Explanation of the TIV Tables

Frequently Asked Questions

The TIVs produced by the Arms Transfers Database are a source of considerable confusion. For this reason, additional information is provided below, giving answers to the questions most frequently asked about the data.

• Why don't the statistical data represent financial values?
  

The statistical data produced by the Database do not represent financial values for two reasons:

1. The database was not created with the intention of measuring financial values. Arms transfers can be measured with several objectives in mind. The two most common objectives are, first, to gain an understanding of the economic impact of a country's arms transfers and, second, to make an assessment of the military implications. The methodology used for producing the TIV data generated by the database was developed with the second objective in mind, assessing the military implications of arms transfers, how they impact upon regional balances of power and what they say about relations between supplier and recipient states. Information on financial values is not particularly interesting for this purpose. For example, such data would either not capture or would underestimate military equipment given away as aid or sold at a discount. What is needed are statistical data that measure the volume of military equipment transferred in a way that ranks systems in terms of their value as a military resource.

The solution employed by the database is a system in which military resources are measured by including an evaluation of the technical parameters of the weapons. The tasks and performance of the weapons are evaluated and the weapons are assigned a value in an index. These values reflect the military resource value of the weapon in relation to other weapons. This can be done on the condition that a number of benchmarks or reference points are established by assigning some weapons a fixed place in the index. These are the core of the index, and all other weapons are compared to these core weapons (see below).

2. The creation of an accurate database of the financial value of international arms transfers would be all but impossible. First, in many cases no reliable data on the value of the transfer are available. Second, even if the value of a transfer is known, it is usually the total value of a deal, which may include not only the weapons entered in the database but also other items related to these weapons (e.g., spare parts, armament or ammunition) as well as support systems (e.g., specialized vehicles) and items related to the integration of the weapon in the armed forces (e.g., software changes to existing systems or training). Third, even if the value of a transfer is known, important details about the financial arrangements of the transfer (e.g., credit/loan conditions and discounts) are usually not known.

• How are the values calculated for the different weapon systems?
  

The process of calculating the TIV of individual weapon systems is as follows.

For a number of weapon types (noted in the register as the 'weapon designation') it is possible to find the actual average unit acquisition price in open sources. It is assumed that such real prices roughly reflect the military resource value of a system. For example, a combat aircraft bought for $10 million may be assumed to be a resource twice as great as one bought for $5 million, and a submarine bought for $100 million may be assumed to be 10 times the resource a $10 million combat aircraft would represent. Those weapons with a real price are used as the core weapons of the valuation.

Weapons for which a price is not known are compared with core weapons. This comparison is made in the following steps.

1. The description of a weapon is compared with the description of the core weapon. In cases where no core weapon exactly matches the description of the weapon, the closest match is sought.

2. Standard characteristics of size and performance (weight, speed, range and payload) are compared with those of a core weapon of a similar description. For example, a 15 000-kg combat aircraft would be compared with a combat aircraft of similar size.

3. Other characteristics, such as the type of electronics, loading/unloading arrangements, engine, tracks or wheels, armament and materials, are compared.

4. Weapons are compared with a core weapon from the same period.

Weapons delivered in 'second-hand' condition are given a standard value of 40 per cent of the value assigned to the new weapon; second-hand weapons that have been significantly refurbished or modified by the supplier before delivery (and have thereby become a greater military resource) are given a value of 66 per cent of the new value. In reality, there may be huge differences in the military resource value of a second-hand weapon depending on its condition after use and the modifications during the years of use.

Figures are expressed as USD and converted to 1990 prices using US inflation rates. However, this is merely done in order to make the figures comparable over the time span of the Database, and should not be taken as an indication that the figures represent financial values.

The TIV of weapons produced under licence was reviewed in 2005 and many systems previously listed as 'produced under licence' were changed to 'direct delivery' status. Only weapons with a low content of input from the licenser (below 50 per cent) are regarded as real licensed production and calculated as such. The systems with a higher input from the licenser are considered as 'assembly' and are given the full TIV. This change was introduced because the previous calculation of the percentage of input from the licenser was problematic (often little more than an educated guess), and margins of error large, especially in cases with a rather high input from the licenser.

• What can the data be used for?
  

The TIV data can be used to measure trends in the international arms trade, such as changes in the total flow of weapons and the geographic pattern of the export or import market.

Example: According to the database, the TIV of arms transfers in 1980 was USD38478, while in 2005 it was USD21965. It would therefore be correct to say that, according to the SIPRI Arms Transfers Database, the volume of international transfers of major conventional weapons in 2005 was 57% of the 1980 volume.

The data can also be used to measure a particular country's share of the overall import or export market or the rate of increase or decline in its imports or exports.

Example: according to the database, the TIV of arms transfers to China in 2005 was USD2696 and the TIV of Russian transfers to China was USD2564. It would therefore be correct to say that, according to the SIPRI Arms Transfers Database, Russia accounted for 95% of the major conventional weapons transferred to China in 2005.

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