Conventional Arms Export Policy of the Russian Federation.

During the late 1980s the Soviet Union embarked on a major revision of its arms export policy. Grant aid recipients gradually disappeared from delivery ledgers while Moscow pursued inroads into high profit, traditionally Western-dominated markets. The newly founded Russian Federation completed this reorientation, and announced in January 1992 that future contracts would be paid in hard currency. It was expected that sales revenues would be sufficient to both finance the conversion of Russias immense arms industry to commercial production, and help alleviate the domestic hardships caused by President Yeltsins sweeping economic reforms. These plans were frustrated by early failures in Yeltsins conversion programs, the poor performance of Russian arms when competing with Western technology, and the unexpectedly severe domestic impact of reform. In a succession of policy changes Moscow has attempted to revitalize its arms trade. Barter has returned as an acceptable medium of payment, and Russia has acquiesced to the building of major arms plants abroad. More crucial to U.S. interests, export controls have been loosened considerably. Today Russian-produced weapons are sold by factory and design bureau representatives, various government agencies, the military and even international marketers. Profit has supplanted politics as the primary sales determinant, opening the door to outcast regimes in Iran and China. Moreover, export restrictions on many weapons types have been abandoned high tech, offensively capable arms now dominate Russian sales. Unchecked, this escalating trend promises to surpass the proliferation seen during the high water mark of Soviet internationalism.