High Level Events in Stockholm to close SIPRI's Anniversary Year
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Personal Essays and SIPRI Yearbook Extracts
FROM THE SIPRI YEARBOOK 1978
Disarmament and development
The resource link between disarmament and development is not confined, or should not be confined, to the possibility of significantly increasing the volume of resources transferred from developed to underdeveloped countries. Underdeveloped countries also divert significant quantities of resources to armaments and, on the whole, their military expenditures have been increasing rapidly. This aspect of the issue has not received the attention it deserves, so it is discussed more fully below.
Similarly, there is every reason to believe that the developed countries pay a high economic price for supporting large military establishments. This goes beyond the trite observation that resources devoted to armaments could be used in other, more useful, ways. A broad indication of this is provided by the fact that the economic performance of countries with relatively small military outlays, notably Japan and FR Germany, has been generally superior to that of those diverting a relatively large fraction of their resources to armaments.
It is likely, for example, that sustained high levels of military expenditure have a significant inflationary impact. Military expenditures are, of course, inherently inflationary, since they generate purchasing power but do not yield any offsetting increase in either consumable output or productive capacity. For those countries that support comprehensive defence industries and an associated research and development (R&D) capacity, the concentration of available funds and scientific and engineering talent in the military sector gives rise to inflationary pressures in another way. While the rate of technological advance and productivity growth is relatively high in sectors closely related to the military, essentially electronics and aerospace, it is correspondingly low in most other sectors, making the economy as a whole less capable of absorbing increases in the costs of production. Low productivity growth, in turn, discourages new investment, with the result that the capacity of many sectors in the economy to generate new employment is undermined. There is also evidence, at least for the United States, that a given sum of military expenditure generates less employment than the expenditure of an equivalent sum in many civil areas.
It is important that the resource link between disarmament and development be considered as wider than the possibility of increasing the volume of resources transferred from rich to poor countries. Since all countries pay an economic price to maintain armed forces, an exclusive focus on the volume of international resource transfers that disarmament would make possible is likely to inhibit the emergence of widespread public support for disarmament. Similarly, the wider perspective admits the possibility of regional and even unilateral action to secure the economic benefits of disarmament or arms restraint.
Apart from the question of resources, it can also be argued that disarmament and development are linked in a more systemic way. Events in recent years-above all, of course, the oil crisis of 1973-74-have dramatized just how interdependent the nations of the world have become and how inevitable it is that this interdependence will grow. It follows that it will become progressively more difficult to insulate a nation or group of nations from the effects of economic and social upheavals, tensions and armed conflicts elsewhere in the world. From this standpoint, many observers see great danger in the prevailing dichotomy between rich and poor at both the national and international levels.
The rise of military expenditure in the developing world
In 1977, world military expenditure was about $360 thousand million. Of this total, NATO and the Warsaw Treaty Organization (WTO)-the major alliances of industrialized countries-spent about 70 per cent, and the Third World spent about 18 per cent. But an impor-tant feature of world military spending is that the Third World share is steadily increasing. In 1957 this share (excluding China) accounted for 4 per cent of total military expenditures; in 1977 the Third World accounted for 14 per cent. The increase in military spending, however, varies considerably from region to region.
Nearly all the wars fought since World War II have involved Third World countries. The weapons used in these wars have been mostly acquired through the international trade in arms. In fact, about 75 per cent of the current world arms trade is with the Third World; and increasing amounts of money are being invested by the industrialized countries in the co-production of weapons with underdeveloped countries. The volume of military transfers to the Third World has increased more than 15-fold over the past 25 years, and the 1970s show a marked increase over the 1960s.
There is also a qualitative change-in the 1950s large numbers of second-hand weapons were sent to Third World countries, often without any supplementary equipment, such as spares and support equipment, or training agreements. Today, the arms market is a buyer's rather than a seller's market, and any importer able to pay is likely to find a seller of even the most sophisticated armaments.
Increasingly, national as well as international attention is being devoted to the problem of the arms trade. Authorities in the supplier countries have begun to question the wisdom of providing unlimited amounts of sophisticated weapons. And some importers are beginning to doubt the wisdom of importing large amounts of military technology from the industrialized world, involving many military advisers, and huge investments in the military sector at the expense of the civilian sector of the economy.