A pipeline to arms: Osthandel and the rise of Soviet arms sales to the non-communist third world

While West German trade to the Soviet Union (Osthandel) enabled Moscow to achieve a favorable balance of trade with West Germany by the mid-1980s, it was a source of debt for the Soviets. West German exports and credit to the USSR during the early 1970s were the principal sources of Soviet hard-currency debt. Yet, by the mid-1970s, Moscow needed continual West German exports and credit to further modernize the USSR and to develop and transport Soviet natural gas. Because of Soviet debt, however, West Germany would not fund the construction of a larger pipeline that would really allow the USSR to make energy sales profitable. In part to pay down its debt, Moscow resorted to increased arms sales to the Third World in the mid-to-late 1970s. It was through these arm sales that Moscow raised sufficient hard currency to pay down the Soviet debt by 1980. Yet it was also through these arms sales that the USSR provoked increased American arms sales to the Third World in return. The many deaths from civil wars in the Third World during the 1980s were an unfortunate result of this chain of events.