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Italy is now crowding both Britain and West Germany in the arms business. This year, for example, it sold Iraq an entire $1.8 billion mini-navy: four frigates, six corvettes, a supply vessel and a floating dock. The Italians anchored one of their stylish new frigates next to the Doges' Palace in Venice during last year's seven-nation economic summit, not to provide protection but, as one naval officer confided, "as an advertisement in the hope that someone would buy one." Although the Italians specialize in naval hardware, the state-owned Oto Melara firm of La Spezia offers a speedy, 40-ton medium tank (price: $1.1 million) that is comparable to West Germany's Leopard 1, and SIAI-Marchetti offers an intermediate trainer, the S-211, that can easily be armed for counterinsurgency warfare. Zaire, Zimbabwe and Somalia have ordered some of the 521 Is, which cost about $1 million each.
West Germany is probably the exporter beset with the most moral qualms, particularly about shipping abroad weapons that might be used against Israel. Chancellor Helmut Schmidt last year proposed a sale to Saudi Arabia of 300 Leopard tanks for nearly $5 billion plus guaranteed access for ten years to Saudi oil. But the deal raised so much political furor in Germany that it now seems likely to be revoked. The Bonn government is currently formulating guidelines that are expected to reaffirm its traditional policy of not selling to regions of instability.
British Prime Minister Margaret Thatcher, trying to revive her country's slipping arms trade, is embroiled in a similar domestic dispute over the $22 million sale of a 6,200-ton destroyer and antiaircraft missiles to Chile. Charged M.P. Frank Allaun of the opposition Labor Party: "The supply of a sophisticated ship with missiles to a country where people are being tortured is immoral." Similarly, the government of Austria is being criticized for its proposed sale of 100 tanks to Chile. An Austrian spokesman said that Vienna is only trying to be fair: it has already sold 67 tanks to Argentina, which is involved in a border dispute with Chile.
One significant recent development in the arms trade is the emergence of two consumers as major exporters.
One is Brazil. A defense expert in Rio de Janeiro boasts that arms sales may reach $2 billion by 1985, equaling coffee as one of the country's top exports. The boom in this Brazilian industry, ironically, was caused in part by Jimmy Carter's attempt to limit arms shipments to South America. Brazil not only supplies itself and its neighbors with sophisticated tanks and planes but also sells to the Middle East. Its largest customer is Iraq, which has bought more than $800 million in weapons since 1976, including some 400 armored vehicles. Iraq is negotiating for $400 million in more tanks and munitions. In the past few months, Brazil has also sold $170 million of equipment to Ecuador, $89 million to Colombia, and is negotiating deals with Saudi Arabia, Jordan, Libya, Malaysia and China.
Despite its heavy reliance on American weapons for defense, Israel competes with its U.S. suppliers on world markets. Although the Israelis offer