8:18 AM Nov 29, 1995


Geneva 29 Nov (Chakravarthi Raghavan) -- Continued work by UNCTAD secretariat and its intergovernmental machinery on issues relating to structural adjustment for transition to disarmament (SATD) has received wide support from non-governmental organizations at the meeting of the Ad Hoc Working Group SATD, while governments seem to be divided.

In their comments, Netherlands supported an UNCTAD role and study, noting there was no other UN institution which could bring to bear on the issue questions of economics and development.

Britain and China, on the other hand, were among those who seemed to hold a contrary view, and stressed that with limited resources this was not an area of priority for UNCTAD.

The meeting, due to end Friday, is in pursuance of a mandate of UNCTAD-VIII at Cartagena. The continuation or otherwise of this work would come up for review and decision at the next Conference. The German position seemed somewhat ambivalent.

Among the NGOs, the Quakers office in Geneva, the Women's International League for Peace and Freedom (WILPF), supported further work by UNCTAD in this entire area of economic analysis and study of the issue.

Both the chair of the meeting, and the Deputy to the UNCTAD Secretary-General in their opening remarks, stressed that the terms of reference of the Ad Hoc Working Group was the result of intense negotiations at Cartagena and did not include the issue of the "appropriate level" of military expenditure for any country.

Rather it dealt with the issues of the adjustment in the transition to disarmament, once the government concerned had taken the necessary decisions on its security and levels of military expenditure needed.

Roger Lawrence, Deputy to the UNCTAD Secretary-General said that the secretariat paper had focused on issues in this area having a bearing on world economic growth and development.

In terms of the issue of the "peace dividend", understood to mean opportunity provided to major powers by the end of the Cold War to redirect arms expenditure to ODA, the potential was significant.

Military expenditures for OECD countries as a group fell between 1987 and 1993 by some $200 billion, while the ODA of these countries rose by $30 billion or about 15% of the reduction in arms expenditure. However this rise was not sufficient to prevent the ODA/GNP ration from falling and the most recent outlook was for continued decline. "The expectation raised by the availability of a peace dividend thus seems likely to be disappointed," Lawrence commented.

The conversion of military capacities and technologies to civilian uses was an important element of SATD and involved not only industry, but infrastructure and manpower. The challenge of conversion took significantly different forms in developing and developed or transition economies.

But in all cases extra costs have to be incurred before benefits could be reaped and the costs might fall on part of society while benefits might be enjoyed by another.

The transition to disarmament could be greatly facilitated if these two issues of distribution over time and between social groups could be effectively tackled. The UNCTAD document had devoted some attention to the conversion of manpower, whether among producers of goods and services for the military or the armed forces themselves. While privatization could play a role in conversion, the key issue is to ensure producers of goods and services for military had commercial skills and attitudes indispensable for selling to a civilian market.

UNCTAD's examination of the impact of decline in military demand on commodity markets suggested no broad generalization was possible and even at the level of individual commodities, the complexity of relationships prevented any clear-cut conclusions being reached.

On issue of dual purposes technologies, Lawrence said, the ECOSOC Commission on Science and Technology for Development which earlier this year had considered an UNCTAD issues paper, had recommended continuation of its work on scientific and technological aspects of conversion of military capacities.

The transition to disarmament, Lawrence added, was of direct and immediate interest to a number of developing countries, particularly those where armed conflicts were coming to an end and structural adjustment was taking the form of reconstruction of a war-torn society.

The recent agreements (over Bosnia) at Dayton, Ohio, the UNCTAD official added, was a reminder of the immediacy and importance of this issue to developing countries.

The Dutch representative said the economic aspects of disarmament and demobilization could not be implemented without reference to protection of legitimate security interests of a country and it was necessary to combine aspects of the two. But the Ad Hoc group should focus on economic aspects, leaving security issues to be explored elsewhere.

Referring to the IMF view, in a study, that sustained cuts in military spending would lead to substantial improvements in economic growth, the Dutch representative noted that while discussion on military expenditures was an integral part of discussions of his country with recipients of its development aid, there were no set standards to judge the appropriate level of military funding. Due to these difficulties, it was better to look at trends in military spending.

There should not be a dialogue to reduce military spending, where Dutch companies or the Dutch government may be seeking at the same time increase in sales of military goods to developing countries. There should be coordination between relevant government bodies to formulate consistent policies.

Netherlands was assisting a number of African countries in their demobilisation and reintegration projects. But there was no central UN body to coordinate such efforts and UNCTAD might play a useful role in this by providing a forum for discussion of relevant issues among governments and NGOs. Another important area in this field was openness and transparency - by establishing criteria to decide what could be viewed as military expenditure. In this area too UNCTAD could play a useful role, including on reporting data on military outlays and arms to the UN register which should be expanded to include small arms.

But the UK thought UNCTAD had no useful role to play since most elements were appropriately handled elsewhere. The UK mentioned in this connection the UN Security Council, the Conference on Disarmament, the UN Disarmament Commission and arms control agreements and practices as fora where these were being discussed, and any UNCTAD work would cut across the mandate of one or more of these bodies.

But the Quakers, an NGO observer, supported UNCTAD work and said the institution could contribute to the transition to disarmament through analysis of the economic issues of arms conversion, demobilisation of soldiers and reallocation of financial and other resources; facilitating exchange of experiences among Member States; and contributing to multilateral, bilateral and NGO efforts to provide technical assistance to economic and social aspects of disarmament.

The Quakers representative said the support for UNCTAD was based on their experience in Central America, East and Southern Africa and Indo-China -- areas which had suffered from violent conflicts.

Their experience had shown a number of outstanding economic and social problems in this area.

Military personnel not longer serving security functions might develop disruptive involvements in civilian economy, while demobilized and untrained excombatants could exacerbate severe unemployment problems. Both groups threat social development by armed banditry or interference in the civil economy.

In some instances in Central America, Quaker field staff are witnessing post-war economic development based on globalization and liberalization that "frustrates efforts to rebuild large sectors of civilian economies."

"The sudden imposition of unfamiliar deregulated markets on traditional economies has led to opportunistic investment and new concentrations of wealth, eroding traditional economic rights and opportunities, and this was leading to new conflicts and insecurities," the Quaker representative said.

While these were perhaps the most severe examples of post-conflict economic problems, in the post-cold war world there were many economies in transition wanting to convert arms industries and begin demobilization of large, costly armies, who were constrained by limited markets, investment and economic knowledge of how to proceed.

On the concerns that UNCTAD might be led into assessing military expenditures, along lines of studies by OECD, IMF and World Bank, the Quaker representative said there was no need for this and UNCTAD could confine itself to economic and social areas where military resources are voluntarily available for reallocation.

UNCTAD had already undertaken analytical and technical work in trade, technology transfers, and macro-economic planning that encompassed the issues. It was also well suited to facilitate exchange of experiences.

The WILPF said poverty and unemployment had increased as a result of the IMF/World Bank structural adjustment programmes forced on more than 80 developing countries and transition economies which required these countries to cut social spending, eliminate public sector jobs, suppress wages, promote exports, devalue currencies, privatize public-sector enterprises, deregulate and liberalize their economies. It had made life harder for women, men, children, workers, peasants and indigenous peoples and led to an environmental devastation on a monumental scale.

Under these conditions it had become very easy to manipulate ethnic, religious or tribal tensions before long armed conflict could break out. In the LDCs, where there were a few dozen such conflicts under way last year, massive numbers of people had been killed and many fruits of development efforts have been destroyed while millions of refugees had been created. The WILPF would ask UNCTAD in its programme on LDCs to explore the relationship between armed conflict and impact on these countries of an unjust international economic order.