Every state has a right to self-defence, under Article 51 of the UN Charter. However, the UN Charter also requires all member states to 'promote universal respect for, and observance of, human rights and freedoms' in order to achieve 'economic and social progress and development' (Articles 1, 55 and 56) and 'to promote the establishment and maintenance of international peace and security with the least diversion for armaments of the world's human and economic resources' (Article 26). The countries of Africa, Latin America, Asia, and the Middle East hold 51 per cent of the world's heavy weapons. Excessive or inappropriate arms purchases are a drain on social and economic resources which developing countries simply cannot afford. The Millennium Development Goals will not be achieved without addressing the issue of sustainable development in all aspects of policy, including arms transfers. Both arms importers and exporters must ensure that arms transfers do not undermine sustainable development. For arms exporters, various export-control regimes already include this requirement, as does the proposed Arms Trade Treaty, but few governments fully respect these commitments. Lip service leads to arms falling into the wrong hands and the diversion of scarce resources from fighting poverty. To protect the social and economic rights of poor people, exporting governments must apply an effective and systematic methodology to assess whether proposed arms transfers will affect sustainable development. This report proposes such a methodology, and explains why, excepting legitimate security needs, arms transfers with an adverse impact on sustainable development must not go ahead.