December 30, 2007: Russia exported $8
billion worth of weapons this year, as they predicted they might earlier this
year. These exports have been growing rapidly during the last few years. In
2005 Russian arms exporters had already booked orders for six billion dollars
worth of sales per year through 2008. In 2004, Russian arms sales were $5.6
billion, and that went to $6 billion in 2005 and $7 billion in 2006. Russian
arms sales have been rising sharply (they were $4.3 billion in 2003), as the
economies of their two biggest customers (India and China) grow larger. That,
and the escalating price of oil (driven largely by increased demand from China
and India), has sent international arms sales from $29 billion in 2003, to over
$50 billion by 2006. Oil rich countries, particularly those in the Persian
Gulf, as eager to buy more weapons, with which to defend their assets.
The United States and Russia are the largest
exporters of weapons, together accounting for over 70 percent of world sales.
Traditionally, the U.S. sold nearly three times as much as Russia, but lately
that is getting closer to only twice as much. The reason is, more effort by the
Russians to not just sell on price, but also on service and warranties. Most of
the cost of a new weapon comes during the lifetime (often a decade or more) of
use. In the past, Russia had a bad reputation for support, and lost a lot of
those "after-market" sales. The U.S. was much better in that respect,
but much more expensive. Now the Russians not only have the price advantage
(often half, or less, the cost of equivalent American weapons), but an
improving reputation for providing good service. The Russians are also selling
more high tech, and expensive, warships. For many years, warplanes comprised
about two thirds of Russian sales, but now, about half the sales were for
warships.
