FRENCH ARMS EXPORTS TO LESS DEVELOPED COUNTRIES, 1966-69

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001600030068-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 20
• Document Creation Date: December 22, 2016
• Document Release Date: October 24, 2011
• Sequence Number: 68
• Publication Date: June 1, 1970
• Content Type: IM

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DIRECTORATE OF
INTELLIGENCE
Intelligence Memorandum
French Arms Exports To Less Developed Countries,
1966-69
Secret
ER IM 70-68
June 1970-
Copy No-.
44
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WARNING
'T'his doctunent colitaips information affecting the national
defense of the United States, within the meaning of Title
18, sections 793 and 794, of the US Code, as amended.
Its transmission or revelation of its contents to or re-
ceipt by an unauthorized person is prohibited by law.
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CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
June 1970
French Arms Exports
To Less Developed Countries
1966-69
Introduction
France has long been a major international sup-
plier of arms and in recent years has become the
third largest exporter of arms to less developed
countries. This memorandum examines the scope and
terms of recent French arms sales'to the Third World
and assesses their economic implications.
French Role as Supplier to the Third World
1. The value of French exports of military
equipment to the less developed countries of the
Free World* is surpassed only by'the United States
and the USSR (see Table 1). During 1966-69, deliv-
eries of military equipment to the less developed
* The term less developed countries of the Free
World includes the following: (1) all countries
of Africa except the Republic of South Africa;
(2) all countries of East Asia except Japan; (3)
Portugal and Spain in Europe; (4) all countries in
Latin Ameri.oa except Cuba; and (5) all countries
in the Near East and South Asia.
Note: This memorandum was produced solely by CIA.
It was prepared by the Office of Economic Research
and was coordinated with the Office of Current In-
telligence and with the Office of Strategic Research.
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Exports of Military Equipment
to the Less Developed Countries
1966-69
Million US $
Exporting Country
1966
1967
1968
1969
United States a/
-
1,350
1,385
1,270
1,350
USSR
440
375
350
300
France
110
110
215
165
a. Exports are by fiscal year an include
only US government transfers; exports to the
Indochina area are excluded.
countries under grant aid and commercial sales
agreements totaled nearly $600 million --about
20% of total French arms exports. In this same
period, French military advisory and training
assistance probably was valued at some $150 mil-
lion.
Grants-in-Aid
2. The grant aid portion of French military
exports represents about 8% of total military de-
liveries to the less developed countries in 1966-
69.* This aid traditionally has been confined to
former French colonies in Africa and to Cambodia
(see Table 2). The only other major recipient.of
French arms aid has been Biafra -- which, between
the summer of 1968 and its collapse in January
1970, received an estimated $30 million worth of
arms, making it by far the largest single recipient
of French arms aid in the 1966-69 period.
3. The bulk of French military grant aid prior
to 1966 consisted of small arms and vehicles as
well as a few patrol craft and reconnaissance and
The French refer to military aid as including
only grant aid; all sales, including those with
concessionary credit terms, are considered commer-
ciaZ sales.
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French Military Grant Aid Deliveries
to the Less Developed Countries
Million US $
Country
1966-69
1956-65
Total
Biafra
30.0
0
30.0
Cambodia
2.8
18.7
21.5
Cameroon
1.9
3.1
5.0
Central African
Republic
0.2
1.2
1.4
Chad
0
4.1
4.1
Congo (B)
0
1.9
1.9
Dahomey
0.2
3.5
3.7
Gabon
0.3
2.0
2.3
Ivory Coast
2.5
6.9
9.4
Malagasy Republic
1.6
34.1
35.7
Mali
0.1
1.0
1.1
Mauritania
0.6
3.0
3.6
Morocco
4.8
15.2
20.0
Niger
0.1
1.0
1.1
Senegal
1.0
17.6
18.6
Togo
0
3.0
3.0
Tunisia
0.4
8.6
9.0
Upper Volta
0
3.4
3.4
Total
46.5 128.3 174. 8
transport aircraft, which were left behind by de-
parting French forces when the former colonies were
granted their independence. Recent deliveries have
consisted mainly of small arms, vehicles, spare
parts, and ammunition as well as a few -- less than
a dozen -- transport aircraft and jet trainers.
Among the former French colonies in Africa only
Guinea, Algeria, and Mali turned away from French
support in favor of military assistance from Commu-
nist states -- although in 1969 Algeria showed re-
newed interest in French arms. In addition, Morocco
and Congo (B) have supplemented French aid with small
amounts -- about $30 million and $4 million, respec-
tively -- of Communist equipment.
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Commercial Credits
4. France re-emerged as an important commercial
exporter of.arms in the mid-1950s with the'sale of
Ouragon fighter aircraft to India. The French also
began selling arms on a large scale to Israel and,
by the time of the Suez Crisis of late 1956, the
Israeli armed forces were extensively equipped with
French weapons. In the mid-1960s a number of less
developed countries began to update their military
inventories with foreign equipment. ' France, one of
the few countries in the world that can offer a full
line of military equipment of indigenous design
ranging from jet aircraft and missiles to small
arms, waged an extensive sales campaign to win a
large share of this market.* Table 3 lists French
arms sales to the less developed world in'1966-69
and the estimated value of the equipment purchased.
As indicated in the table, the French concluded
sales averaging almost $170 million annually-during
that time.
5. Countries located in the Near East and South
Asia have accounted for by far the larger portion of
French arms sales, ranging from 70% to over 90% of
annual sales between 1966.and 1969. In the past.
year, sales have been concentrated predominantly in
countries bordering the Mediterranean Sea. Three
or four large transactions each year have made up
over 85% of the value of French arms sales to less
developed countries. Despite the French arms'em-
bargo against the delivery of major weapons, Israel
continues to be France's best customer. The com-
position of sales, however, has shifted from jet
fighter aircraft to spares and ammunition needed
for equipment,' chiefly jet-aircraft, previously
purchased from France.
6. Aircraft have been the mainstay of the
French arms export drive in the Third World. Since
1959, more than 325 Mirage fighters have been sold
to less developed countries. These sales were
valued at about $660 million and were distributed
as shown in the first tabulation on page 5. Mirage
production is scheduled to be increased from six
aircraft a month in 1969 to 11 a month by June 1970.
* The preponderant rote of the French government
in the production and sate of French arms is out-
lined in Appendix A.
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Country
Number
Purchased
Brazil
16
Israel
121
a/
Lebanon
12
_
Libya
110
Pakistan
24
Peru
16
Spain
30
a. Including 50 Mirage
aircraft presently under
embargo.
Export orders for some 250 Mirages are on hand, and
the planned increase in production will allow addi-
tional commitments. Negotiations are currently
under way with Greece and Argentina, and a French
aircraft company, Avions Marcel Dassault; is bidding
for additional contracts with Algeria, Australia,
Morocco, Switzerland, Tunisia, and Yugoslavia.
French-manufactured helicopters, too, are also in
great demand; over 335 Alouette helicopters already
have been purchased by Third World countries for
military use. In addition, France has exported
substantial quantities of tanks, armored personnel
carriers, mortars, and artillery. The following
tabulation indicates the types and quantities of
French ground forces equipment currently in the
inventories of less developed countries:
Equipment
Estimated Number
Exported to Less
Developed Countries
AMX-13 tanks
615
Armored vehicles,
personnel
and cars
carriers,
535
Artillery
pieces
760
Mortars
2,035
Sizable quantities of small arms and ammunition
have been exported throughout the Third World.
France also exports a wide range of missiles in-
cluding several types of antitank missiles. Since
1964, contracts for the sale of submarines, frigates,
and patrol boats have been concluded with Spain,
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Value of French Military Sales Agreements
with the Less Developed Countries
Million US $
Area and Country
1966
1967
1968 ?1969
1970
Africa
Algeria
0
0
0
10.0
Burundi
0
0.2
0
0
Congo (K)
3.1
0
2.5
0
Ethiopia
0
8.4
0
0
Ivory Coast
1.0
0
0
0
Morocco
'0
4.0
0
0
Nigeria
0
4.0
0
0
Rwanda
0.7
0
0'
0
Tunisia
1.0
N.A.
N.A.
2.9
Europe
Portugal
0
3.0
21.1
Spain
2.0
0'
.0'
90,.0
East Asia
Indonesia
0
0
1..4
Malaysia.
0
0
-1.0
0
N.A.
Singapore
0
0.8
0
Latin America
Argentina
0.5
0.2
14.7
3.7
a/
Brazil
0
0
0.9
0
'59.0
Dominican Republic
0.
1.9
0
0
Peru
0
43.6
0
0
a/
Venezuela
5.6
0
0 .
0
Near East and South Asia
Greece
0
0
0
20.0
a/
India
4.5
7.4
0 -
4.7
Iraq
0
5.2
2.3
1.0
Israel
79.0
75.0
75.0
75.0
Jordan
0
0.8
0
0
Lebanon
40.9
0
0.8
13.0
'a/
Libya
0
0
0
0
2'90.0
.Pakistan
37.5
54.0
0
-'0 '
Saudi Arabia
0
0'
.42.0''
0
Total.
175.8
204.7
144.4
151.4
a.. Negotiations in process.
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Portugal, Israel, Tunisia, and Greece. For a
listing of major French military equipment de-
livered to less developed countries, see Appendix
B, . Table 7.
French Arms Sales Campaign of the 1960s
7. French military equipment has always been
competitively priced. Prior to the mid-1960s,
however, sales were usually conducted on a cash
basis. Then, in an effort to increase arms exports,
the French began to extend medium-term credits. In
recent agreements, repayment periods are believed
to have averaged about seven years, although occa-
sionally they have been extended for as long as
10 years. The interest rate has ranged between 2%
and 8.2% and is usually around 5%. Appendix B,
Table 6, shows the range of terms granted to some
recent arms clients.
8. In addition to offering attractive credit
terms, the French also have been willing to grant
special concessions to particular buyers. France
agreed in several instances to offset a specified
portion of the costs of arms with purchases of
local goods and services. Several French agree-
ments with Israel provide that 25% of the contrac-
tual amount be used to'purchase Israeli goods and
services. In recent negotiations with Greece,
France also offered to accept partial payment in
commodities -- particularly tobacco. Other con-
tracts have provided for the assembly of French
equipment in the recipient country with French
technical help, as in a 1968 contract to supply
armored vehicles to Argentina. A 1970 agreement
with Spain provided for Spanish production of Mirage
aircraft components under French license.
9. The French also have taken advantage of US,
UK, and Soviet arms embargoes to move into markets
formerly supplied by one or more of these nations.
In this way France became the sole supplier of mili-
.tary aircraft to Israel from the mid-1950s until
1968, when Paris instituted its own embargo on
everything but spare parts. By that time, however,
Israel had become the largest consumer of French
arms, with total purchases of almost $400 million.
France sold military equipment to both India and
Pakistan after their 1965 war and has placed no
restrictions on Portugal's use of French equipment
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in Africa. In Latin America, where the United
States has been reluctant to meet requests for Jet
fighter aircraft, the French moved in and sold Peru
and Brazil a squad.%'on of Mirages. Negotiations for
the purchase of a squadron of French jet fighters
also are under way with Argentina.
10. A further factor in the growth of French
arms exports has been the conscious effort of France
not to become openly involved in major regional con-
flicts or associated with either side in such con-
flicts. Arms bought from France, therefore, have
not borne the ideological stigma often inferred in,
purchases of Soviet or US weapons, and the French
have offered the only major alternative source to
the United States and the USSR. Argentina turned
to France for military equipment after announcing
its "plan Europa" in 1968, under which it hoped'the
United States would be supplanted as the principal
source of military equipit:ent. In 1969, Algeria --
which has become increasingly disenchanted with its
almost total dependence on Soviet weapons -- con-
tracted'to purchase French jet trainers.
Technical Assistance
11. France's military-technical assistance has
been concentrated in its former African colonies.
Over half the French military advisers' and techni_
cians serving abroad have been on.assignment in
these countries, which also take up roughly four
fifths of the foreign trainee slots at French mili-
tary training facilities. France has borne' almost
all.ihe.costs -- over $25 million annually --'of
this ass.'stance, which has in fact been by far the
major form of. the country's military aid to its'ex-
colonies. Much smaller quantities of technical aid
have been associated with major French arms sales'
to other areas.
12. French technical aid is considerably, smaller,
than corresponding US or Soviet programs, as shown
in Table 4.. Nevertheless, in 1968 and. 1969 French
military technicians were on assignment in more than
25 less developed countries,.and nationals from about
30 of these states received military training in
France (see Table 5). ? French training courses have
covered a.wide range of : subjects,; including staff:'
g
training as well as operation and maintenance of
equipment. This training has placed a burden on
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Table 4
Comparison-6f Military Personnel
Involved in Technical Assistance Programs
1968-69
Trainees in
Technicians in
Less Developed
Donor Country Countries,
Donor Country
1968
1969
1968
1969
France
1,362
1,245
2,313
2,338
United States
5,835
6,095
3,485
3,150
USSR
3,585
2,865
7,000
6,560
level over the next two or three years.
units in Africa, such as those presently in Chad
supporting the Fort Lamy government in a military
action against dissidents. While some French mili-
tary personnel stationed in former African colonies
hold command and staff positions in the local armed
forces, priority is being given to traininr African
officers to take over these positions. Most French
technicians are involved in instructing indigenous
personnel in the use and maintenance of equipment.
14. Statements by French officials have indi-
cated that France would like to reduce the size of
its technical, assistance program in its former sub-
Saharan colonies, as an economy move. The program,
however, is expected to continue at about the present
limited French facilities. While in principle the
French have a 20% quota on foreign enrollment in
their military academies, levels have reached 35%
in several schools.
13. Some 2,300 French military technicians were
assigned to less developed countries in 1969 (see
Table 5). Nearly 90% of these were stationed in
`Africa. These figures do not include French line
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Table 5
Personnel Involved in the French
Military Assistance Program
French Technicians
Less Developed
Country.
Algeria
Argentina
Brazil
Burundi
Cambodia
.Cameroon
Central African
Republic
Chad
Chile
Congo (B)
Congo (K)
Dahomey
Dominican Republic
Ethiopia
Gabon
India
Indonesia
Iran
Israel
Ivory Coast
Laos
Lebanon
Malagasy Republic
Mauritania
Mexico
Morocco,
Niger
Pakistan
Peru
Rwanda.
Saudi Arabia
Senegal..;
Singapore
Togo
Tunisia
Personnel Training in Less Developed
in France a/ Countries b/
1968
1969
350
355
5
7
2
2
2
2
1968 1969
403 349
3 3
0 0
0 1
N.A. N.A. 300. 160
N.A. 21 87 85
19 19 86 87
4 4 166 289
2 1 0 0
0. 0 6 5
10 27 0 0
15 15 17 45
2 1
N.A. N.A., 9 9
7. 17, 40, 89
N.A.. N.A. - 0 0
0 25 0 0
65 .65. 0 0
N.A. N.A., 0 0
109 109 108 152
61 69 145 75
81 25 0 0
N.A. N.A.. 228 200
500 .:400 400 400
.42 N.A.. 104 89
l 0 1 1
N..A. N.A.. 70 95
12 ' 12 9 15
18 .12 0 12
.N.A. N. 'A. 2 1
0: 0 2 2
N.A. N.A. 103 103
11 11 0 0
N.A. N.A. 20 20
N.A. N.A. 8 11
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Personnel Involved in the French
Military Assistance Program
(Continued)
Personnel Training
in France
French '..echnicians
in Less Developed
Countries b/
Less Developed
'
Country
1968
1969
1968
1969
Upper Volta
45
45
N.A.
38
Venezuela
0
0
1
1
Total
1, 362
1,245
2,313
2,338
a. Including some police trainees.
b. Including some working with police units.
Conclusions
15. Between 1966 and 1969 the value of French
arms sales contracts, both under grant aid and
commercial agreement, increased from $661 million
to about $850 million a year. About one-fourth of
these sales were accounted for by arms transactions
with less developed countries, where only the
United States and the Soviet Union surpass France
as suppliers of arms. By far the largest part --
over 90% -- of the arms exported to the Third World
during this time period were commercial sales.
Even though arms exports have made up only about
6% or less of total exports to less developed coun-
tries, they nevertheless have augmented France's
export earnings by an average of $150 million a
year since 1966, thus helping France to maintain
the third largest arms production capability in
the world, exceeded only by those of the United
States and the USSR.*
16. While the growth of French arms exports
reflects primarily France's efforts to increase
Arms exports to the Third World make up a much
greater percentage of Soviet exports to Third World
countries -- some 31% in 1968.
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export earnings and to find additional outlats for
the products of its growing armaments industry,
recent major arms sales also have been an important
means of reasserting French influence in the Medi-
terranean area. Almost two-thirds of French arms
sales to the Third World during the past four years
have been concentrated in this area. Already in
1970 the French have signed agreements with Libya
and Spain involving the delivery of some 140 Mirage
fighter aircraft.
17. The recen. success of French exports is due
::.n large part to the aggressive sales campaign waged
by French arms salesmen. Since the mid-1960s the
French have offered arms on. medium-term credits, at
relatively low rates of interest. In several cases,
France has offered attractive sales packages, in-
volving partial repayment in local goods and local
assembly or production under French license.
18. A very small portion (about 8%) of total
exports have been provided under government grants,
chiefly to former French colonies in Africa.
Although France is likely to continue to provide
its ex-colonies with modest. amounts of military
equipment in the form of grants-in-aid, it is
already trying to reduce the cost of technical
assistance -- its major form of aid to these
nations -- by gradually replacing French advisers,
and technicians with African officers as they are
trained..
19. So far this year, contracts for some $400
million worth of military equipment have been con-
cluded with less developed countries -- the largest
annual volume of sales to these countries to date.
Moreover, negotiations for .additional sales.are in
progress. The demand for French military equipment
is expected to continue to increase over the next
several years, in response to the growing desire of
many less developed countries to modernize their
military inventories. Aircraft sales should.con-
tinue to Spearhead the French export drive in the
Third World.
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Administration of French Arms Sales
The Delegation Ministeriolla pour l'Armemont
(DMA) has the day-to-day responsibility for the
French arms sales program. DMA reports directly
to the Minister of Defense. In conjunction with
DMA an office called Direction des Affairos Inter-
nationales (DAI) initially determines whether a
proposed export sale falls within Franco's armaments
policy. If the sale is approved it is than referred
to the Commission Interministeriello d'Etudes dos
Exportations de Materiolle do Guerre, composed of
deputy ministers, who determine finally whether the
sale conforms to France's political interests. If
the sale is a particularly important one, it may be
referred to the president.
France's arms industry is largely government-
owned. The Alouette helicopter, AMX tank, and var-
ious antitank missiles are produced by government-
owned corporations. The large private arms manu-
facturers -- Avions Marcel Dassault, producer of
the Mirage fighter aircraft, and Engin Matra, manu-
facturer of a wide range of missiles, for example --
maintain a very close working relationship with
their counterparts in the public sector; often they
subcontract specific items to government factories.
Under the control of DMA are eight departments
charged with supervising various aspects of the
public segments of the industry, including the sale
of its products. The organization and factories
controlled by DMA operate on commercial principles,
and all profits go to the treasury. The French
government also assists private arms manufacturers,
often finding foreign markets for their products,
as in the recent French government policy decision
to provide Mirage jet fighters to Libya.
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Statiatical Thbion
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i e rrs of French Az-,,,s Agreements
with Selected Less Developed Countries a/
1966-70
Value
Interest
Less Developed
(Million
Repagrent
Rate
Country
Year
US $)
Equip.: ent Covered
Period
(P
ercent)
Argentina
1968
2.0
Engineering equipment
7 years
Argentina
1968
12.7
Tanks and self-
propelled guns
7 years
Argentina
1969
2.
Tanks and self-
8 years
propelled guns
Congo (::)
1966
1.7
Helicopters
5 years
Pakistan
1966
37.5
Submarines
7 years
a
Pak i5ta.'1
1957
35.0
Mirage aircraft
10 years
4.5 to 5.0
Peru
1967
15.6
Tarks
8 years
6
Peru
1967
28.0
Mirage aircraft
5 years
8
2
P.wanda
1966
0.7
A.nored personnel
3 years
.
_N.A.
carriers
Saudi Arabia
1968
32.O
Armored personnel
5 years
carriers
Spain
1970
30.0
Mirage aircraft
8 years
5
5
Ilene zuc la
1966
5.6
Helicopters
10 years
.
3.5
/:alu. ~^::I":~: i~?. `.e es'?^~s T:'.i .:ssT$ Ghoscr. .^+F:C^r:is C :GAL: r
Declassified in Part - Sanitized Copy Approved for Release 2011/10/31: CIA-RDP85T00875R001600030068-4
 Declassified in Part - Sanitized Copy Approved for Release 2011/10/31: CIA-RDP85T00875R001600030068-4
ILLEGIB
Iq
Next 3 Page(s) In Document Denied
Declassified in Part - Sanitized Copy Approved for Release 2011/10/31: CIA-RDP85T00875R001600030068-4
 ME=
Declassified in Part - Sanitized Copy Approved
ria O: ffre::ch Kilitary Equipment C+e1f.ered, by Racipie=t
1954-69
ICcntiaued)
for Release 2011/10/31: CIA-RDP85T00875R001600030068-4
26
United Arab t:-ter Fe~urlic o
Spats. :;aria 1222 Tunisia ^srkey Pec;blic Volta Ve a: eta Vie`==
Lar4 arsra'mnnta
:a.^k?
Sc1f-prc~Qllad g;:a..a
Armored vehicles, gnracr~ al
carriers,
Artillery
PaCot110;3
a. case
pie:tia.s
rifles
5
24
XCrtara
137
Naval ships
Oaatreycr escort ICe)
5 ;;~sxt ra? (,I$)
S'l.:A4 trv chaser
"atar torpedo 4:^d calasiie
boa t.a
Other, inclvAing aszilfari
boats srd Ia:.c:itj craft
Prop bocute rs
Jet fighters
Tra.a.aporis
t4eliccptera
Other
Guided missile syate:tt.a
Air-ta-surface
Air-to-air
Surface-to-surfacer
An t.i tank
Declassified in Part - Sanitized Copy Approved for Release 2011/10/31: CIA-RDP85T00875R001600030068-4
N.A.
33
40
20
1
3
-
-
11
-
17
14
14