1978-1982. 121Theeconomic significance ofarmsexports canbegauged fromthe factthatbY-1978 suchexports accounted formorethanhalfofthecombined trade surplus ofthedeveloped economies, helping toofff;lettheincreased costoftheir oilimports. In1982,the$39billion armsexports ofthedeveloping market economies wasmuchlargerthantheirestimated tradesurplus ofabout$13billion (in1981dollars). Without thearmsexports theywouldhavehadasubstantial deficit. In1983,theexports ofmajorweapons systems bythedeveloping market economies weremorethanhalfoftheirestimated tradesurplus of$30billion (in1983dollars). 396.Onthepurchaser side,thedeveloping countries havelongaccounted forover onehalfofallarmsimports Iforthe1970sasawholetheirsharewasroughly 75percent.131Duringtheperiod 1980-1984, itwasabout66percent. Arms imports byalr-developing countries (bothoil-exporting andnetoil-importing developing countries) accounted forroughly onequarter oftheircombined trade deficits in1978.In1981,imports ofmajorweapons systems aloneaccounted for about40percentofthetradedeficit ofthedeveloping market economies. 397.Imports ofmilitary equipment indeveloping countries havealsobeen stimulated byintense competition andsalespressure fromdeveloped countries. In somedeveloped-market economy countries thisreflects adesiretoensurebetter use ofthecapacities oftheirmilitary industries, torecoveratleastapartofthe growing military research anddevelopment costsandtofindnewexport commodities tocoverthe·deficit intradewithoil-exporting developing countries through arms exports. Forexample, theaero-space industry ofFrance, thestrongest western European aerospace industry, exported 70percentofitsproduction in1978and,of theseexports, .military salesaccounted for72percent.l!/ 398.Anetflowofresources tothecountries withtradedeficits canbehelpfUlif theresources areusedforproductive investments. However, armsimports useup foreign exchange resources thatmightotherwise finance purchases ofcapital goodS, withtheresultthattheimporting country getsmuchlessrealproductive growth I...A/40/519 English Page195 foreachdollarofforeign capital inflow. Somerecenteconometric studies suggest thatforeverydollarspentonarmsindeveloping countries domestic investment tendstobereduced byabout25cents. Therefore, forasmalldeveloping country facingaforeign exchange andsavings constraint anddevoting between 6and 8percentofitsGDPtoweapons imports, theimplications forlong-term development canbeserious indeed. C.Prospects 399.Looking ahead,itisobvious thatacontinuation ofthepresent patterns of military spending willinvolve thedeflection ofevenlargerresources into military usesthatdonotpromote collective security, andthisatatimewhen economic growthisexpected toslowdown. 400.Twobasicquestions arise,first, whatarethemagnitudes ofthebenefits thatmaybeexpected fromachangeinpresent armaments trends? Secondly, butof overriding importance, cananything usefulbesaidaboutthewaystobringabout suchachange? 1.Reallocation ofresources released through disarmament 401.Theresource requirements foramoresatisfactory rateofglobal economic growth, asestimated insections IIIandIV,necessitate aclosescrutiny offuture military outlays inalleconomies, particularly thoseenvisaging steadily highor increasing military spending. Therelease ofhumanresources frommilitary sectors couldrelieve someofthedeveloped economies oftheirlabourshortages, andthe reallocation ofmaterial resources couldspeeduptheirprocess ofadjusting tothe changing natureofcomparative advantage intheworldeconomy. Areallocation from military spending wouldenabledeveloping countries tospeeduptheirprocess of industrialization andraisetheirlevelsofconsumption. 402.Theeffect onGDPgrowthratesintherestofthe1980sofaworld-wide freezing ofdefence expenditure attheirestimated 1984levelwasconsidered in section IIIinthedisarmament scenario. Inthatscenario, 50percentofthe financial resources released fromsuchafreezeindefence expenditure inmostof thedeveloped countries, bothmarket andcentrally planned economies, areassumed tobechannelled intoaDAtothedeveloping countries, whiletheremaining
**Analysis**
This text appears to be a discussion on the economic implications of arms exports and imports, particularly on the global economy and developing countries. It highlights the significant share of arms exports in the trade surplus of developed economies and the impact of arms imports on the trade deficit of developing countries. The text also touches on the resource allocation and its effects on economic growth, industrialization, and consumption.

**Category**
Economic development, International trade