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February 4, 1994
"In Tough Times, Many Nations Cut Back a Farewell to Arms Spending"
San Jose Mercury News
By Timothy Taylor
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IN SOME ways, military spending is a lot like advertising. In both cases, opposing sides spend money just to offset the money that has been spent on the other sides. If both sides can disarm, more or less together, resources can be freed up for more productive uses.

Which is why it is such good news that global military spending is on a downward trend. Each year, the Stockholm International Peace Research Institute surveys the state of the world armament and disarmament. Its most recent yearbook, the 1993 edition, lays out the facts:

"World military expenditure continued its downward trend in 1992.... From 1989 to 1992, the fall never exceeded 5 percent per annum in real terms (i.e., after adjustment for inflation). In 1992 the fall in defense spending in aggregate for the first time accelerated distinctly to about 15 percent per annum."

Daniel P. Hewitt of the International Monetary Fund has pointed out that measured as a share of the world's economy, military spending has been declining since 1985.

However, the reasons for the decline -- and thus the prospects for whether it will continue -- differ around the world. Hewitt's analysis is reported in the December 1993 issue of Finance and Development, a journal published by the IMF and the World Bank.

In the developing countries of the world in Africa, Asia, the Middle East, and Latin America, military spending seems to have fallen during the latter part of the 1980s partly because their economies performed so badly that they cut back on everything. In addition, more developed countries have turned to democracy, and governments accountable to voters tend to reduce their military spending. The collapse of the old regime has dramatically reduced military spending in what used to be the Soviet Union. According to the Stockholm International Peace Research Institute, the level of military spending in the Commonwealth of Independent States fell by half in 1992 alone -- and thus has been the single largest contributor to international demilitarization.

The United States has reduced military spending as well, both because slow economic growth put pressure on defense budgets, and because of the reduced threat from Russia. West European defense budgets, although lower than U.S. levels to start with, have yet to change by much.

Military spending, however, is also like advertising in that both create an arena of counterbalancing expectations, and disrupting those expectations can cause turmoil. With advertising, it is the bloodless battle of changing market shares. But altering the military balance of power may make some nations or groups appear more vulnerable, and thus can trigger violence.

For example, the heavy hand of what was once the Soviet Union used to weigh down the ethnic rivalries of what was once Yugoslavia. The power cult that guided the USSR used to have some power over the personality cult that guides North Korea. Now, these areas are flashpoints for violence.

A second concern is that as many governments cut back on defense spending, weapons-producing companies are likely to compete more ferociously for export markets. In this manner, declining defense budgets in the industrialized nations could help promote the spread of sophisticated weapons -- up to and including nuclear technology -- to developing nations.

Finally, as overall defense spending falls around the globe, it becomes cheaper and more attractive to consider becoming a regional military power. Especially in the Far East, where China, Japan, the two Koreas, and a host of vibrant economies are jostling for power, it is frighteningly easy to dream up nightmare scenarios where such conflict takes the form of a military clash.

As the world's greatest economic power and only military superpower, the United States is the only country that can address these issues. Making credible commitments of force -- which will sometimes require carrying through with actual force -- may help to stabilize regional conflicts. Clever diplomacy may help to limit weapons proliferation, and to reassure countries that their security need not require a buildup.

Even if President Clinton was a foreign policy specialist -- which he is not -- the task of inventing a framework for a more peaceful balance of power is extraordinarily daunting.

But enough gloomy possibilities. The reality is that with current trends, global military spending in the year 2000 will be $300 billion less than it was in 1990, a peace dividend that will improve the health, education and living standards of people around the globe.

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