Romania produced Soviet weapons and military equipment under license not only for its own armed forces, but also for export to the Soviet Union and to both Soviet-allied and nonaligned countries in the Middle East and Africa. In the early 1980s, annual arms transfers abroad averaged US$620 million, or between 5 and 6 percent of total exports, making Romania the world's ninth largest arms exporter and second only to Czechoslovakia among the nonSoviet Warsaw Pact countries.

The Ministry of National Defense's foreign trade division and the state-owned firm Romtehnica handled Romania's arms sales abroad. The majority of its sales of Soviet-designed AK-47 and AKM assault rifles, BM-21 and M-51 multiple rocket launchers, TAB-72 armored personnel carriers, and munitions and ordnance went to the Soviet Union, Vietnam, Iraq, Libya, and the Democratic People's Republic of Korea (North Korea) during the early 1980s. In 1983 Romania and Libya signed a formal military cooperation agreement based on the supply of Romanian-made infantry arms, military vehicles, and explosives to the latter. Iraq remained Romania's best Middle East customer. Besides selling arms, Romania repaired and overhauled Iraqi tanks and armored vehicles that had been damaged in the battles of the Iran-Iraq War.

In 1984 Romania agreed to sell 200 M-77 tanks, its improved version of the Soviet T-55, to Egypt as well as to provide training and maintenance and to assist Egypt in undertaking licensed production of the M-77. Romania exported spare parts--produced under license--for French Alouette III and Puma helicopters in service with the air forces of Algeria, Angola, and Ethiopia. It tried unsuccessfully to sell its versions of the French-designed helicopters, IAR-316B and IAR-330, in Latin America in competition with the original manufacturer Aerospatiale.

For Romania, arms sales represented a stable export market that helped to absorb some underutilized productive capacity in its heavy manufacturing sector and to earn hard currency until the mid1980s . Arms transfers to the Soviet Union allowed Romania to reduce somewhat its trade imbalance with that country. Trading weapons for oil with countries in the Middle East enabled Romania to develop a non-Soviet source of energy supplies. After several years of steady increases, however, arms sales abroad dropped to US$270 million in 1986. Arms production and sales became a less valuable part of the economy in the late 1980s and even became a burden on the civilian sector.

Data as of July 1989