Arms sales mean big business for France

France now exports more arms per citizen than any other nation on earth and is the world's second-largest supplier of arms to developing countries. ``But this is not because France wants war,'' strategic analyst Philippe Moreau-Desfarges said during a recent interview in his office at the Paris Institute Franaise des Relations Internationales.

``Our trade deficit grew rapidly during the early 1980s and unemployment is still rising,'' Mr. Moreau-Desfarges said. ``A reduction in arms production means that many people will lose their jobs.''

Last year France sold a record $9.1 billion worth of arms to the third world, more than double the $4 billion it earned on similar sales in 1983.

The Soviet Union led the world with $10.4 billion last year, while the United States, the traditional leader in the postwar era, slipped from $10.2 billion in 1983 to $7.3 billion in '84.

Those data are from a US congressional survey -- a study the French government has reacted to angrily.

While they do not dispute the sums cited in the report, French Defense Ministry spokesmen point out that many of France's sales to developing countries consist of ``defensive systems'' that could not be used to provoke war. Middle East customers

The most important example is a $4 billion contract to provide Saudi Arabia with an elaborate antiaircraft missile system. The Saudi government is buying the system out of concern over the five-year war still raging between its two much more populous neighbors, Iran and Iraq.

Although the missiles sold to Saudi Arabia could not be used for offensive purposes (since they don't have the range to be fired beyond Saudi borders), they do represent one of the largest arms deals ever conducted with a developing country.

French sales of offensive weapons like Mirage fighter jets and Exocet missiles were also up in 1984.

``The French have a very pragmatic view of arms sales,'' says Maj. Robert Elliot of the London-based International Institute for Strategic Studies. ``It is an important and growing part of their export economy.''

Some estimates place the value of arms sales as high as 30 percent of all French industrial exports.

Aside from the air defense system sold to the Saudis, 1984 also saw a $530 million French sale of 18 new Mirage 2000 fighter planes to the United Arab Emirates, an additional undisclosed number of Mirages sold to Egypt, and a multimillion-dollar agreement to supply Iraq with Exocet missiles and Super Etendard planes in exchange for oil.

With virtually no oil of its own, France has become the second-largest supplier of arms to Iraq after the Soviet Union. Deliveries of French arms to Iraq have grown considerably in the past three years. Still, it is next to impossible to calculate their cost, as they are based on swap agreements for oil futures, whose cash value is liable to fluctuate. The French government has developed a similar arrangement with Abu Dhabi.

Three-quarters of all French arms sales are conducted with countries in the Middle East or North Africa. This year France may make an even better showing there as the result of lessening American competition for markets in the region. In February, the Reagan administration announced it was temporarily suspending new arms sales to the Middle East.

France also sells arms to developing countries in Asia and Latin America, including Nicaragua.

Sales to developed European nations also rose sharply during 1984 and the first half of this year. Last November, France agreed to sell 40 Mirage 2000 jets to Greece for $1 billion. Three months ago it landed a whopping $5 billion deal to supply Spain with 400 conventional surface-to-surface missiles, as well as technicians to install them, communications systems to control them, and a huge stock of spare parts. French jobs at stake

This new boom in weapons exports comes only a few years after President Franois Mitterrand's declaration that France must stop selling arms to the third world. Shortly after he defeated former President Val'ery Giscard d'Estaing in the national elections of May 1981, Mr. Mitterrand said his nation had a moral obliga tion to encourage peace, not war, among developing countries.

The British Economist Intelligence Unit estimates that weapons manufacturers employ 330,000 people in France, with half a million more jobs in related industries. With more than 10 percent of the labor force out of work, and with 4,000 additional jobs lost each week from cutbacks in government subsidies to the shrinking French coal, steel, and shipbuilding sectors, the Mitterrand government is striving to contain unemployment.

``Such a profitable business as the arms trade cannot be abandoned,'' says Moreau-Desfarges, ``and you will find it is the same in any of the industrialized countries.''

Britain is hoping to sell a $4 billion battlefield communications system to the US Army. Brazil is a major arms supplier to developing nations, and Yugloslavia earned more than $2 billion last year selling weapons.

The French Defense Ministry recently invited delegates from 59 countries to witness a test flight of the new Exocet missile, the SM-39, which can be fired from the deck of a submarine while still safely beyond the radar range of its target.

The original model Exocet, used by the Argentine Air Force during the Falklands war, sank both the British destroyer HMS Sheffield and the cargo ship Atlantic Conveyor. Since then, Exocets have been used by Iraq to harass oil tankers in the Persian Gulf.

A'erospatiale, the French state-owned aerospace group, earns nearly as much money on the Exocets it makes as it does on its Airbus commercial passenger planes. Since 1974, missile division sales at A'erospatiale have more than quadrupled, to half a billion dollars last year.

France also encourages cooperative manufacturing ventures with developing countries: The biggest so far is a contract with Egypt to produce jet planes and helicopters. The technology transfer and know-how gained in such ventures are an incentive to developing countries.

Some arms analysts point out that cooperative manufacturing will enable the third world to become a competitor for the down-market, low-technology end of the arms market, as it already has for the steel and shipbuilding industries.

Yet France continues to develop complex systems for technologically advanced Western nations, including sonar and software packages for the US armed forces.