By Andrea Shalal-Esa
WASHINGTON (Reuters) - Weapons sales by the United States tripled in 2011 to a record high, pumped up by $33.4 billion in sales to Saudi Arabia, but the international arms market is not likely to continue growing, according to a comprehensive new congressional report.
The United States sold $66.3 billion of weapons overseas in 2011, accounting for nearly 78 percent of all global arms sales, which rose to $85.3 billion in 2011, the highest level seen since 2004. The previous U.S. record was set in 2008, when arms sales reached $38.2 billion, measured in 2011 dollars.
"The extraordinary total value of U.S. weapons orders in 2011 distorts the current picture of the global arms trade market," said the report by the nonpartisan Congressional Research Service, calling $66.3 billion in U.S. arms sales "a clear outlier figure."
While Washington remained the world's leading arms supplier, nearly all other major suppliers, except France, saw declines in 2011, according to the annual report prepared for Congress.
France signed arms sales valued at $4.4 billion in 2011, up from $1.8 billion a year earlier, but Russia, the world's number two arms dealer, saw its sales nearly halved to $4.8 billion in 2011. The four major European suppliers -- France, the United Kingdom, Germany, and Italy -- saw their collective market share drop to 7.2 percent in 2011 from 12.2 percent a year earlier.
Saudi Arabia was the biggest arms buyer among developing countries, concluding $33.7 billion in weapons deals in 2011, followed by India with purchases of $6.9 billion and the United Arab Emirates with $4.5 billion.
Total annual global arms sales ranged between $42 billion and $67 billion in the period from 2004 to 2011, reaching a cumulative total of $467.9 billion in that 8-year period.
A weaker global economy, the European financial crisis and the slow international recovery from the recession of 2008 have dampened demand for new weapons, with many countries putting off or scaling back their purchases, the report found.
The report said some countries were focused more heavily on upgrading existing systems and support services, which remained "a rather lucrative" sector for weapons suppliers.
Washington, for instance, generates a steady stream of orders for upgrades, spare parts, ammunition and support services from year to year, even when it does not conclude big deals for new weapons systems, the report said.
Concerns about Iran continued to fuel arms sales to the Middle East and especially Saudi Arabia and the United Arab Emirates, but India, Taiwan and other Asian countries were important arms buyers as well, said the report, written by Richard Grimmett and Paul Kerr.
The report predicted increasingly intense competition between European nations and the United States for a small number of global orders in coming years.
It also noted that developing countries were demanding greater cost offsets in their arms contracts, access to more advanced technology and provisions allowing them to produce some weapons at home.
Key U.S. weapons sales in 2011 included:
- $33.4 billion to Saudi Arabia for 84 Boeing Co F-15 fighters, dozens of helicopters built by Boeing and Sikorsky Aircraft, a unit of United Technologies Corp,
- $3.49 billion for Lockheed Martin Corp's Terminal High Altitude Area Defense, an advanced missile shield, to the United Arab Emirates, and $940 million for 16 Chinook helicopters built by Boeing,
- $1.4 billion for 18 F-16 fighter jets built by Lockheed Martin,
- a $4.1 billion agreement with India for 10 C-17 transport planes built by Boeing,
- and a $2 billion order by Taiwan for Patriot antimissile batteries.
(Editing by Leslie Gevirtz)
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