ABSTRACT
After rapid growth in the 1970s, the volume of arms transfers reached its highest level since the Second World War in the early 1980s. This was the period of major East–West tensions, culminating in the early-Reagan years where the USA under President Ronald Reagan decided to out-compete the communist bloc, resulting in thriving US trade with European North Atlantic Treaty Organization (NATO) allies as well as other allies (e.g. Japan and Australia), trade between European NATO allies, supplies from the Soviet Union to Warsaw Pact allies and imports by neutral European countries. East and West clashed militarily by proxy in different regions (e.g. Angola, Ethiopia-Somalia and Afghanistan), resulting in other extensive flows of arms. Also, other conflicts and tensions, particularly the Iran–Iraq War, which had a wider impact on Middle Eastern levels of armament, as well as the continuing Arab–Israeli and India–Pakistan conflicts, pushed up the demand for arms (SIPRI database; SIPRI Yearbook). In the late-1980s, that is before the Cold War had officially ended, the level started to decrease, but the most pronounced dip can be seen in the period from 1989 to 1995. A few subsequent years of growth were largely related to the People’s Republic of China emerging as an arms market and the military modernization of other states in Asia, as well as ongoing modernization in the Middle East, where Iraq and Iran were perceived as threats by rich oil-exporting Gulf countries. The 1997 financial crisis that mainly hit Asia and the slump in oil prices saw another downward trend. New economic growth, higher oil prices and realignment of the defence policies of European countries were the main reasons for increased arms trade after 2000.
