This paper reviews recent trends in arms trade using data from various publicly available statistical sources, and discusses the financing of arms trade. While the sharp decrease in global arms trade between 1988 and 1994 was followed by an upturn in 1995, global arms trade in 1995 in constant prices was less than half of the level in 1988. The bulk of the decrease in exports was accounted for by the sharp decline in the level of arms exports by the former Soviet Union/Russia.This was mirrored by a sharp decline in arms imports by countries that had been major importers from the former Soviet Union during the Cold War. The level of arms deliveries by the three other largest suppliers—the United States, the United Kingdom, and France—decreased only marginally in real terms.
Although arms transfer agreements for future deliveries have also generally been on a declining trend since 1988, other factors suggest that the volume of arms trade is not likely to decrease further in the near future. Following the decline in military assistance by major arms suppliers, the terms on the financing of arms trade have become increasingly important to both exporters and importers, but little information on these terms is publicly available.
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