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Obama Facing Hard Choices In The Global Arms Business Part One

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by Nikita Petrov
Moscow (UPI) Nov 12, 2008
The United States has elected its first African-American president, Sen. Barack Obama, D-Ill. President-elect Obama will have little time to celebrate as he prepares to select his Cabinet and further lay out the country's policies for the next four years. Meanwhile, the current administration is leaving quite a legacy for Obama to deal with.

One such "legacy" is two-year sanctions imposed last week by the U.S. Department of State on several countries and organizations accused of violating the 2000 Iran Non-Proliferation Act.

The act bans cooperation with Tehran on weapons of mass destruction. The sanctions were again applied to Rosoboronexport, Russia's only state arms exporter, which has been charged, without grounds, of such cooperation. American companies, organizations and even individuals are prohibited from dealing with it, its subsidiaries or partners.

In response, Rosoboronexport said the sanctions will not affect its work, because it does no business with American partners. On Nov. 4 Russian President Dmitry Medvedev, speaking at a military technical cooperation commission meeting, said Russia "considers such sanctions unwise."

"These are unfair practices, an attempt to push aside other suppliers, but these sanctions will not hurt us, so those who impose them should bear this in mind," he said. Medvedev said Russia's defense order total had "increased markedly" and now stood at more than $30 billion.

Medvedev's words have been echoed in the U.S. Congress. Russia is still the world's second-largest arms exporter, according to a report prepared by American experts for the Congress. In 2007, according to the report, Moscow sold arms worth $10.4 billion and accounted for 17.4 percent of all weapons supplied in the world. A similar report, published a year ago, estimated Russia's supplies at that time at $8.1 billion. The main buyers of Russian weapons are India and China.

Of late, says the report, Russia has been setting its sights on North Africa, the Middle East and Southeast Asia. Not so long ago, for the first time since the Cold War, it tried to enter the Latin American market. Moscow now has a large client base there, having concluded arms contracts with Venezuela. Because of their low prices, Russian weapons will be in steady demand in some developing countries for a long time to come, the report says.

The United States, however, is still the leader. In 2007 it concluded arms supply contracts worth $24.8 billion, or almost twice as much as the previous year, when U.S. exports were estimated at $16.7 billion. America exports 41.5 percent of all legal arms.

American weapons manufacturers are not enthusiastic about competition with the Russian defense sector and are doing everything possible to prevent them from increasing supplies abroad. The sanctions will not harm Rosoboronexport's efforts, however. The main purpose of this demonstrative move, some analysts say, is not so much to complicate life for Russian exporters as to saddle a new administration with new irritants between the White House and the Kremlin, irritants that will be difficult for President Obama to remove.

(Part 2: Resolving the long deadlocks on strategic nuclear treaties)

(Nikita Petrov is a Russian military analyst. This article is reprinted by permission of RIA Novosti. The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.)

-- (United Press International's "Outside View" commentaries are written by outside contributors who specialize in a variety of important issues. The views expressed do not necessarily reflect those of United Press International. In the interests of creating an open forum, original submissions are invited.)

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