PROSPECTS FOR CONVENTIONAL ARMS TRANSFER RESTRAINTS IN SOUTHEAST ASIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80T00942A001000020001-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 27
• Document Creation Date: December 14, 2016
• Document Release Date: January 6, 2003
• Sequence Number: 1
• Publication Date: May 1, 1979
• Content Type: PAPER

National
&WIS'For Release 2003/01/30: CIA-RDP80T00942AO01000
Assessment
Center
Prospects for Conventional
Arms Transfer Restraints
In Southeast Asia
Secret
Secret
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PA 79-10206
May 1979
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 National Secret
of fill8r Release 2003/01/30: CIA-RDP80T00942AO01000
Assessment 25X1
Center
Prospects for Conventional
Arms Transfer Restraints
in Southeast Asia (u)
A Research Paper
Research for this report was completed
on 31 January 1979.
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Secret
PA 79-10206
May 1979
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 Secret
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Prospects for Conventional
Arms Transfer Restraints
In Southeast Asia (u)
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Key Judgments Although arms sales to the nine Southeast Asian states in recent years have
consistently accounted for only a very small percentage of the global weapons 25X1
traffic, political and ideological competition divide the region into rival
supplier-recipient groups and present a significant obstacle to establishing
broad and effective restraints on conventional arms transfers (CAT).
Reinforced by recent developments, Soviet domination of the Indochina
arms market is likely to persist for some years to come, while traditional US
domination of the arms market to the countries of the Association of
Southeast Asian Nations (ASEAN), on the other hand, is likely to be
increasingly challenged by other non-Communist suppliers.
While there is currently no arms race-and little chance of conflict-
between the ASEAN and Indochina states, the emergence of a new and pro-
Vietnam regime in Kampuchea has had a significant impact on ASEAN
perceptions of Sino-Soviet rivalry and Vietnamese ambitions in the region.
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Although the extent to which the ASEAN states translate their heightened
concern into accelerated purchases of sophisticated weapons will probably
be limited by both budgetary and doctrinal constraints, they are likely to be
more reluctant than ever to accept restrictions on their freedom to acquire
any arms that they believe they need. In any event, it seems certain that the
ASEAN states would. not accept CAT controls without the full participation
of the Soviet Union, China, and Vietnam. 25X1
For its part, the USSR might view discussions of CAT restraints in
Southeast Asia as an opportunity to exploit conflicts of interest between
China and the West or among Western arms suppliers. Nonetheless, it
almost certainly would be unwilling to engage in such a dialogue unless it
was sure that it could protect its special interests in Vietnam, Laos, and
Kampuchea.
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Pragmatic calculations of self-interest also seem likely to predispose China,
the Indochina states, and many Western and less developed country (LDC)
arms suppliers to view the prospect of an effective system of CAT restraints
in Southeast Asia with suspicion. Consequently, it seems very unlikely that
any such system will be proposed or discussed unless the United States takes
the lead.
Even with US sponsorship, the chances for successfully negotiating and
implementing a Southeast Asian CAT restraint system would be remote. At
the same time, the very fact of US sponsorship or active support of such an
initiative could have an adverse impact on US relations with members of the
ASEAN grouping by raising new doubts about the strength of the US
commitment to their security.
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Key Judgments
iii
The Setting
Motives for Buying Arms
1
Supply of Arms
2
Conditions Influencing Possible Arms Restraints
2
Implications for the United States
A. Dynamics of Arms Transfer to the Region
5
B. Receptivity to Voluntary CAT Restraints
11
C. Statistical Data Tables
17
1. Arms Sales to Southeast Asia (1975-78)
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I
This study was originally scheduled for publication in
early 1979. Following the outbreak of large-scale
hostilities in Indochina in late December 1978, the
original draft was revised to consider the political and
military impact of the initial phases of the fighting.
The continuation and widening of the conflict, how-
ever, necessitated imposing an arbitrary cutoff date for
further research of 31 January 1979. The discussion
thus takes account of the immediate consequences and
longer term implications of the Vietnamese invasion of
Kampuchea but not of the subsequent Chinese punitive
attack on Vietnam.
Despite the altered politico-military environment in
Southeast Asia we feel the basic judgments advanced
in the study remain valid. Indeed, its assessments of
the attitudes and policies of the non-Communist
ASEAN states with respect to arms control have in
large part been validated by the reactions of those
countries to the conflicts among their Communist
neighbors.
Over the longer term, expansion of the Soviet Union's
military presence and political stake in Vietnam may
prove to be one of the most significant consequences of
the hostilities in Indochina. While the Soviet response
to China's attack on Vietnam fell short of military
intervention (and while Vietnam has made a point of
claiming it "defeated" the Chinese invading force
without Soviet assistance), Moscow took advantage of
China's actions to justify a buildup of its naval
presence in the Southeast Asian region and to
strengthen its position in traditionally independent-
minded Vietnam. As in the case of the reactions of the
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ASEAN states, however, the implications of these
relatively recent developments are consistent with the
analysis in this study. In fact, they tend to reinforce the
judgment that Moscow would not support the estab-
lishment of a regional arms control regime in South-
east Asia unless it was convinced that the arrangement
under consideration would not restrict its freedom of
action with respect to Vietnam and probably to
Kampuchea and Laos.
The principal objectives of this paper are:
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? To project the arms transfer process in Southest Asia
over the past few years into clearer political and
economic perspective.
? To identify and weigh the security concerns and the
political and economic conditions that are likely to
determine the degree to which individual Southeast
Asian countries-and leading extraregional arms sup-
pliers-will be willing to cooperate in restraining arms
transfers in the months and years ahead.
? To gauge the implications of these conclusions for
US policies and interests.
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The analysis and conclusions of the paper that follows
are elaborated in two detailed annexes that examine
the dynamics of conventional arms transfers to South-
east Asia, and the receptivity of both supplier and
recipient states to voluntary restraints on such trans-
fers.
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Arms Sales to Southeast Asia (1975-78)
Total Value and Supplier Percentages*
Burma
(55.9)
FRG 1
Jordan 3
Taiwan 1
Laos
(12.6)
Singapore
(243.5)
Indonesia
US 30 (854.5)
Malaysia
(261.0)
Other 2
Indonesia 2
Yugoslavia 1
France 3
UK10
Thailand
(682.2)
Kampuchea
(14.1)
Philippines
(323.5)
Vietnam
(303.0)
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Other 2
Singapore 1
Japan 2
Israel 2
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Prospects For Conventional
Arms Transfer Restraints
in Southeast Asia (u)
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By historical and political definitions, Southeast Asia
consists of the five members of the Association of
Southest Asian Nations (ASEAN)-Indonesia, Ma-
laysia, the Philippines, Singapore, and Thailand-the
three Indochina states-Kampuchea, Laos, and Viet-
nam-and Burma. Most are "poor," that is, lesser
developed countries (LDCs); only Malaysia and Sin-
gapore are classified by per capita GNP standards as
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the total transfers. The United States dominated the
ASEAN market (54 percent), while the Soviet Union
dominated the Indochina market (92 percent). Other
suppliers-mainly West European nations, Israel,
Australia, and several LDCs to the ASEAN states,
and China to the Indochina states-provided smaller
amounts of military assistance and equipment on cash
or credit terms. For the near future, arms transfers will
probably continue to flow along already established
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Since the victories of Communist governments in
Indochina in 1975, the region has been divided
ideologically into non-Communist (ASEAN and
Burma) and Communist regimes. Nonetheless, there
has been no major armed conflict between the two
groups, and political differences have been resolved by
accommodation and cooperation. There are, however,
armed insurgencies or resistance movements operating
in both Communist and non-Communist states and
several of these receive limited assistance from exter-
nal sources. Within ASEAN, the member states have
eschewed the use of arms to resolve disputes.
Despite the small volume of arms sales to Southeast
Asia and the absence of an arms race among the
recipient or the supplier states, political and ideo-
logical competition divides the region into rival
supplier-recipient groups and presents significant ob-
stacles to establishing broad and effective restraints on
conventional arms transfers (CAT). The extent to
which arms restraints win the voluntary cooperation of
the regional and other states concerned will depend on
the nature and strength of the motives driving both
suppliers and recipients, the nature of such restraints,
and the manner in which they are negotiated and
The In oc ma
states, however, continue to play out historic and
ethnic animosities among themselves through warfare
despite an ostensibly common ideology.
Trade in conventional arms has been relatively less
active in Southeast Asia than in other regions, but is
growing steadily in both volume and number of
suppliers. Total arms sales and assistance to the nine
Southeast Asian states during the period 1975-78
amounted to approximately $2.8 billion, or 3.5 percent
of total world sales over that four-year period.' The five
members of ASEAN received 84 percent, the three
Indochina states 14 percent, and Burma 2 percent of
Motives for Buying Arms
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Recipient states buy-and produce-arms for complex
reasons involving internal security against insur-
gencies, national prestige and pride, self-reliance and
independence from foreign sources, and defense
against external threats. With respect to the last-
mentioned concern, there is currently little chance of
major armed conflict between the two groupings
of arms recipients-the ASEAN nations and the
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l'he emergence of a new and pro-Vietnamese regime in
Kampuchea has, however, had a significant impact on
ASEAN perceptions of Sino-Soviet rivalry and of
Vietnamese ambitions in the region-largely by con-
firming suspicions that Vietnam cannot be trusted.
Some ASEAN states-Malaysia and Indonesia-have
responded to the Vietnamese invasion of Kampuchea
by formulating plans for rapid improvement and
increase of their armed forces, but the ASEAN states
are not likely to react to it by arming themselves
heavily or by forming a mutual defense pact. Nonethe-
less, over the longer term, this development adds
pressure on these nations to continue to buy arms and,
possibly, to accelerate their purchase schedules. The
volume and sophistication of these arms purchases will
be constantly constrained, however, by supply and
budgetary restrictions.
Although they have always been suspicious of the
ASEAN nations' relationship with the United States,
the three Indochina states do not consider the ASEAN
states a serious military threat. Their main reasons for
acquiring arms have been to build military capabilities
against internal security threats, against each other, or
against China. Vietnam and Laos will continue to
receive military assistance, possibly of increasingly
higher sophistication and volume, from the USSR. The
new regime in Kampuchea will benefit indirectly from
Soviet assistance to Vietnam.
Considerations of national security, prestige, or
economic advantage, as well as the wish to expand
political and economic leverage, are among the most
common motives for developing and sustaining arms
exports. Strategic concerns are of relatively minor
importance in motivating arms sales to the ASEAN
states but they are a factor of growing importance in
Soviet assistance to Vietnam
West European and LDC arms suppliers to the
ASEAN states have indicated growing interest in
expanding relations-and arms sales-to this market.
Specific problems with US sales restrictions and
general dissatisfaction with the high cost and
unreliability of the US supply line have motivated the
ASEAN countries to shop elsewhere. ASEAN deci-
sions to buy more from non-US suppliers could
enhance the potential for competition among these
suppliers for the US share of the market.
Conditions Influencing Possible
Arms Restraints
The implicitly hostile division of supplier-recipient
relationships into rival groups would, on the one hand,
make it essential that all participate in an arms
restraint system if it is to succeed and, on the other
hand, make it difficult. to reach an agreement on broad
and effective CAT curbs in Southeast Asia. This
problem has several components:
? While the non-Communist suppliers-the West Eu-
ropean nations and the LDCs-might be persuaded to
agree to some form of restraint, the intensity of the
Sino-Soviet rivalry in the region would make it
difficult, to say the least, for both China and the USSR
to reach an agreement on CAT controls.
? With the recent imposition by Hanoi of a pro-
Vietnamese--and by extension pro-Soviet-regime in
Kampuchea, China has lost its closest ally in Southeast
Asia and an important battle in its efforts to curtail
Soviet influence in Indochina. Although China is not
currently a major arms supplier to the region (it is the
sole supplier of arms to Kampuchea), it is considered a
major power and would have to be included in any
negotiations on restraining arms sales.
? The USSR might be willing to discuss CAT re-
straints in Southeast Asia if it can protect its special
interests in Vietnam, Laos, and Kampuchea, and if it
sees an opportunity to exploit conflicts of interest
between China and the West or among Western arms
suppliers. Under such conditions, however, CAT nego-
tiations would be meaningless.
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? Vietnam's attitude toward CAT controls will be
influenced by both its own and Soviet interests. Despite
its friendship and cooperation treaty with the USSR
Hanoi has attempted to maintain a degree of inde-
pendent action and would probably be reluctant to
restrict its ability to acquire arms from either the
Soviets or other suppliers.
? The ASEAN states would not accept CAT controls
without the full participation of the Soviet Union,
China, and Vietnam.
It is extremely unlikely that a system for Southeast
Asian CAT restraints will be proposed or discussed
unless the United States takes the lead.. Even then, the
chances of negotiating and implementing a CAT
restraint system in Southeast Asia are small. A
supplier-recipient agreement to reduce transfers of
conventional arms to Southeast Asia would depend not
only on the voluntary participation of both suppliers
and recipients but also on the mechanics by which it
might be negotiated and implemented. In the case of
Southeast Asia, the motives driving both suppliers and
recipients present significant obstacles to establishing
broad and effective regional curbs. The implicitly
hostile division of supplier-recipient relationships into
Communist and non-Communist groups of states
would, on the one hand, make it essential that all
participate and, on the other, make it diifficult to
negotiate an agreement.
At present, the major implication for US policy of a
proposal for restraining conventional arms transfers in
Southeast Asia lies in its potential impact on Washing-
ton's relations with the ASEAN countries. Gaining a
sympathetic hearing by the ASEAN states on arms
matters will depend not only on the substance of the
proposed restraints, but also on the manner in which
the proposal is presented and the extent to which the
respective governments are consulted during the pro-
cess. The five ASEAN states would probably oppose
any restrictions on their abilities to improve the quality
of their forces in accordance with their own percep-
tions of their requirements for individual and collective
self-defense, but they might be inclined to support
controls on the introduction of highly sophisticated or
clearly provocative types of weapons to the region-
largely because none of them currently plans to acquire
such weapons.
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Their preference for relying on the United States, not
only for arms but also for political and security
support, their general dislike of the USSR, and their
desire not to antagonize Vietnam (which has the
largest military establishment in Southeast Asia) or
China (whose intentions they suspect) would make the
ASEAN states especially sensitive to extrare Tonal
initiatives without close prior consultation.
In the long run, a US-initiated or sponsored proposal t 025X1
restrict arms sales to Southeast Asia could have the
adverse impact of straining relations with the ASEAN
group. Military assistance from the United States has
long been regarded by the ASEAN states as a key
symbolic barometer of US concern for their security
and, by implication, for regional stability. US security
assurances have helped to obviate the need for these
nations to depend on alternate sup liers or to maintain
large arms inventories. 25X1
During the past few years, however, the ASEAN
governments have voiced an uncertainty about the US
concern for their security, and about US military
capabilities (particularly naval forces) in the region.
While the ASEAN states clearly prefer US equip-
ment, they have already demonstrated a readiness to
turn to other suppliers and to undertake local produc-
tion. Under these circumstances, attempts to place
restraints on arms sales, particularly if initiated or
sponsored by the United States, could further under-
mine confidence in Washington's reliability and could
motivate these states to increase their arms purchases
generally and to rely more heavil on n -US sources
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Dynamics of Arms Transfers
To the Region
Trends and Patterns in Southeast
Asian Arms Transfers
Total arms sales and assistance to the nine Southeast
Asian countries during the period 1975-78 was ap-
proximately $2.8 billion, excluding all US assistance to
the Indochina states in 1975.2 This is about 3.5 percent
of the world total of $80 billion. The volume of arms
purchases by the five ASEAN states jumped in 1975-
76, as a result of concern over the emergence of
Communist govenments in Indochina, but appears to
have fallen off in 1977-78. Arms transfers to the
Indochina states by Communist suppliers declined over
the period 1975-78, but probably increased somewhat
in late 1978 as China and the USSR assisted their
respective allies in the Kampuchea-Vietnam conflict.
The five ASEAN members accounted for about 84
percent of total arms purchases by the nine Southeast
Asian states during the period 1975-78. Within
ASEAN, Indonesia bought the most, and Singapore
the least. Much of the earlier arms transfers to
ASEAN countries were in the form of grant assist-
ance, but since 1975 the proportion purchased on cash
or credit terms by ASEAN governments has increased.
Most of the spending has been for small arms,
ammunition, quartermaster gear, and tanks. Several of
the ASEAN states, however, have acquired more
sophisticated and high-priced equipment, including
fighter aircraft and fast patrol boats equipped with
guided missiles.
The Indochina states together accounted for about 14
percent of total arms sales and assistance to Southeast
Asia during the period 1975-78. Vietnam was the
major recipient, despite its takeover of the large
arsenal of weapons left in South Vietnam by the
United States. Vietnam's arms imports, including
MIG-19 and MIG-21 aircraft, have been acquired
mostly through the Soviet military assistance pro-
grams.
' See Annex C, tables 1-3.
Future patterns and trends in Southeast Asian arms
acquisitions will be influenced by the final outcome of
the armed conflict between Vietnam and Kampuchea,
which has already resulted in the replacement of a pro-
Chinese Kampuchean Government with a pro-Viet-
namese and, by extension, pro-Soviet, regime in
Kampuchea. Soviet assistance to Vietnam will prob-
ably increase following the conclusion of a friendship
and cooperation treaty between the two countries.'
China suspended all military and economic assistance
to Vietnam in mid-1978, while continuing to provide a
small amount of assistance to Kampuchea. China
currently is not an arms supplier to any Southeast
Asian nation, although it is supporting remnants of the
former Pol Pot Kampuchean regime that are engaging
in guerrilla resistance. F_ I 25X1
The ASEAN nations, and Thailand in particular, are
concerned over the establishment of a Vietnamese-
controlled regime in Kampuchea that could threaten
Thailand directly and the other four member states
indirectly. This concern will undoubtedly translate into
continued demands for arms, but overall spending by
the ASEAN nations will probably not increase sharply
in response. An arms race between ASEAN and the
Indochina states is unlikely, partly because of budget-
ary constraints in the ASEAN nations but largely 25X1
because each group is likely to pursue policies of
detente and cooperation rather than military force as a
way of deterring aggression from the other.
During the period 1975-78, the United States was the
dominant supplier in the Southeast Asian arms mar-
ket. The US share of the nine-country Southeast Asian 25X1
market was 46 percent-compared to that of the next
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A more meaningful comparison, however, is between
suppliers to either the five ASEAN nations or to the
three Indochina states, because the major suppliers
have sold almost exclusively to one group or the other.`
The US share of sales to the ASEAN states (54.3
percent) was substantially higher than that of its
nearest competitor, the Netherlands (7.4 percent). The
remainder was supplied by other West European
countries, Israel, Australia, and some LDCs. Within
the region, Singapore has also become a supplier,
capturing .2 percent of the ASEAN market with sales
to Thailand, the Philippines, and Indonesia. The Soviet
Union supplied 92 percent of Indochina's military
assistance, with China furnishing 5.6 percent and other
Communist nations 2.4 percent.
who offer comparable equipment on better credit and
delivery terms.'
Motives of Recipients
The ASEAN States
Two major motives underlie most of the arms acquisi-
tions by the ASEAN nations: to maintain internal
security and stability and to develop a limited but
credible defense capability. Like many other Third
World countries, the ASEAN states are concerned
with internal challenges in the form of active
insurgencies and endemic economic and political
instability. The process of modernization is inherently
destabilizing and sometimes releases forces that are
difficult to control. Most ruling elites find their
positions threatened whether or not they succeed in
stimulating development. The line between threats to
themselves and threats to the state is often blurred
because the elites tend to view any threat to their
For the near future, the arms suppliers will probably
continue to deal exclusively with one regional grouping
or the other. The USSR has attempted to penetrate the
ASEAN market, but the five states remain suspicious
of Soviet political and military intentions and have not
placed any orders.' China is not likely to sell to these
states either, not only because of political and ideologi-
cal constraints but because it does not produce the type
of equipment ASEAN wants.
An increasing number of arms suppliers are, however,
attempting to compete and to increase their share of
the ASEAN market. Several ASEAN states that have
relied mainly on US arms in the past have been window
shopping elsewhere in the past year. These include
some-Indonesia, Thailand, and the Philippines, in
particular-that have balked at US sales restrictions,
including human rights reporting requirements. All
the ASEAN states, however, feel that the US supply
line has grown increasingly expensive, cumbersome,
and uncertain. They are seeking alternate suppliers
5 Burma has received arms from both Communist and non-
Communist suppliers, but accounts for only 2 percent of the region's
fi Indonesia's experience with poor-quality Soviet equipment pro-
vided under Soviet military assistance programs in the early 1960s
leadership as a challenge to national security.
Although the ASEAN governments justify the major-
ity of their arms acquisitions by the need to combat
domestic insurgencies. it is apparent that their pur-
chases are motivated at least in part by other
considerations. Much of the equipment presently being
considered or purchased-F-5E fighter planes, fast
patrol boats equipped with guided missiles, sophisti-
cated air defense systems-is clearly not appropriate
for counterinsurgency warfare in the jungle. Moreover,
Singapore, which has consistently spent a higher
percentage---almost 6 percent-of its GNP on defense
than other ASEAN states, has no insurgency problem
0
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The desire to prepare themselves to meet a variety of
internal threats, as well as to bolster national pride,
self-confidence, and prestige, are the primary impulses
behind current ASEAN armed forces modernization
and expansion programs. Military establishments play
dominant political roles in several states and their
interests must be accommodated. In the case of
Indonesia, keeping the military satisfied is also neces-
sary to maintain the morale and status of an institution
deemed vital for social and economic development as
well as for security. Similarly, the civilian government
of the Philippines has acquired weapons as a means of
guaranteeing the loyalty and support of its senior
military officers. Finally, in many of these poor LDCs,
the armed forces are catered to because they provide
employment and thus help to alleviate social and
The ASEAN members have eschewed the use of force
in their relations with each other and with other
regional states. The five countries have forged ties of
economic, political, and military cooperation that have
enabled them to resolve their territorial conflicts
without resorting to arms. The last armed conflict-
between Indonesia and Malaysia-ended. in 1967.
Within the ASEAN group, there is also no hegemonic
aspirant or recognized regional leader! Moreover,
despite their political and economic differences, there
is a genuine appreciation on the part of all five that
they stand or fall together and that cooperation is not
only a cheaper but also a more effective method of
coping with internal ASEAN strains and potential
external enemies.
coordinated and unified.' ASEAN's response to Viet-
nam's invasion of Kampuchea has been unanimous in
deploring the aggression and in reaffirming the soli-
darity and neutrality of the group. These countries are
likely to continue to value their unity and neutrality
and to pursue a two-track policy toward external
threats: conciliatory diplomacy combined with gradual
enhancement of national and collective defense
capabilities.
The ASEAN countries have concentrated on building
up their individual defense capabilities to enable them
to respond to low-level threats and to create over the
long term a credible deterrent to potential external
enemies. Indonesia, for example, realizes that it has
serious gaps in its sea defense and surveillance ability
that have made it difficult to patrol its lengthy
coastline or to control smugglers, pirates, and even
Indochinese refugees. The states bordering the
Malacca Strait-Malaysia, Indonesia, and Singa-
pore-are concerned about possible intimidation by
the fleets of great powers operating through the Strait
and have therefore concentrated on acquiring fast
patrol boats equipped with guided missiles that can be
used effectively against large naval vessels. All have
sought to improve their air defense forces and radar
systems. Furthermore, most ASEAN states are experi-
encing large influxes of Vietnamese seaborne refugees
and the bolstering of naval forces may also be designed
to monitor, control, and repel refugee landings.
'Thailand, now the frontline state, is concerned over Vietnam's long-
term intentions, fearing that Vietnam will expand its support to Thai
Communist insurgents and ultimately try to seize northeast Thai-
land. Singapore, the most vehemently anti-Communist member,
believes that the expanding Soviet military presence and naval power
Perception of an external threat, particularly from in the Pacific and Indian Oceans and in Southeast Asia is the
Vietnam, varies from member to member, but the greatest threat. It focuses on the Soviet hand behind Vietnam's
response, both diplomatic and military, is generally actions but does not feel directly threatened by either. Malaysia and
Indonesia believe that Vietnam is the immediate threat but that
9 Indonesia, by reason of its size, its revolutionary and Third World China is the long-term threat to regional stability; they are
credentials, and its strongly anti-Communist military government, concerned about Chinese intentions toward ASEAN in light of
considers itself the leader in non-Communist Southeast Asia. Other Soviet gains in Indochina. The Philippines feel the least threatened
by Vietnam's invasion of Kampuchea and by Sino-Soviet rivalry in
f
d
i
'
l:n
ones
a
s
ASEAN members, however, remain suspicious o
that they havestrn'~v_r Southeast Asia. It is concerned mainly about possible conflict
historical penchant for expansionism and feel
-..,.,.,...___ i between China and Vietnam or between either and the Philippines
__?,,__,
and
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Nonetheless, compared to LDCs in other regions the
ASEAN governments' requests for military aid or
equipment are not large. Although many of these
states would probably seek more equipment if they had
the money, political-economic priorities and financial
constraints preclude large expenditures for the foresee-
able future. Civilian and military leaders alike recog-
nize that the solutions to problems of insurgency and
instability demand social and economic development
programs in at least equal proportion to military
operations. Hence, their limited financial resources
have been allocated primarily to development, which
reduces significantly the amount available to purchase
arms.
The five states have firmly rejected the idea of a
collective security pact, at least for the time being.'?
Military cooperation among the ASEAN states, in the
form of joint training exercises and counterinsurgency
operations along common borders, has been confined
to bilateral or, at most, trilateral agreements.
Cooperation has expanded, however, and contingency
plans have been suggested whereby Indonesian and
Singaporean troops would be sent to fight in Malaysia
and/or Thailand if the latter were invaded or in danger
of being overthrown by Communist insurgents." There
is still a strong resistance to the idea, however.
Cooperation has also involved a limited degree of
equipment standardization. Indonesia and Singapore
have taken the lead in promoting arms comple-
mentarity-particularly the use of M-16 rifles by all
members-to make mutual assistance easier and arms
purchases more economical. Nonetheless, even though
the ASEAN countries often exchange experiences and
information before purchasing certain equipment, they
do not always take complementarity into consider-
ation. Constrained by a scarcity of funds, the individ-
ual countries often sacrifice standardization for the
best deal they can make. For example, the Indonesians
contemplated purchasing the French Mirage-5 instead
of the US F-5E because they felt the purchase terms
were better, despite the fact that most of the other
ASEAN countries possess the US aircraft.
Motivated partly by doubts about reliability of foreign
suppliers, all of the ASEAN members have considered
working toward individual and regional arms self-
sufficiency through local production. In addition, local
manufacture could alleviate the drain on foreign
exchange reserves caused by purchasing abroad.
The profit possibilities of arms production and export
sales are especially appealing to Indonesia's military
leadership as a means of supplementing military
salaries and financing long-term modernization pro-
grams that cannot be budgeted out of government
revenues. Both Indonesia and the Philippines want to
develop their aviation industries and hope to sell
abroad. Only Singapore currently has the industrial
capacity and financial resources to produce small arms
and ammunition and is expanding its production base
for both its own supply and for export sales. While it is
premature to expect ASEAN arms factories to
produce military goods in sufficient quantities to meet
local needs or to export in the near future, over the long
term the member states will increasingly pursue local
or joint production of small arms and ammunition in
order to generate higher technological know-how, self-
confidence, and additional foreign exchange.
Burma
Like the ASEAN states, Burma's military government
identifies active insurgency as its major national
security concern and motivation for seeking arms. In
recent years, however, Burma has been unable to
obtain the money or credit necessary to modernize its
equipment. It has also been reluctant to rely upon, or to
seek, major foreign military assistance, largely because
it fears an adverse impact on good relations with
China, the only potential source of external threat
Burma perceives.
The Indochina States
Until the outbreak of hostilities between Vietnam and
Kampuchea, internal, not external, threats were the
major motives for the limited amount of arms acquired
during the period 1975-78 by the three Indochinese
states. These internal motives persist but have been
overshadowed by the immediate need to augment
defensive and offensive capabilities.
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While they are suspicious of the ASEAN nations'
relations with the United States, the three Indochina
states do not consider these nations or Burma to be
serious military threats. Rather, their main concerns
have been with each other and with the Chinese or the
Soviets. Deteriorating relations with the Chinese
helped prompt Vietnam to sign a treaty of friendship
and cooperation with the USSR and subsequently to
invade Kampuchea, setting up a pro-Vietnamese
government. Laos, an ally of Vietnam, attempted to
maintain its neutral stance in the Sino-Soviet rivalry,
but recently it has supported Vietnam's actions against
Kampuchea and openly quarreled with China. As
Hanoi's client, the new Kampuchean regime of Hcng
Samrin will benefit indirectly from Soviet assistance to
Vietnam.
Non-Communist
The motives that drive the non-Communist suppliers-
political, security/strategic, and economic-have fluc-
tuated with changes in the regional and international
environment. Earlier US, UK, and Australian military
assistance accompanied formal security alliances and
was designed mainly to meet political and security
objectives, including enhancing local counterinsur-
gency capabilities and cementing political ties with
allies and former colonies.
In the mid-1970s the Cold War atmosphere gave way
to the spirit of detente, thus reducing the strategic
necessity of such regional military pacts as the
Southeast Asia Treaty Organization-the United
States, the United Kingdom, France, Australia, New
Zealand, Pakistan, the Philippines, and Thailand-
and the Five Power Defense Arrangement (FPDA)-
the United Kingdom, Australia, New Zealand, Malay-
sia, and Singapore." In addition, the victory of
Communist regimes in Indochina and the severance of
many former political ties have caused the United
12 SEATO was dissolved in 1977 and the phasing out of FPDA will be
completed by 1980. Under the terms of the 1954 Manila Pact,
however, the United States retains a special consultative relationship
with the Philippines and Thailand should either be in danger of
direct attack. In addition, the Rusk-Thanat Communique provides
for US intervention if Thai security is seriously threatened by an
States and West European suppliers to reexamine the
political and strategic importance of the region,
especially in comparison to such other regions as
Africa and the Middle East. Political motivations,
however, are paramount as reasons for US and
Australian military assistance to the ASEAN states.
West European and other marginal suppliers sell arms
to Southeast Asia mainly for economic reasons. For the
European and non-European suppliers alike, arms
exports help to reduce production costs, realize econo-
mies of scale, recoup research and development costs,
and alleviate general domestic economic concerns by
maintaining or increasing employment. General eco-
nomic conditions in the industrialized countries have
accentuated these motives during the past few years.
Nonetheless, the volume of arms sales to Southeast
Asia has been a relatively small proportion of these
countries' world sales
Communist
Soviet and Chinese arms transfers to Indochina were
designed to thwart US intentions and to win allies.
They are now driven primarily by Sino-Soviet rivalry
and by their own perceptions of the importance of
Southeast Asia to their overall world strategy. The
USSR-Vietnam and USSR-Laos relationships reflect
continued political and security objectives vis-a-vis
China.
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Receptivity to Voluntary
CAT Restraints
Both non-Communist and Communist countries in
Southeast Asia have talked of making the region a
nuclear free zone. However, neither of the zone of
peace plans thus far proposed-Malaysia's "zone of
peace, freedom, and neutrality" (ZOPFAN) and
Vietnam's "zone of peace, genuine independence, and
neutrality" (ZOPGIN)-is presently more than a
vehicle for generating a political and diplomatic
dialogue between the two rival blocs. As such, neither
would present a suitable foundation for a conventional
arms restraint regime. Although both plans contain
similar principles for regional cooperation and call for
an end to great power interference, political and
ideological differences between the ASEAN and
Indochinese countries make agreement on a zone of
peace unlikely."
The ASEAN States
Thus far, the ASEAN nations as a group have not
formally addressed the issue of conventional arms
control. Nonetheless, it is clear that the ASEAN
countries at present perceive no need for a formal
regional agreement to control conventional arms trans-
fers, and it is likely that they would resist efforts to
negotiate one. Most have expressed individual opinions
on disarmament in general, but their emphasis has
been on nuclear-weapons-free zones and on East-West
arms reductions. The three states that are members of
the nonaligned movement-Indonesia, Malaysia, and
Singapore-supported the movement's resolution at
the UN Special Session on Disarmament (SSOD) in
June 1978, which gave priority to control of nuclear,
chemical, incendiary, and mass-destruction weapons
over restraints on conventional arms transfers.
" For additional background, see "ZOPFAN or ZOPGIN-A Zone
of Peace in Southeast Asia?" International Issues Monthly Review,
26 July 1978, RP IIMR 78-006.
Malaysia has been a major spokesman for ASEAN in
UN and nonaligned disarmament forums. It has,
however, been largely concerned with nuclear disarma-
ment and with promoting its initiative for ZOPFAN.
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Philippine participation in a regional arms control
agreement, particularly a US-initiated one, would be
complicated by the presence of US bases in that
country. The Philippine Government has managed
thus far to soften the effects of unilateral US curbs on
conventional arms transfers through exploitation of
Washington's interest in maintaining military bases in
the Philippines. From the Philippines' point of view,
establishment of regional conventional arms transfer
controls would be likely to deprive Manila of at least
some of the benefits it currently derives from its
favorable bargaining position.
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Thailand's statements on arms control have focused on
the proliferation of nuclear weapons and the competi-
tion between the arms-producing superpowers. Thai-
land supported the SSOD declaration but expressed
concern that limiting international arms sales might
affect its ability to purchase weapons for its own
defense and for combating illicit narcotics traffic.
Thailand would be particularly sensitive to US policy
initiatives without close, prior consultation. Thai
officials have expressed resentment, for example, at
the "failure" of the United States to consult with them
on the US-Vietnamese talks in Paris.
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.Singapore produces small arms, ammunition, and
patrol boats for its own use and, increasingly, for
export to other ASEAN members under the guise of
military cooperation. It has a coproduction arrange-
ment with Thailand and is now negotiating one with
Malaysia. Arms sales to Indonesia, the Philippines,
and Thailand amounted to $6.0 million from 1975 to
1978 and accounted for .2 percent of total transfers to
the ASEAN countries. (-Singapore has also sold arms
worth about $1.8 million to Kuwait.) A handicap to the
further expansion of Singapore's arms exports is that
some of the equipment it makes either includes
foreign-made components-such as the Israeli Gabriel
guided missiles on the patrol boats sold to Thailand-
or is manufactured under foreign license. In both
cases, Singapore is required to obtain permission from
another supplier before it can conclude a sale.
Thus far, Singapore is apparently the only Southeast
Asian state willing to examine the possibility of a
conventional arms transfer (CAT) restraint agree-
ment. In his speech during the SSOD general debate,
Singapore's representative acknowledged that all
nations-not just the superpowers-are responsible for
arms races and emphasized that all states must
examine their own conduct critically. He went on to
praise the Latin American regional initiative to control
acquisitions of arms for offensive purposes."
Singapore's willingness to discuss arms control reflects
its sense of extreme vulnerability as a small and
relatively wealthy city-state surrounded by large and
poor countries. Singapore is also better armed, for its
size, than its neighbors and would obviously like to
maintain this status. Its reactions to recent develop-
ments in Indochina suggest, however, that its interest
in CAT restraint may be declining. Less sanguine than
its ASEAN partners about the possibility of tempering
Vietnamese aggression through detente and coopera-
tion, Singapore has begun to talk of ASEAN mutual
security arrangements
The success of any arms control agreement in South-
east Asia would require the full participation of
Indonesia, which is at present the least likely to agree
to restrict its purchase of arms. Political and psycho-
logical factors would make it extremely difficult for
the military government to agree to arms restraints.
Indeed, the necessity of placating junior officers who
are dissatisfied with the slow pace of upgrading
military equipment has caused the Suharto govern-
ment to plan an acceleration of military modernization
programs over the next several years. Nationalist
sentiments, fears of foreign manipulation, and the
military's own sense of pride as a revolutionary force,
would make Indonesia reluctant even to participate in
discussions initiated either by nonregional states or by
other ASEAN members (and Singapore, in particular)
with nonregional support.
Nevertheless, the ASEAN states might be inclined to
support controls on the introduction to the region of
highly sophisticated or clearly provocative types of
weapons-largely because none of them currently
plans to acquire such weapons. They would, however,
probably oppose any restriction on their abilities to
improve the quality of their forces in accordance with
their own perceptions of their requirements for individ-
ual and collective self-defense.
Burma
Burma has traditionally avoided active participation in
regional and international affairs." Neutralist and
nationalist--to the point of isolationism-Burma is
suspicious of everyone, and China in particular.
Because of this distrust and fear, Burma would be
unlikely to participate voluntarily in a regional arms
control agreement. It might be persuaded to cooperate,
however, if Chinese participation and approval were
" to the past, Burma has expressed acceptance of a zone of peace in
the region in principle, but has not specifically endorsed either the
" A commitment undertaken by the eight Latin American signator-
ies of the 1974 Declaration of Ayacucho, and ffirmed in May
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The Indochina States
As a result of conflict with Kampuchea and deteriorat-
ing relations with China, Vietnam discarded its impar-
tial attitude toward the Sino-Soviet dispute in 1978.
While its friendship and cooperation treaty with the
USSR does not require Soviet military intervention in
case of an attack on Vietnam, Hanoi undoubtedly
hoped that the treaty would deter China from taking
strong measures against Vietnam.
In an obvious bid to improve relations with ASEAN as
friction with China intensified, Vietnam ;proposed its
own version of a zone of peace in Southeast Asia at the
SSOD last June. While Vietnam's proposal for a zone
of peace is no closer to implementation than ASEAN's
zone of peace plan it does signify a new willingness to
cooperate and an acceptance of the concept in princi-
ple.
Vietnam's attitude toward regional arms control will
be influenced partly by Soviet interests but largely by
its own perception of its needs. Vietnam is under
pressure from the USSR to provide air and port
facilities to service the Soviet Indian Ocean Fleet, but
it is unlikely to grant unrestricted use of these facilities
in the near future. Vietnam has tried to maintain some
flexibility and lessen its dependence on the USSR by
seeking other sources of economic assistance and by
limiting the Soviet military presence in Vietnam.
Hence, Vietnam would probably be reluctant to accept
a CAT control regime which restricted its ability in the
future to acquire arms from either the Soviets or other
suppliers.
Laos is strongly influenced by Vietnam--and, by
extension, backs the Soviet Union in the Sino-Soviet
dispute. The security of Laos is maintained not only by
its own forces but also by those of Vietnam. Laos has
been a vocal opponent of ASEAN's zone of peace
proposal but has found Vietnam's plan acceptable.
Hence, Laos would be likely to follow the lead of the
Vietnamese on arms control, but might be indirectly
influenced to some degree by Soviet wishes.
Perceptions of Supplier States
USSR
Although the USSR in recent years has sharply
increased its diplomatic and ideological activities in
Southeast Asia, its economic and military involvement
in the region remains relatively modest.
From 1975 to 1978 the USSR accounted for 13
percent of the total value of arms sales to Southeast
Asia as a whole, and 92 percent of sales to the
Indochina states. While this is a considerable percent-
age, Soviet arms transfers to the region steadily
declined during this period and represented less than 2
percent of its worldwide sales. A major reason for the
decline was the end of the Vietnam war and the
capture of $5 billion worth of US military hardware by
Hanoi in 1975. Soviet military assistance to Viet-
nam-the major recipient of Soviet arms-has con-
sisted mainly of replacement parts, fuel, and some new
equipment.
Moreover, in comparison with Western suppliers,
Moscow has fewer established arms customers in
Southeast Asia and less potential for developing
significant new markets in the region. Although the
Soviets will continue efforts to expand their list of
customers-witness their recent offers of military aid
to the Philippines and Indonesia-widespread antipa-
thy toward Moscow, the desire of the ASEAN states
not to get involved in the Sino-Soviet rivalry, and the
ready availability of suppliers that are politically and
ideologically more acceptable suggest that the chances
for expansion of Soviet arms sales in the region are low.
The Soviet involvement in Southeast Asia is rooted in
its broader foreign policy objectives, the most urgent of
which is to limit the growth of China's influence and
power in the region. This policy of countering China is
based on developing a durable and broadly based
relationship with Vietnam. The latter has both sym-
bolic and practical significance to Moscow. For
Moscow, Vietnam is symbolically important because it
is the first state where US "imperialism" has suffered
a defeat by the forces of "national liberation"-aided
by the "world socialist system"-in a direct military
confrontation. Consequently, influence over Hanoi is
Until late 1978, Kampuchea had received Chinese and
East European military assistance in very small
quantities, with China supplying most of it. The
Vietnamese-controlled Heng Samrin regime obviously
will follow Vietnam's lead on arms controls issues.
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of major importance to Moscow in its ideological
rivalries with both China and the West in the Third
World.
On the practical level, the USSR views Vietnam as the
only state in the region capable of providing a military
counterweight to China. Moscow believes that its
establishment of a strong presence in Vietnam by
becoming the main source of economic and military
assistance, coupled with regional suspicions of China's
=rims and traditional anti-Chinese sentiment, will
enable it to use this strong and regionally dominant
Vietnam against China. Soviet leaders undoubtedly
regard Vietnam's membership in the Council for
Mutual Economic Assistance, the signing of a Soviet-
Vietnamese treaty of friendship andcooperation in
early November 1978, and the failure of Deng
Xiaoping's Southeast Asian trip to produce any pro-
Beijing diplomatic breakthroughs as confirming the
wisdom of this aspect of their Southeast Asia policy.
['his assessment points to several obstacles to a
regional arms accord. The Soviets clearly have a strong
political and strategic interest in arms sales as a means
of maintaining their political presence in Vietnam and
Laos. Vietnam's hostilities with China and Kam-
puchea have provided the USSR with further opportu-
nities for drawing Vietnam into a more dependent
relationship. In sum, the USSR's desire to maintain its
7osition as the primary source of Hanoi's power and
Moscow's continuing interest in expanding arms sales
to the non-Communist ASEAN states as a means of
reducing both Chinese and Western influence will
certainly strengthen the USSR's general disinclination
to enter into international agreements to restrain
conventional arms transfers in Southeast Asia.
The only arrangement that the Soviets might support
would be one that established a regional arms ceiling
rather than limiting the amounts of arms sales to
individual countries in the area. Since Vietnam is the
only significant recipient of Soviet arms in the region,
Such an arms transfer restraint arrangement would not
greatly restrict the Soviets' freedom of action in
dealing with Vietnam and would offer them an
opportunity to exploit conflicts of interest among
Western suppliers, who have multiple recipients in the
area, or between China and the West. For example,
China may perceive a US-Soviet regional CAT re-
straint agreement as Western validation of the
longstanding Soviet claim to being a force of stability
in the region.16
In fact, the Soviets would have little to lose by
encouraging such an :arms restraint arrangement. The
USSR's arms sales to Vietnam in 1977 amounted to
$8.4 million, or less than 0.1 percent of its arms sales
worldwide for that year. With poor prospects for a
further significant expansion of arms customers in that
region and with Vietnam in need of additional Soviet
arms despite its possession of a large quantity of usable
US arms, Moscow would probably view the potential
benefit of unrestrained freedom to exploit the arms
market as minimal, at least in the short run. And since
the Western suppliers together sell more arms to more
Southeast Asian customers than does the Soviet
Union, Moscow might. conclude that the West would
bear most of the political and economic cost of regional
arms restraint agreement.
If the Soviets can protect their special interests in
Vietnam, therefore, they might be willing to discuss
Southeast Asian CAT restraints. Their suggestions for
using Vietnam's zone of peace proposal as a possible
framework for a regional arms control regime can be
viewed as a trial ballotm in this regard
Australia
Australia provided about .5 percent of the arms
supplied to Southeast Asia from 1975 to 1978 and
4 percent of sales to the ASEAN states alone.
Canberra's political and security ties to its fellow
Commonwealth members in the region-Singapore
and Malaysia-motivate its military assistance pro-
grams to these countries. Ironically, Australia also
provides sizable military assistance to Indonesia, the
one country from which it perceives ial threat.
Australia has endorsed the concept of an arms
restraint accord in Southeast Asia that would inhibit
the development of offensive capabilities of regional
'? The Soviet Union has sought recognition as an Asian power since
Soviet leader Brezhnev put forward a vague proposal for an "Asian
collection security system" in June 1969. Despite the Soviets'
diplomatic efforts to promote the proposal, the only Asian states to
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states-of Indonesia in particular. At the same time,
Canberra sees many dangers and difficulties in the
actual implementation of such a restraint system at
this time. Australia is concerned that the ASEAN
states will react adversely to the idea of CAT restraints
(especially if proposed by the United States) and that
they will be motivated to reexamine their defense
capabilities and to accelerate their arms purchases.
Western Europe
Western Europe accounted for about 33 percent of
sales to all nine Southeast Asian states and 38 percent
of those to the five ASEAN nations during the period
1975-1978. With the exception of the United Kingdom
and the Netherlands, the West Europeans have no
strong political ties or strategic interests in that region.
The United Kingdom and its Commonwealth col-
leagues in the region are members of the regional Five
Power Defense Arrangement. Even so, its sales to
ASEAN accounted for only 6 percent of its worldwide
sales during the four-year period. The Netherlands,
whose sales to ASEAN-mostly to Indonesia-repre-
sented a substantial 40 percent of its worldwide sales,
retains political and economic interest in its former
colony, Indonesia.
Western Europe's major economic motives for selling
arms-the need to sustain domestic arms industries
and to compensate for an economic slowdown-are
important but have not been well served by the
Southeast Asian market because of the small
quantities of arms sales involved. Political and
economic commitments and arms sales to other
regions-the Middle East, China, and Africa-have
been generally viewed by the West Europeans as much
more important and lucrative.
West European attitudes, however, are changing. In
the past year, several EC nations have indicated
greater interest in the ASEAN group. The first
ministerial level meeting between the ASEAN and the
EC governments, held in November 1978, followed a
marked expansion of investment and trade, including
arms sales and coproduction agreements, with the
ASEAN states. France and West Germany, in par-
ticular, stepped up arms sales efforts in 1978. The
potential for cornering a larger share of the ASEAN
market has been enhanced, too, by ASEAN's problems
with US sales and deliveries.
The generally low priority currently assigned to
Southeast Asia by most of the West European nations
would probably make them willing to accept an arms
restraint system in the region-provided that all the
region's recipients and suppliers agreed to the same
limitations. By agreeing to limit their sales to South-
east Asia, EC suppliers might hope to alleviate
international pressures to reduce sales to other regions 25X1
they consider to be more important. It is conceivable,
however, that in the near future improved economic
and political contacts with the ASEAN states could
make the West Europeans increasingly unwilling to
restrain their arms sales 25X1
Marginal Suppliers
China, although not currently a major supplier to the
region, has used military assistance to promote its
political and ideological objectives in Indochina.
Beijing's efforts in the region currently are directed
toward thwarting Vietnamese and-by extension-
Soviet expansionism in the area. During the period
1975-78, China provided 5.6 percent of all arms to
Indochina, with the largest portion going to Kam-
puchea. During 1978, as a result of its dispute with
Vietnam and Vietnam's subsequent tilt toward the
USSR for assistance, China halted all economic and
military assistance to Hanoi. In Kampuchea, Beiiing
has announced its commitment to supply arms to the
resistance forces of the ousted Pol Pot government.
China would like to draw closer to the ASEAN states
to counter Vietnamese and Soviet influence in Indo-
china. The ASEAN states, however, have mixed views
about China's long-term intentions and have generally
held China at arm's length.
In the present stage of its rivalry with
the USSR in Asia, China will not easily foreclose its
option to provide arms to any client in the future.
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eager to expand their arms sales to Southeast Asia, and
the ASEAN states in particular. Together, these three
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nations supplied about 7.7 percent of the arms to
ASEAN, and about 6.4 percent of the total to
Southeast Asia during the period 1975-78.
Yugoslavia's sales to Southeast Asia-mostly to the
non-Communist ASEAN states-accounted for over
3.0 percent of its total world sales. One of the most
developed of the developing countries, it is both an
importer and exporter of conventional arms. Yugo-
slavia's vigorous efforts to market its equipment are
driven by basic economic imperatives born of chronic
imbalance of payment and unemployment problems,
combined with the desire to bolster its own security
and independence by achieving self-sufficiency in arms
production by the year 2000. Its burgeoning arms
industry produces a wide array of military equipment
which it sells to other LDCs. Belgrade's desire to
enhance its standing as a Third World and nonaligned
spokesman has also provided a powerful incentive to
expand arms sales to-and to engage in defense-
related joint production ventures with-other leading
LDCs, such as Indonesia.
Despite its growing role as an arms supplier,
Yugoslavia has a longstanding and active interest in
disarmament. Belgrade believes that if the LDCs act in
concert, the disarmament process offers a unique and
promising means for undermining the industrialized
nations' monopoly of military, political, and economic
power. The emergence of alternative arms suppliers
among the LDCs tends to advance these same goals
and is thus seen as a useful and even necessary adjunct
to the overall disarmament effort.
Belgrade is on record as being generally receptive to
proposals for the control of conventional arms, but it
has expressed fundamental skepticism about the value
of "unbalanced" schemes that are limited in scope or
geographic area. Yugoslavia's natural inclination to
resist conventional arms control proposals that seem to
sustain or enhance the military superiority enjoyedby
the industrialized powers has been reinforced by what
it perceives as the discriminatory nature of the current
international nuclear nonproliferation system. More-
over, Belgrade's freedom of maneuver on CAT issues is
constrained by its desire to maintain LDC solidarity.
Israel's sales to the ASEAN states amounted to about
10 percent of its total worldwide sales. The bulk of
these sales involved aircraft and Gabriel guided
missiles, some of the most advanced equipment that
the ASEAN states have acquired. A number of
economic and political motives underlie Israel's arms
export effort: Israel needs foreign exchange to pay for
its own weapons imports; it wants to maintain a strong
defense industry; and it seeks to overcome its interna-
tional isolation. By selling to ASEAN states, Israel
may hope to sway the votes of the group's two Muslim
members---Indonesia and Malaysia-on Middle East
issues in multilateral forums.
Despite its small industrial base, Israel's relatively
advanced military technology has enabled it to com-
pete effectively in this market. Its main handicap is
that much of the equipment it makes includes foreign-
made components or is manufactured under foreign
license, obliging it to obtain permission from another
supplier (usually the United States or a West Euro-
pean state) before it can make the sale. The denial of
this permission could be an important means for other
suppliers to restrain Israel from undermining an
agreement on arms transfer restraint in Southeast
Asia.
The prospects for purely voluntary Israeli restraint,
however, are dim. Partly because of the political
barriers keeping it out of many Third World markets,
Tel Aviv is unlikely to acquiesce in anything that
would weaken its defense industry for the sake of arms
restraint in a region still much more lightly armed than
its own.
The other nonregional supplier with a chance of
making significant inroads in the Southeast Asian
arms market is South Korea. So far, South Korea's
modest sales of small arms, ammunition, and military
clothing to the ASEAN states have accounted for 3
percent of its total worldwide sales of military supplies
and hardware. It is endeavoring to expand its share of
the market (2 percent) with deals for larger items such
as patrol boats. Like Israel, however, it faces the
problem of requiring third-party permission to export
complex equipment containing foreign-made compo-
25X1
25X1
25X1
25X1
Approved For Release 2003/01/30 : CIA-RDP80T00942A001000020001-1
 Approved For Release 2003/01/30: CIA-RDP80T00942A001000026tft -1
Arms Sales to Southeast Asia, by Supplier *
1975
1976
1977
1978
Total
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
181.4
34
285.8
33
422.4
57
398.1
62
1
287
7
46
130.9
24.2
112.2
13
115
15.1
0
0
,
.
358.1
13
0
0
174
20
0
0
1.8
0.3
175
8
6
2
30
5.6
10.5
L2
100.5
13.2
29.7
4.5
.
170.7
.
6.0
24.2
4.5
11.4
1.3
26.1
3.2
87.2
13.4
1489
53
100
18.5
0
0
0.1
0
0
0
100.1
3.5
14
2.6
9
1.0
27.2
3.5
46.9
7.2
97.1
3.5
3.7
0.7
86.4
10
0
0
0.9
0.1
91.0
3.1
Sweden
0
0
79.6
9.1
0
0
1.1
0.2
80.7
3
0
Yugoslavia
5.3
I
10.9
1.2
31.1
4.1
24.8
3.8
72.1
.
2.5
Republic of Korea
0
0
35
4
0.9
0.1
19.8
3.0
55.7
1.9
Israel
8.4
1.6
13.5
1.5
4.4
0.6
27.9
4.2
54.2
2.0
Switzerland
0
0
24.6
3
8.4
1.1
0
0
33
1
2
22.2
4.3
0
0
0
0
0
0
22
2
.
0
7
6.7
1.2
1.2
0.1
3.2
0.4
5.4
0.8
.
16.5
.
0.5
8.2
1.6
14.2
1.6
20.3
2.7
4.0
0.5
46.7
1.6
535
100
868.3
100
759.6
100
647.6
100
2.810.5
100
* Sales are understood to mean agreements, not deliveries. Data for
the United States are by fiscal years; all others, by calendar year.
Approved For Release 2003/01/30 : CIA-RDP80T00942AO01000020001-1
 Arms Sales to ASEAN, by Supplier *
1975
1976
1977
Amount
%
Amount
%
Amount
%
United
Sta
es
181.3
48
285.5
39
421.8
66
396.7
64.3
1,285.3
54.3
t
.,
-
Netherlands
0
0
174
23.8
0
0
1.8
0.3
175.8
7.4
dom
United Kin
24.2
6.4
11.4
1.6
26.1
4
g
West Germany
30
7.8
0
0
_
100.5
15.8
Spain
100
26
0
0
0.1
Negl
0
0
100.1
4.1
Ital
2
0.5
86.4
0.9
0.2
89.3
3.8
y
France
14
3.7
4.5
0.7
27.2
4.3
42.5
6.9
88.2
3.7
Sweden
0
0
79.6
10.9
0
l.1
0.2
80.7
3.5
Yugoslavia
5.3
1.4
10.9
24.8
4
72.1
3
Republic of Korea
0
0
35
4.8
0.9
0.1
19.8
3.2
55.7
2.4
Israel
8.2
2.2
13.5
1.8
4.4
0.7
27.9
4.5
54.0
2.3
Switzerland
0
0
22
3.1
3.8
0.6
0
0
25.8
1.1
Australia
6.7
1.8
1.2
0.2
3.2
0.5
5.4
1.0
16.5
0.7
Other
8.2
2.2
6.1
4.0
0.6
37.3
1.6
616.8
100
2,364.9
100
Total
* Sales are understood to mean agreements, not deliveries. Data for
the United States are by fiscal years; all others, by calendar year.
Arms Sales to Indochina, by Supplier *
1975
1976
1977
1978
USSR
130.9
86
112.2
93
115
99
China
22.2
14
0
0
0
0
0
0
22.2
5.6
Other
0
0
8.1
7
1.3
1
0
0
9.4
2.4
Total
153.1
100
120.3
100
116.3
100
0
0
389.7
100
Approved For Release 2003/01/30 : CIA-RDP80T00942AO01000020001-1
Approved For Release 2003/01/30 : CIA-RDP80T00942AO01000020001-1
 Approved For Release 2003/01/30: CIA-RDP80T00942A001000026tgt1
25X1
25X1'
Arms Sales to Burma, by Supplier *
West Germany
0
10.5
0
2
5
35.5
France
0
4.5
0
4.4
8.9
Switzerland
0
2.6
4.6
0
7.2
United States
0.1
0.3
0.6
1.4
2.4
Italy
1.7
0
0
0
1.7
Israel
0.2
0
0
0
0.2
* Sales are understood to mean agreements, not deliveries. Data for
the United States are by fiscal years; all others, by calendar year.
Arms Sales to Southeast Asia, by Recipient *
1975
1976
Indonesia
202.1
254.1
Thailand
47.2
243
Philippines
78.5
72.0
Vietnam
131.4
55.3
Malaysia
23.5
101
Singapore
28
58
Laos
7.6
65
Burma
2
17.9
Kampuchea
14.1
0
Total
1977
1978
Total
Total (%)
177
221.5
854.7
30.4
150
242
682.2
24.3
112
61
323.5
11.5
116.3
0
303
10.8
70.5
66
261
9.3
135
22.5
243.5
8.7
0
0
72.6
2.5
5.2
30.8
55.9
2
0
0
14.1
0.5
2,810.5
100
Approved For Release 2003/01/30 : CIA-RDP80T00942AO01000020001-1
 Approved For Release 2003/01/30 : CIA-RDP80T00942AO01000020001-1
Defense Percent of Central Percent
Hudget Government Budget of G N P
BURMA
1975
376
97 7
1978
)7i~
113.5
132.6
146-1
155.2
NA
6.0
5.8
6.2
5.5
NA
5.0
4.8
4.7
3.7
NA
)ON1, S I A
9's
0)-6
1)78
'a1ALAYSIA
J )75
1976
977
97.8
979
708.7
1.100.0
1.261.9
1.513.5
1.691.5
477.1
500.0
547.6
1,060.3
NA
18.9
16.7
14.0
14.8
14.5
15.5
17.3
12.5
19.9
NA
3.5
3.8
3.0
3.0
13
5.5
4.9
4.4
7.3
NA
P11I1.1PPINES
1')?5
5292
27.4
4.0
976
524.1
16.8
3.1
"19 7
674.8
18.0
3.4
78
793.1
17.2
3.1
1979
764.3
14.6
3.3
N(;APOK.E
`)73
268.2
14.7
4.8
(y'6
386.3
18.5
6.1
.13 5
18.5
5.9
41 1 2
16.6
5.6
ALIL ~, ND
9,5
377.9
16.1
4.0
"1'6
?15.1
16.7
32
:777
603.9
17.9
3.8
978
804.2
20.3
3.6
979
950.0
20.6
4.5
Approved For Release 2003/01/30 : CIA-RDP80T00942AO01000020001-1
 Secret
Secret
Approved For Release 2003/01/30 : CIA-RDP80T00942AO01000020001-1
Approved For Release 2003/01/30 : CIA-RDP80T00942AO01000020001-1