June 25, 1991
"Where Peace would Really Pay"
San Jose Mercury News
By Timothy Taylor
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IN THE United States, a peace dividend might cut taxes, reduce the budget deficit, or increase funds for education, health, and assisting the poor. But a peace dividend for the Third World is even more important.

Military spending is proportionately larger in poor nations than in wealthy ones. The developed economies of countries like Europe, Japan, Canada and the United States spend about 4.3 percent of their gross national product on the military. The current U.S. figure is 5.3 percent, although it was as high as 6.5 percent in 1986, at the height of the buildup in defense spending.

For the developing economies of the world, average military spending is 5.5 percent of their combined GNP.

The comparison becomes even more startling when military spending is compared to spending on education and health. For nations with developed economies, military spending is about 30 percent of their spending on health and education combined. But for the poor nations of the world as a group, military spending is roughly equal to spending on health and education!

Moreover, military spending in developing countries has risen three times as fast as in industrialized nations over the last three decades, with an average increase of 7.5 percent per year.

If defense spending in the Third World could be frozen in the future, rather than increasing at this rate, it would free up an additional $15 billion each year, according to the 1991 Human Development report of the United Nations, from which many of the statistics given here are derived.

By the standards of a U.S. government scheduled to spend $1.4 trillion next year, $15 billion is trivial. But for nations like Chad or Zaire, where the life expectancy is 50 years, the average person has one year of schooling, and per capita GNP is $500, that amount can go a long, long way.

The U.N. report estimates that saving a life through preventive health care costs between $100 and $600 in developing nations; that safe water can be provided for as little as $5 per person per year; that successful primary education programs (in Bangladesh) have been run for $15 per student.

Another way to see the potential importance of $15 billion is to consider that the total amount of official development assistance for the entire world is less than $40 billion, of which the United States provides about one-fifth. An extra $15 billion would be like the U.S. tripling its foreign aid budget.

If an autocratically governed nation decides to starve its people to feed its armies, there isn't much the United States or other developed nations can do about it, at least not directly. But two steps could prove helpful in trying to persuade poor nations to devote more of their resources to the social needs of their people.

First, with the waning of the cold war, the United States and USSR should be less eager to use poor nations as a skirmishing-ground. There should be less pressure on poor countries to buy arms, or to offer a military base in exchange for political or economic alliance.

But conflict in the Third World often has indigenous roots, as well. Thus, a second step would be to link development aid with the recipient country's level of military spending.

As the U.N. report puts it: "If a government chooses to spend more on its army than on its people, it cannot be regarded as committed to human development, and this bias should certainly count against it in aid negotiations. High military expenditure should be a legitimate area of policy dialogue in all forums of development cooperation." A gentle policy along these lines might be simply to assure that aid itself is actually spent for humanitarian purposes. Only about one-fifth of current international aid is now spent directly on health and education. Another quarter is spent on infrastructure projects. But as much as half goes into industrial or military projects that often seem to have little payoff for the average citizens of the country.

This refocusing of aid could have a substantial impact. In some poor countries like Ethiopia, Uganda, and Chad, international aid provides as much as half of the nation's spending on health and education.

A more stern policy might be to change the amount of aid a country receives according to its level of military spending. But if a country's leadership has little regard for its people to begin with, it's not clear why the threat of reducing humanitarian aid would alter its behavior.

Humanitarian assistance should be available to all. But nations that want additional economic support from the United States and other industrialized nations should first demonstrate that they are serious about committing their own resources to their own citizens. That principle should hold true for the Third World; it should also hold true when the Soviet Union comes asking for assistance in its economic reforms.

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