UAE, Saudi among US's top arms buyers in 2009

HIGH DEMAND: Arms' demand is booming, fed in part by regional tensions fanned by missile programs in Iran and North Korea. (Getty Images - for illustrative purposes only)

U.S. government-to-government arms sales rose 4.7 percent to a record $38.1 billion last year, and are expected to total almost as much in 2010, the Pentagon agency that administers them said on Friday.

The top buyers in fiscal 2009 were the UAE ($7.9bn), Afghanistan ($5.4bn) and Saudi Arabia ($3.3bn), followed by Taiwan ($3.2bn), Egypt ($2.1bn), Iraq ($1.6bn), NATO ($924.5m), Australia ($818.7m) and South Korea ($716.6m).

Demand is booming, fed in part by regional tensions fanned by nuclear and ballistic missile programs in Iran and North Korea.

In September, for instance, the Pentagon told Congress of a possible sale to Turkey of the most modern model of its Patriot anti-missile missile in a package valued at up to $7.8bn.

The Gulf states and Saudi Arabia are "extremely worried about Iran's pursuit of a nuclear weapons capability," Alexander Vershbow, US assistant secretary of defense for international security affairs, told reporters last month.

"They want to buy Patriots or other systems over the coming years. So right now, demand exceeds supply because of the real sense of threat they feel," he said.

Arms deals, often sensitive because of regional politics, may become even more so for the administration of President Barack Obama, who won the 2009 Nobel Peace Prize last month.

Some critics say Obama should rein in arms transfers, partly to avoid regional arms races. But overseas sales are increasingly important to US contractors seeking to offset Pentagon belt-tightening at home.

Many if not most of the sales pacts signed in fiscal 2009, which ended Sept. 30, are part of a boom in conventional weapons sales that started under former president George W. Bush.

The 2009 figures represent over a quadrupling from a sales "low point" in fiscal 1998, according to Vice Admiral Jeffrey Wieringa, head of the Defense Security Cooperation Agency.

The sales are indicative of a drive to strengthen U.S. partners and thus boost U.S. national security, Wieringa said in an Oct. 22 blog posting on his agency's website.

The 2009 tally, revised after that posting, were up from $36.4 billion in fiscal 2008 and $23.3 billion in 2007, said the security agency. It administers the Pentagon's Foreign Military Sales program, a key part of U.S. alliance-building.

Sales are expected to top $37.9 billion in fiscal 2010, which began Oct. 1, Vanessa Murray, an agency spokeswoman, said in a written reply to Reuters.

Rachel Stohl, co-author of a new book, The International Arms Trade, said Obama, who took office on Jan. 20, seems to be sticking with "the Bush administration mantra of sell, sell, sell, rather than a more cautious approach."

William Hartung of the New America Foundation, a Washington-based research group focused on U.S. defense and foreign policy issues, said Obama should pay more attention to regional arms-race dangers, human-rights records and shun sales to countries that can ill-afford them.

Top U.S. arms makers such as Lockheed Martin Corp, Boeing Co, Northrop Grumman Corp, General Dynamics Corp and Raytheon Co are hoping to boost foreign sales to hedge against U.S. budget pressures that could slow big-ticket Pentagon arms purchases.

Overseas sales lower the unit price of U.S. armed forces' weapons and keep components available that would be otherwise hard to find, said Remy Nathan of the Aerospace Industries Association, which lobbies on behalf of U.S. arms makers.

Other big sales could come from the "best market in decades" for fighter aircraft, with multibillion competitions under way or planned in India, Brazil, South Korea, Japan, Greece and elsewhere, said Richard Aboulafia of the Teal Group, an aerospace consultancy.

Worldwide arms sales totaled $55.2 billion in calendar 2008, a decrease of 7.6 percent from 2007 and the lowest total since 2005, the nonpartisan Congressional Research Service said in a September report.

The United States accounted for $37.8 billion of the total on a calendar year basis, or a lopsided 68.4 percent, up sharply from $25.4 billion in 2007, said the report by Richard Grimmett.

Italy ranked a distant second with $3.7 billion in signed weapons deals, or 6.7 percent of the total, up from $1.2 billion in 2007, the study showed, followed by Russia with contracts valued at $3.5 billion, down from $10.8 billion in 2007. (Reuters)

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