inside the glass house

Defence dollars reach Cold War heights
STOCKHOLM -- The late Alfred Nobel, one of the world's best known Swedes, is venerated here with a museum named after him. But the man who invented dynamite is a political paradox in a country known for stability, tranquility and peace activism.

Nobel, who made a fortune making weapons of war, bequeathed his enormous wealth to reward global achievements in physics, chemistry, medicine, literature and economics.
But part of his fortune was also earmarked for one of the world's most coveted awards: the Nobel Peace Prize.

The prize was one of Nobel's contributions to international peace at a time when the world was threatened by a Cold War between the US and the former Soviet Union engaged in an eye-ball-to-eyeball confrontation.

The ghosts of a past Cold War came back to haunt the international community last week when the Stockholm International Peace Research Institute (SIPRI) released its latest Yearbook.

“Our figures show clearly that the bulk of the rapid increase in military spending in 2002 is accounted for by the United States alone," Alyson J.K. Bailes, director of SIPRI, said in an interview in Stockholm. Bailes said the US military budget is starting to approach Cold War levels but has still not reached them -- especially in GDP percentage terms.
World military expenditure, which has been increasing since 1998, accelerated sharply in 2002, rising to 784 billion dollars (in constant dollars) compared with 741 billion dollars in 2001.

The increase of 43 billion dollars was dominated by a 10 percent real term increase by a single country— the United States— accounting for almost three-quarters of the global increase. SIPRI attributes this increase primarily to Washington’s response to the terrorist attacks on the US in September 2001.

“A review of global expenditure trends shows that the rest of the world is not prepared, or cannot afford, to follow the USA’s example in increasing military expenditure at the current level or for the same purposes,” SIPRI said in its 2003 Yearbook.

If current trends continue, the United Nations has predicted world military spending could reach Cold War levels rising to about one trillion dollars annually in the next five years.

According to the latest SIPRI figures, US military spending has climbed significantly: from about 296 billion dollars in 1997 to 335.7 billion dollars in 2002. The US Department of Defence has estimated U.S. military spending for 2004 at about 390 billion dollars, rising to a projected 400 billion dollars in 2005.

This would be larger than the annual gross domestic product (GDP) of Argentina (285 billion dollars), Russia (251 billion), Switzerland (240 billion) and Sweden (227 billion).
The economies of South Asia pale in comparison: Pakistan with an average annual 61.6 billion dollar GDP, Bangladesh with 47 billion and Sri Lanka with an average of about 16 billion dollars. Only India with an annual GDP of about 450 billion dollars is a cut above the American military budget.

Japan, the world’s second largest military spender, is far behind the US, averaging about 49 billion dollars annually, and Britain, the third largest, averaging 36 billion dollars a year. According to the SIPRI Yearbook, the US now accounts for 43 percent of world military expenditures, when currencies are converted at market exchange rates. The top five spenders – the US, Japan, Britain, France and China – account for about 62 percent of total world military expenditure.

Bailes said Europe as a whole showed no sign of following suit on the same scale and the spending possibilities of other traditionally strong powers like Russia are now very limited. In general, it seems right to draw attention to the overall trend and the dangers which it brings both for international stability and security, and for sustainable development, she added.

“If the US's spending plans were to be among the causes of a future crisis in the US's own economy, that would hurt all of us,’’ Bailes warned. Other countries with large increases in military spending include China, Russia and Brazil. The countries with the sharpest reductions in military spending in 2002 were three in Latin America – Argentina, Guatemala and Venezuela— and two in Europe, Belarus and the former Yugoslav Republic of Macedonia.

The SIPRI Yearbook says that there are marked regional disparities in the share of economic resources devoted to military expenditure. In 2001, for which the latest figures are available, the Middle East spent an estimated 6.3 percent of GDP on the military compared to a global average of 2.3 percent while Latin America spent only 1.3 percent.
Africa, Asia and Western Europe also spent less than the world average (2.1 percent, 1.6 percent and 1.9 percent respectively), while North America, at 3.0 percent, and Central and Eastern Europe, at 2.7 percent, spent somewhat more.

“While the war on terrorism is a major factor in the increase in U.S. military expenditure, this has not been the case elsewhere – except in a handful of countries,” SIPRI said.
Currently, the Middle East is the largest single market for U.S. weapons. The increases in U.S. arms purchases by the six Gulf nations – Bahrain, Oman, Qatar, Kuwait, Saudi Arabia and the United Arab Emirates – were prompted by the 1990 Iraqi invasion of Kuwait.

Asked if arms purchase would decline following the ouster of the Iraqi regime by U.S. military forces, Bailes said that “whatever uncertainties may still remain over aspects of Iraq's future and its future regime, it seems clear that for a long while at least we shall not see another belligerent Iraq with the power and the wish to threaten its neighbours.”
There is also likely to be an external/international presence on Iraq's soil for some time, whose goals will include stabilization in the realms of both internal and external security, she noted.

Logically, this should allow other states in the region also to reduce the level of their military preparedness and to refrain from escalating the levels of confrontation and military-technological competition in the region. “This is certainly the desirable result from SIPRI's viewpoint, but I admit that it depends on the behaviour of external as well as regional players”, Bailes said.

The results could be worse, or at least ambivalent, if outside powers try to build up new military "clients" to check and compete with others in the region, and/or if they try to destabilize any further regimes, she added. Jayantha Dhanapala, the former UN Under-Secretary-General for Disarmament Affairs, warned last year that rising global military expenditures were not only diverting precious financial, material and human resources from productive to non-productive pursuits, but were also jeopardising humanity's common natural environment and the prospects for social and economic development of all nations.

Dhanapala recalled that exactly 16 years ago, the world community gathered at the United Nations to open an historic international conference on the Relationship between Disarmament and Development. Yet today, Dhanapala says, global military expenditures have risen to amounts approaching average Cold War spending levels.

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