7:12 AM Dec 7, 1995


Geneva 6 Dec (Chakravarthi Raghavan) -- An Ad Hoc Working Group at the UN Conference on Trade and Development on Structural Adjustment for the Transition to Disarmament (SATD) concluded its work last week, without any agreement on substantive issues, but asked the Trade and Development Board to consider, in the preparations for UNCTAD-IX, whether a work programme should be envisaged.

Consideration of the SATD at UNCTAD was one mooted at the Cartagena UNCTAD-VIII in 1992, but it took a while for an Ad Hoc working group and its terms of reference settled.

The discussions last week showed little enthusiasm for it from many governments (North and South), considerable support from non-governmental organizations, with Netherlands in favour and Egypt against emerging as the principal interlocutors in the formal and informal meetings.

It was clear that for any future activity, the secretariat might have some leeway in terms of policy analysis and research, and in joining other UN agencies in exploring and supporting programs for transition to disarmament, none of the major industrial countries nor several of the influential developing countries look favourably for an UNCTAD intergovernmental process in this area.

The Dutch delegate, a development/disarmament expert, in several interventions, during informal discussions, is reported to have stressed that in its own bilateral policy dialogue on development aid, the Netherlands was insisting on transparency in military budgets and plans. Often, he suggested, the recipients of Dutch aid themselves welcomed this -- since the civilian side of the governments were able to come to grips with the military side and its budget and non-transparency.

In advocating consideration of this issue at a forum like UNCTAD, the Dutch delegate noted that the International Monetary Fund and the World Bank were now pushing, as part of their overall Structural Adjustment Programmes and its limitations on government expenditure, for reductions in military budgets. But as in the SAPs, the Fund/Bank view was likely to be biased in a dogmatic single world model and views about 'security', whereas developing countries would be better off in having the discussions and debate on this in fora where one-country-one-vote concepts prevailed.

The delegate said Netherlands planned to take up the issue within the Development Assistance Committee (DAC) of the OECD and hoped to persuade that body that UNCTAD would be a useful, open and universal forum for looking at these complex economic and development questions.

Some NGO observers later noted that any Fund/Bank view would be heavily influenced by the US global security views and considerations -- with those in the South whose security considerations coincide with those of the US getting off lightly, while others with independent or contrary views and considerations facing the weight of IMF/Bank conditionality on this score.

The UNCTAD secretariat documents, as well as other outside specialised studies, have made the point that the security considerations, on which military budgets have to be based, involve country-specific and regional considerations.

Egypt which intervened several times against any consideration or work on the substantive issues at UNCTAD, advanced several arguments. A principal argument with some merit was that the level of security needs of a country has to be judged and accepted in the context of regional security.

Next only to Israel, Egypt is the largest recipient of US aid and military aid. With money fungible, it is not easy to judge whether its military aid and expenditures is a drag on the economy or in fact a benefit. In any event, its particularities may not apply to rest of Africa.

But it was not always clear whether Egypt was speaking for itself or for other African countries.

A Chairman's summary at the final meeting on 1 December said that delegations agreed that all countries should consider the possibilities that exist in their specific and individual situations for reduction of military expenditures and for channelling savings to socially productive uses.

Several delegations discussed the relationship between reduction of military budgets in the industrialized countries and flow of development finance to the developing countries, with some expressing disappointment that expectations of increased aid flows had not been realised.

Notwithstanding uncertainties associated with the process of conversion from military to civil uses, it would be possible to realize some savings and re-channel them to increase availability of development finance and ODA.

While some were of the view that it was in the interests of developing countries to cut excessive military spending and use resources to development, one delegation (not identified in the summary but essential an Egyptian view) pointed to the absence of consensus on either meaning or measurement of excessive military expenditure and a similar lack of consensus on 'legitimate' military expenditure.

SATD and its economic dimensions, some delegations felt in this connection, was multifaceted and could not be ideal with in isolation from other technical, military and security dimensions. SATD's relationship with macro-economic issues -- interest rates, financial flows and investment -- was also adverted to by a delegation, according to the summary.

In the context of military budgets, there were references to the use of armed forces for civilian purposes including major public works, in combating locusts, in protection of environment including marine environment and in responding to natural disasters. But the view was also expressed that armed forces were not be best instruments for such activities.

Other issues brought up in the discussion referred to the importance of market access for output of the converted (military to civilian) activities, access to technology and the role of the State in SATD.

In terms of institutional issues around SATD, the chairman's summary said that delegations agreed disarmament could be implemented more efficiently if the security context in the world improved.

However, UNCTAD should not enter into security issues or size and character of the military expenditure, and any concern should be with "post-disarmament" processes.

There were references to the relationship of UNCTAD with other organizations, and the fact that there was no lead agency within the UN system addressing these questions. But it was felt by some others that such a role should be assumed by the UN General Assembly.

One delegation supported the view that UNCTAD should contribute to the world hearings on relationship between disarmament and development proposed by the UN Secretary-General and be a coordinating agency on trade-related issues in this area.

While some delegations suggested that UNDP, UNIDO or ILO were competent to deal with the specific issues raised, others noted that while the particular issue may be outside UNCTAD mandate, UNCTAD had a specific trade, economic and development focus and this could usefully be brought to bear in debates on this issue wherever it may be held.

The view was also advanced that the issue could not be discussed in isolation and that technical military matters would be involved and these could not be discussed with military and security experts. Arms trade was not an appropriate subject for consideration in UNCTAD.

Several delegations though stressed the importance of exchange of national experiences to enable optimization of SATD, once the decisions to move in that direction had been made at country level. UNCTAD, in cooperation with other UN agencies and institutions like the OAU and the OAS and research institutes could provide a forum for dialogue and exchange of experience.

In terms of future work, some delegations questioned the need for an UNCTAD intergovernmental body to deal with SATD, while a group of delegations expressed their misgivings on UNCTAD undertaking SATD work. They argued that UNCTAD was not the appropriate forum and expressed strong opposition to any continued future work or discussions.

However other delegations thought that there were economic, development and trade aspects of SATD and UNCTAD could address these aspects without getting into security issues which were outside the mandate.