakistan                            2,500
9      Kuwait                              2,300
10     Oman                                2,200

Rank   Recipient                 Agreements Value 1997-2004

1      India                               15,700
2      China                               15,300
3      United Arab Emirates. *             15,000
4      Egypt                               12,800
5      Saudi Arabia                        10,500
6      Israel                              9,800
7      South Korea                         8,200
8      Malaysia                            5,400
9      South Africa                        5,300
10     Pakistan                            4,300

Source: U.S. Government

Note: All foreign data are rounded to the nearest $100 million. Where
rounded data totals are the same, the actual rank order is maintained.

* The U.A.E. Total includes a $6.432 billion licensed commercial
agreement with the United States in 2000 for 80 F-16 aircraft.

Table 1J. Arms Transfer Agreements of Developing Nations in 2004

Rank   Recipient      Agreements Value 2004

1      India                  5,700
2      Saudi Arabia           2,900
3      China                  2,200
4      Egypt                  1,700
5      Oman                   1,000
6      Israel                   900
7      Pakistan                 800
8      Taiwan                   600
9      Afghanistan              500
10     U.A.E.                   500

Source: U.S. Government

Note: All foreign data are rounded to the nearest $100 million. Where
rounded data totals are the same, the actual rank order is maintained.

Table 2. Arms Deliveries to Developing Nations, by Supplier, 1997-2004

(in millions of current U.S. dollars)

                            1997     1998     1999     2000     2001

United States             10,170   10,450   12,213    8,164    5,851
Russia                     2,200    2,300    2,700    3,600    4,100
France                     6,100    7,000    3,500    1,900      900
United Kingdom             6,400    3,300    4,500    4,700    3,700
China                      1,100      600      400      700      700
Germany                      400      200      700      500      100
Italy                        400      200      500        0      200
All Other European         3,000    2,100    2,100    2,000    1,100
All Others                 1,100    1,000      800    1,000    1,300
Total                     30,870   27,150   27,413   22,564   17,951
Dollar inflation index:   0.8215   0.8438   0.8632   0.8860   0.9119
(2004 = 1.00)

                                                       Total
                            2002     2003     2004   1997-2004

United States              6,926    6,035    9,557      69,366
Russia                     3,400    4,100    4,500      26,900
France                     1,400    2,400    4,200      27,400
United Kingdom             3,400    4,000    1,300      31,300
China                        800      600      600       5,500
Germany                        0      700      500       3,100
Italy                        100      100      100       1,600
All Other European         1,200    1,000      500      13,000
All Others                 1,500    1,100    1,200       9,000
Total                     18,726   20,035   22,457     187,166
Dollar inflation index:   0.9382   0.9635        1
(2004 = 1.00)

Source: U.S. Government

Note: Developing nations category excludes the United States, Russia,
Europe, Canada, Japan, Australia, and New Zealand. All data are for the
calendar year given, except for U.S. MAP (Military Assistance Program),
IMET (International Military Education and Training), excess defense
articles, and commercially licensed deliveries, which are included
for the particular fiscal year. All amounts given include the values of
all categories of weapons and ammunition, military spare parts,
military construction, military assistance and training programs, and
all associated services. Statistics for foreign countries are based
upon estimated selling prices. All foreign data are rounded to the
nearest $100 million.

* Based on Department of Defense Price Deflator.

Table 2A. Arms Deliveries to Developing Nations, by Supplier, 1997-2004

(in millions of constant 2004 U.S. dollars)

                        1997     1998     1999     2000     2001

United States         12,380   12,384   14,149    9,214    6,416
Russia                 2,678    2,607    2,665    4,063    4,496
France                 7,425    8,296    4,055    2,144      987
United Kingdom         7,791    7,585    5,213    5,305    4,057
China                  1,339      711      463      790      768
Germany                  487      237      811      564      110
Italy                    487      237      579        0      219
All Other European     3,652    2,489    2,433    2,257    1,206
All Others             1,339    1,185      927    1,129    1,426
Total                 37,578   35,731   31,295   25,466   19,685

                                                    Total
                        2002     2003     2004   1997-2004

United States          7,382    6,264    9,557      77,746
Russia                 3,624    4,255    4,500      28,888
France                 1,492    2,491    4,200      31,090
United Kingdom         3,624    4,152    1,300      39,027
China                    853      623      600       6,147
Germany                    0      727      500       3,436
Italy                    107      104      100       1,833
All Other European     1,279    1,038      500      14,854
All Others             1,599    1,142    1,200       9,947
Total                 19,960   20,796   22,457     212,968

Source: U.S. Government

Table 2B. Arms Deliveries to Developing Nations, by Supplier, 1997-2004

(expressed as a percent of total, by year)

                            1997      1998      1999      2000

United States             32.94%    38.49%    44.55%    36.18%
Russia                     7.13%     8.47%     9.85%    15.95%
France                    19.76%    25.78%    12.77%     8.42%
United Kingdom            20.73%    12.15%    16.42%    20.83%
China                      3.56%     2.21%     1.46%     3.10%
Germany                    1.30%     0.74%     2.55%     2.22%
Italy                      1.30%     0.74%     1.82%     0.00%
All Other European         9.72%     7.73%     7.66%     8.86%
All Others                 3.56%     3.68%     2.92%     4.43%
[Major West European *    43.08%    39.41%    33.56%    31.47%
TOTAL                    100.00%   100.00%   100.00%   100.00%

                            2001      2002      2003      2004

United States             32.59%    36.99%    30.12%    42.56%
Russia                    22.84%    18.16%    20.46%    20.04%
France                     5.01%     7.48%    11.98%    18.70%
United Kingdom            20.61%    18.16%    19.97%     5.79%
China                      3.90%     4.27%     2.99%     2.67%
Germany                    0.56%     0.00%     3.49%     2.23%
Italy                      1.11%     0.53%     0.50%     0.45%
All Other European         6.13%     6.41%     4.99%     2.23%
All Others                 7.24%     8.01%     5.49%     5.34%
[Major West European *    27.30%    26.17%    35.94%   27.16%]
TOTAL                    100.00%   100.00%   100.00%   100.00%

Source: U.S. Government

* Major West European category includes France, United Kingdom,
Germany, Italy.

Table 2C. Regional Arms Deliveries by Supplier, 1997-2004

(In millions of current U.S. Dollars)

                         1997-2000   2001-2004   1997-2000   2001-2004

United States               14,072       9,604      25,796      16,606
Russia                       6,900      14,100       2,600       1,300
France                       9,500         600       8,800       8,100
United Kingdom               3,200         500      15,300      11,900
China                        1,400       1,700         800         800
Germany                        500         600       1,000           0
Italy                          800         100         100           0
All Other European           1,600       1,400       5,200       1,400
All Others                   1,800       2,800       1,000       1,000
[Major West European *     -14,000       1,800      25,200      20,000
Total                       39,772      31,404      60,596      41,106

                         1997-2000   2001-2004   1997-2000   2001-2004

United States                1,426       2,084          95         152
Russia                         300         100         900         600
France                         200         100           0         100
United Kingdom                 200           0         100           0
China                          100           0         600         200
Germany                        300           0           0         600
Italy                            0         300         100         100
All Other European           1,000         500       1,300         700
All Others                     300         800         800         500
[Major West European *         700         400         200        800]
Total                        3,826       3,884       3,895       2,952

Source: U.S. Government

Note: All foreign data are rounded to the nearest $100 million.

* Major West European category includes France, United Kingdom,
Germany, Italy.

Table 2D. Percentage of Supplier Deliveries Value by Region, 1997-2004

                                 Asia                 Near East

                         1997-2000   2001-2004   1997-2000   2001-2004

United States               34.00%      33.76%      62.33%      58.38%
Russia                      64.49%      87.58%      24.30%       8.07%
France                      51.35%       6.74%      47.57%      91.01%
United Kingdom              17.02%       4.03%      81.38%      95.97%
China                       48.28%      62.96%      27.59%      29.63%
Germany                     27.78%      50.00%      55.56%       0.00%
Italy                       80.00%      20.00%      10.00%       0.00%
All Other European          17.58%      35.00%      57.14%      35.00%
All Others                  46.15%      54.90%      25.64%      19.61%
[Major West European *      34.91%       7.83%      62.84%      86.96%
TOTAL                       36.80%      39.58%      56.06%      51.81%

                             Latin America              Africa

                         1997-2000   2001-2004   1997-2000   2001-2004

United States                3.45%       7.33%       0.23%       0.53%
Russia                       2.80%       0.62%       8.41%       3.73%
France                       1.08%       1.12%       0.00%       1.12%
United Kingdom               1.06%       0.00%       0.53%       0.00%
China                        3.45%       0.00%      20.69%       7.41%
Germany                     16.67%       0.00%       0.00%      50.00%
Italy                        0.00%      60.00%      10.00%      20.00%
All Other European          10.99%      12.50%      14.29%      17.50%
All Others                   7.69%      15.69%      20.51%       9.80%
[Major West European *       1.75%       1.74%       0.50%       3.48%
TOTAL                        3.54%       4.90%       3.60%       3.72%

                           Total       Total
                         1997-2000   2001-2004

United States              100.00%     100.00%
Russia                     100.00%     100.00%
France                     100.00%     100.00%
United Kingdom             100.00%     100.00%
China                      100.00%     100.00%
Germany                    100.00%     100.00%
Italy                      100.00%     100.00%
All Other European         100.00%     100.00%
All Others                 100.00%     100.00%
[Major West European *     100.00%     100.00%
TOTAL                      100.00%     100.00%

Source: U.S. Government

* Major West European category includes France, United Kingdom,
Germany, Italy.

Table 2E. Percentage of Total Deliveries Value by Supplier to Regions,
1997-2004

(in millions of current U.S. dollars)

                                Asia                Near East

                         1997-2000   2001-2004   1997-2000   2001-2004

United States               35.38%      30.58%      42.57%      40.40%
Russia                      17.35%      44.90%       4.29%       3.16%
France                      23.89%       1.91%      14.52%      19.71%
United Kingdom               8.05%       1.59%      25.25%      28.95%
China                        3.52%       5.41%       1.32%       1.95%
Germany                      1.26%       1.91%       1.65%       0.00%
Italy                        2.01%       0.32%       0.17%       0.00%
All Other European           4.02%       4.46%       8.58%       3.41%
All Others                   4.53%       8.92%       1.65%       2.43%
[Major West European *      35.20%       5.73%      41.59%      48.65%
Total                      100.00%     100.00%     100.00%     100.00%

                              Latin America             Africa

                         1997-2000   2001-2004   1997-2000   2001-2004

United States               37.27%      53.66%       2.44%       5.15%
Russia                       7.84%       2.57%      23.11%      20.33%
France                       5.23%       2.57%       0.00%       3.39%
United Kingdom               5.23%       0.00%       2.57%       0.00%
China                        2.61%       0.00%      15.40%       6.78%
Germany                      7.84%       0.00%       0.00%      20.33%
Italy                        0.00%       7.72%       2.57%       3.39%
All Other European          26.14%      12.87%      33.38%      23.71%
All Others                   7.84%      20.60%      20.54%      16.94%
[Major West European *      18.30%      10.30%       5.13%     27.10%]
Total                      100.00%     100.00%     100.00%     100.00%

Source: U.S. Government

* Major West European category includes France, United Kingdom,
Germany, Italy

Table 2F Arms Deliveries to Developing Nations, 1997-2004
Leading Suppliers Compared

(in millions of current U.S. dollars)

Rank   Supplier         Deliveries Value 1997-2000

1      United States              40,997
2      United Kingdom             18,900
3      France                     18,500
4      Russia                     10,800
5      China                       2,800
6      Sweden                      2,400
7      Germany                     1,800
8      Ukraine                     1,800
9      Belarus                     1,400
10     Israel                      1,100
11     Italy                       1,100

Rank   Supplier         Deliveries Value 2001-2004

1      United States              28,369
2      Russia                     16,100
3      United Kingdom             12,400
4      France                      8,900
5      China                       2,700
6      Israel                      1,800
7      Germany                     1,300
8      Ukraine                     1,200
9      Brazil                        500
10     North Korea                   500
11     Italy                         500

Rank   Supplier         Deliveries Value 1997-2004

1      United States              69,366
2      United Kingdom             31,300
3      France                     27,400
4      Russia                     26,900
5      China                       5,500
6      Germany                     3,100
7      Ukraine                     3,000
8      Israel                      2,900
9      Sweden                      2,700
10     Belarus                     1,600
11     Italy                       1,600

Source: U.S. Government

Note: All foreign data are rounded to the nearest $100 million. Where
rounded data totals are the same, the actual rank order is maintained.

Table 2G. Arms Deliveries to Developing Nations in 2004
Leading Suppliers Compared

 (in millions of current U.S. dollars)

Rank   Supplier         Deliveries Value 2004

1      United States            9,557
2      Russia                   4,500
3      France                   4,200
4      United Kingdom           1,300
5      China                      600
6      Germany                    500
7      Libya                      300
8      Ukraine                    300
9      Brazil                     300
10     Israel                     300

Source: U.S. Government

Note: All foreign data are rounded to the nearest $100 million. Where
rounded data totals are the same, the actual rank order is maintained.

Table 2H. Arms Deliveries to Near East, by Supplier

(in millions of current U.S. dollars)

Recipient                                           Major West
Country                    U.S.    Russia   China   European *

1997-2000

Algeria                        0      500     100            0
Bahrain                      600        0       0            0
Egypt                      3,200      400       0          100
Iran                           0    1,000     400          100
Iraq                           0        0       0            0
Israel                     3,800        0       0        1,000
Jordan                       300        0       0            0
Kuwait                     1,400        0     200        1,200
Lebanon                      100        0       0          100
Libya                          0        0       0            0
Morocco                      100        0       0          100
Oman                           0        0       0          200
Qatar                          0        0       0        1,800
Saudi Arabia              16,000        0       0       17,100
Syria                          0      300       0          100
Tunisia                      100        0       0            0
United Arab Emirates         200      400       0        3,400
Yemen                          0        0       0          100

Recipient                 All Other     All
Country                   European    Others   Total

1997-2000

Algeria                         700      100    1,400
Bahrain                           0        0      600
Egypt                             0        0    3,800
Iran                          3,000      100    1,900
Iraq                              0        0        0
Israel                            0      200    5,000
Jordan                            0      200      500
Kuwait                          100        0    2,900
Lebanon                           0        0      200
Libya                           100      100      200
Morocco                         200      200      600
Oman                              0        0      200
Qatar                             0        0    1,800
Saudi Arabia                  2,600        0   35,700
Syria                             0      100      500
Tunisia                           0        0      100
United Arab Emirates            800        0    4,800
Yemen                           200      100      400

Recipient                                           Major West
Country                    U.S.    Russia   China   European *

2001-2004

Algeria                      100      100     100            0
Algeria                      300        0       0            0
Bahrain                    5,300      200     300          100
Egypt                          0      100     100            0
Iran                           0        0       0            0
Iraq                       3,300        0       0            0
Israel                       300        0       0          100
Jordan                     1,000      100     200            0
Kuwait                         0        0       0            0
Lebanon                        0      100       0            0
Libya                        100        0       0          100
Morocco                      100        0       0          100
Oman                           0        0       0            0
Qatar                      4,700        0       0       13,900
Saudi Arabia                   0      100       0            0
Syria                          0        0       0            0
Tunisia                      800      200       0        5,600
United Arab Emirates **        0      400     100          100
Yemen

Recipient                 All Other     All
Country                   European    Others   Total

2001-2004

Algeria                         100        0      400
Algeria                           0        0      300
Bahrain                           0        0    5,900
Egypt                           100      200      500
Iran                            100      100      200
Iraq                            100        0    3,400
Israel                          100        0      500
Jordan                            0      200    1,500
Kuwait                            0        0        0
Lebanon                         100      200      400
Libya                             0      100      300
Morocco                           0      100      300
Oman                              0        0        0
Qatar                           400        0   19,000
Saudi Arabia                    100      100      300
Syria                             0        0        0
Tunisia                         200        0    6,800
United Arab Emirates **         100        0      700
Yemen

Source: U.S. Government

Note: 0 = data less than $50 million or nil. All data are rounded to
Nearest $100 million.

* Major West European includes France, United Kingdom, Germany, and
Italy totals as an aggregate figure.

Table 2I. Arms Deliveries to Developing Nations, 1997-2004:
The Leading Recipients

 (in millions of current U.S. dollars)

Rank   Recipient      Deliveries Value 1997-2000

1      Saudi Arabia             35,700
2      Taiwan                   7,300
3      South Korea              5,100
4      Israel                   5,000
5      U.A.E.                   4,800
6      China                    4,200
7      Egypt                    3,800
8      Kuwait                   2,900
9      Pakistan                 2,800
10     India                    2,200

Rank   Recipient      Deliveries Value 2001-2004

1      Saudi Arabia             19,000
2      China                     8,800
3      U.A.E.                    6,800
4      India                     6,000
5      Egypt                     5,900
6      Taiwan                    3,900
7      Israel                    3,400
8      South Korea               2,600
9      Pakistan                  2,400
10     Malaysia                  1,400

Rank   Recipient      Deliveries Value 1997-2004

1      Saudi Arabia             54,700
2      China                    13,000
3      U.A.E.                   11,600
4      Taiwan                   11,200
5      Egypt                     9,700
6      Israel                    8,400
7      India                     8,200
8      Pakistan                  8,200
9      South  Korea              7,700
10     Malaysia                  3,000

Source: U.S. Government

Note: All foreign data are rounded to the nearest $100 million. Where
rounded data totals are the same, the actual rank order is maintained.

Table 2J Arms Deliveries to Developing Nations in 2004:
The Leading Recipients

(in millions of current U.S. dollars)

Rank   Recipient      Deliveries Value 2004

1      U.A.E.                 3,600
2      Saudi Arabia           3,200
3      China                  2,700
4      India                  1,700
5      Egypt                  1,700
6      Israel                 1,500
7      Taiwan                 1,100
8      Pakistan                 900
9      South Korea              800
10     South Africa             500

Source: U.S. Government

Note: All foreign data are rounded to the nearest $100
million. Where rounded data totals are the same, the
actual rank order is maintained.

Figure 1. Worldwide Arms Transfer Agreements, 1997-2004 and
Suppliers' Share with Developing World
(in millions of constant 2004 U.S. Dollars)

                                                      Percentage of
                           Worldwide Agreements        Total with
Supplier                   Value 1997-2000          Developing World

United States                              53,588              76.50
Russia                                     19,200              90.60
France                                     15,633              71.20
United Kingdom                              5,886              62.40
China                                       6,567              85.80
Germany                                    13,107              39.00
Italy                                       2,113              50.00
All Other European                         15,659              60.40
All Others                                  7,428              82.80
Total                                     139,181              67.70

                                                      Percentage of
                           Worldwide Agreements        Total with
Supplier                   Value 2001-2004          Developing World
United States                              54,319              54.90
Russia                                     22,565              96.60
France                                     11,088              24.50
United Kingdom                              7,105              58.60
China                                       2,434             100.00
Germany                                     5,277              41.00
Italy                                       2,749              41.10
All Other European                         15,509              39.10
All Others                                  9,149              58.70
Total                                     130,195              57.30

                                                      Percentage of
                           Worldwide Agreements        Total with
Supplier                   Value 2004               Developing World
United States                              12,391               5.50
Russia                                      6,100              96.70
France                                      4,800              20.80
United Kingdom                              5,500              58.20
China                                         600             100.00
Germany                                       200               0.00
Italy                                         600             100.00
All Other European                          4,300              30.20
All Others                                  2,500              92.00
Total                                      36,991              58.90

Source: U.S. Government

Figure 2. Worldwide Arms Deliveries, 1997-2004 and Suppliers'
Share with Developing World
(in millions of constant 2004 U.S. dollars)

                             Worldwide         Percentage of
                         Deliveries Value        Total to
Supplier                     1997-2000       Developing World

United States                 76,202               63.2
Russia                        14,807               81.1
France                        24,969               87.8
United Kingdom                26,295               98.5
China                          3,651               90.5
Germany                        7,255               28.9
Italy                          1,874               69.5
All Other European            15,989               67.7
All Others                    10,205               44.9
Total                         181,247              71.8

                             Worldwide         Percentage of
                         Deliveries Value        Total to
Supplier                     2001-2004       Developing World

United States                 53,967               54.9
Russia                        17,625               95.7
France                        11,626               78.9
United Kingdom                17,149               76.6
China                          3,053               93.2
Germany                        4,914               27.2
Italy                          1,387               38.2
All Other European            11,096               36.3
All Others                    10,400               51.6
Total                         131,217              63.2

                             Worldwide         Percentage of
                         Deliveries Value        Total to
Supplier                       2004          Developing World

Russia                         4,600               97.8
France                         4,400               95.5
United Kingdom                 1,900               68.4
China                           700                85.7
Germany                         900                55.6
Italy                           100                 100
All Other European             1,200               41.7
All Others                     2,400                50
Total                         16,200               64.6

Source: U.S. Government

Chart 2. Arms Transfer Agreements Worldwide
(supplier percentage of value).

1997-2000

U.S.                 38.5%
Russia               13.8%
Major W. European    26.4%
China                 4.7%
All Others           16.6%

2001-2004

U.S.                 41.7%
Russia               17.3%
Major W. European    20.1%
China                 1.9%
All Others           18.9%

Note: Table made from pie chart.

Chart 3. Arms Transfer Agreements with Developing Nations
(supplier percentage of value).

U.S.                 43.1%
Russia               28.1%
Major W. European     5.5%
China                 2.1%
All Others           21.2%

U.S.                 31.6%
Russia               27.1%
Major W. European    22.0%
China                 2.8%
All Others           16.5%

Note: Table made from pie chart.

Chart 5. Arms Transfer Agreements with Near East
(supplier percentage of value)

1997-2000

All Others           11.1%
China                 4.1%
Major W. European    17.8%
Russia                5.9%
U.S.                 61.1%

2001-2004

U.S.                 65.9%
All Others            8.1%
China                 2.8%
Major W. European    14.0%
Russia                9.1%

Note: Table made from pie chart.

Chart 6. Arms Transfer Agreements with Developing Nations
in Asia (supplier percentage of value)
(exclude Japan, Australia, and New Zealand)

U.S.                 19.5%
Russia               36.9%
Major W. European    24.9%
China                 7.4%
All Others           11.3%

U.S.                 21.3%
Russia               48.1%
Major W. European     9.7%
China                 3.7%
All Others           17.2%

Note: Table made from pie chart.

Regions Identified in Arms Transfer Tables and Charts

Asia               Near East              Europe

Afghanistan        Algeria                Albania
Australia          Bahrain                Armenia
Bangladesh         Egypt                  Austria
Brunei             Iran                   Azerbaijan
Burma (Myanmar)    Iran                   Belarus
China              Israel                 Bosnia/Herzegovina
Fiji               Jordan                 Bulgaria
India              Kuwait                 Belgium
Indonesia          Lebanon                Canada
Japan              Libya                  Croatia
Kampuchea          Morocco                Czechoslovakia/
(Cambodia)         Oman                     Czech Republic
Kazakhstan         Qatar                  Cyprus
Kyrgyzstan         Saudi Arabia           Denmark
Laos               Syria                  Estonia
Malaysia           Tunisia                Finland
Nepal              United Arab Emirates   France
New Zealand        Yemen                  FYR/Macedonia
North Korea                               Georgia
Pakistan                                  Germany
Papua New Guinea                          Greece
Philippines                               Hungary
Pitcairn                                  Iceland
Singapore                                 Ireland
South Korea                               Italy
Sri Lanka                                 Latvia
Taiwan                                    Liechtenstein
Tajikistan                                Lithuania
Thailand                                  Luxembourg
Turkmenistan                              Malta
Uzbekistan                                Moldova
Vietnam                                   Netherlands
                                          Norway
                                          Poland
                                          Portugal
                                          Romania
                                          Russia
                                          Slovak Republic
                                          Slovenia
                                          Spain
                                          Sweden
                                          Switzerland
                                          Turkey
                                          Ukraine
                                          United Kingdom
                                          Yugoslavia/Federal
                                          Republic (Serbia/Mont.)

Africa                     Latin America

Angola                     Antigua
Benin                      Argentina
Botswana                   Bahamas
Burkina Faso               Barbados
Burundi                    Belize
Cameroon                   Bermuda
Cape Verde                 Bolivia
Central African Republic   Brazil
Chad                       British Virgin Islands
Congo                      Cayman Islands
Cote d'Ivoire              Chile
Djibouti                   Colombia
Equatorial Guinea          Costa Rica
Ethiopia                   Cuba
Gabon                      Dominica
Gambia                     Dominican Republic
Ghana                      Ecuador
Guinea                     El Salvador
Guinea-Bissau              French Guiana
Kenya                      Grenada
Lesotho                    Guadeloupe
Liberia                    Guatemala
Madagascar                 Guyana
Malawi                     Haiti
Mali                       Honduras
Mauritania                 Jamaica
Mauritius                  Martinique
Mozambique                 Mexico
Namibia                    Montserrat
Niger                      Netherlands Antilles
Nigeria                    Nicaragua
Reunion                    Panama
Rawanda                    Paraguay
Senegal                    Peru
Seychelles                 St. Kitts & Nevis
Sierra Leone               St. Lucia
Somalia                    St. Pierre & Miquelon
South Africa               St. Vincent
Sudan                      Suriname
Swaziland                  Trinidad
Tanzania                   Turks & Caicos
Togo                       Venezuela
Uganda
Zaire
Zambia
Zimbabwe