End of Cold War Brings Huge Savings

Defense outlays drop most in Eastern Europe

The end of the cold war has saved the world more than $1.5 trillion in military spending. That's equivalent to one-fifth of the total output of the United States this year.

This huge saving was for the years from 1987, when world defense expenditures peaked, through 1994, the latest year with statistics available for most nations. The numbers come from the new annual report by the US Arms Control and Disarmament Agency in Washington. In 1994 world defense outlays dropped to $840 billion, down 5 percent from 1993, the agency says.

Though some experts worry the trend may reverse itself, the drop in military spending has eased the strain on many government budgets.

For the US, the cumulative savings since its military spending peaked in 1986 amount to $299 billion through 1994. That's more than a whole year of current defense outlays.

The latest Clinton administration budget forecasts put defense spending at $266 billion in the 1996 fiscal year, ending Sept. 30, down from $288 billion in 1994. Outlays are expected to slip further to $255 billion in 1998, and then rise a bit in current dollars.

To one defense expert, Ruth Legar Sivard, the cuts are still not enough. Defense spending is "out of balance" with support for the education and health needs of children, particularly in developing countries, she says. More than 1 billion people lack basic health care, one adult in four is illiterate, and one-fifth of the world people go hungry each day, she notes.

The agency arrives at its figures by comparing actual defense spending with what would have occurred if peak-level spending had continued, adjusted for inflation.

Most of the reduction in world military spending from a peak of $1.297 trillion in 1987 has occurred in Eastern Europe, defined as Russia, most other Soviet Union successor nations, Warsaw Pact countries in Eastern Europe, successors to Yugoslavia, and Albania. Hard economic times as well as the cold war's end prompted their cuts, which total $1.25 trillion.

Another defense expert, Avraham Shama, a professor of management at the University of New Mexico, in Albuquerque, forecasts an upturn in Russian military spending "within a couple of years." He says the Russian private economy is "growing like crazy," but only 10 percent of that output is reported to the government.

"This growth will soon give Russia a certain muscle and a certain confidence," he says.

Russia, he adds, will be able to afford and will want to expand defense spending to regain some "lost prestige and respect." That expansion will in turn prompt more spending by the US, he says.

Arms spending began to decline in developing nations in 1983. The World Bank and other international agencies put pressure on them to devote their resources to development, not arms, notes Ms. Sivard, a former chief economist at the disarmament agency. But spending in East and South Asia has risen.

Military spending in the Middle East bulged from 1990 to '92 because of the Persian Gulf war. It has since declined sharply.

Other facts cited by the disarmament agency include:

*The United States is by far the world's largest military spender, with about 35 percent of the total. Next is Russia at $96.8 billion in 1994, followed by China ($52.8 billion), Japan ($45.8 billion), France ($44.4 billion), Germany ($36.3 billion), and Britain ($34 billion). Saudi Arabia spent $17.2 billion in 1994, Israel $6.6 billion.

*World armed forces fell from 24.6 million in 1993 to 23.5 million in 1994, a drop of about 4 percent. China's armed forces number 2.93 million, America's 1.71 million, Russia's 1.39 million, India's 1.3 million, North Korea's 1.2 million. Developing countries in total have 15.6 million under arms, slightly less than double the forces of the industrial nations.

The US accounts for more than one-third of total NATO forces.

*World arms trade fell in 1994 to $22 billion, a $6.4 billion or 22 percent drop from 1993 and a 73 percent fall from the all-time peak of $83 billion in 1984. Middle East nations took 41 percent of world arms imports in 1994.

*Industrial nations provided 93 percent of all weapons in 1994. The US was the leading arms exporter at $12.4 billion, followed by Britain at $3.4 billion, Russia $1.3 billion, China and France both $800 million, Germany $800 million, Israel $470 million, and the Czech Republic $300 million.

The US military dominance concerns one defense analyst who would not be quoted by name. It means, he says, the US becomes responsible for keeping its allies strong militarily. In the case of some developing nations, with little in the way of defense, the US may find itself needing to act as a policeman against invaders.

*Military expenditures as a percentage of national output, a measure of the economic burden of defense, fell to 3 percent in 1994, its lowest level since 1960. The ratio fell from 6.1 percent in 1984 to 2.6 percent in 1994 in the developing countries; from 5.5 percent to 3.1 percent in the industrial world.

*Citizens of industrial nations on average spent $550 each on defense, those in developing nations $37 apiece. The per capita expense for US residents was $1,105.

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