Russian arms bazaar

Money talks: Currently world's No. 4 weapons merchant, Moscow hopes to move to second spot.

April 21, 2000

THE LUCRATIVE business of arms sales, which accounts for a huge chunk of U.S. exports, has now captured Moscow's imagination. It is currently the world's No. 4 weapons merchant, but within the next three years hopes to bypass Britain and France and begin to move in on the United States.

This aggressive sales campaign can be traced to acting Russian President Vladimir Putin, who wants to diversify exports beyond oil. In recent weeks, he has sent emissaries to weapons shows from Malaysia to Chile. Unlike Washington, Moscow cannot offer liberal credits or sweetheart contracts to parts suppliers in buyer countries. It does have a trump card, though: rock-bottom prices.

India was among Moscow's big arms clients in Soviet times and continues to buy cut-rate weapons. China also sees value in Russian-made fighter bombers (and a license to manufacture them), submarines and destroyers, plus air defense systems. And recently, Malaysia announced it would replace its aging U.S. naval helicopters with modern Russian choppers.

Russian official arms exports last year amounted to a relatively modest $3.5 billion, a hefty increase over $2.5 billion the year before. However, those figures tell only part of the story because Moscow often barters weapons for goods it needs -- from high technology to food staples.

The United States is in a poor position to lecture Moscow about the dangers of arms proliferation. But as sales rivalry increases, so do risks and tensions.

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