Organization: Penn State University
Date: Wednesday, 15 Apr 1992 01:18:52 EDT
From: <SXS30@psuvm.psu.edu>
Newsgroups: soc.culture.china
Subject: arm spending in asia

The following msg is fwded for your reference
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Subject:      Asia's Arms Spenders

   IPS, Manila, April 11 - India and Pakistan, belonging to one of the
world's poorest regions, led Asia's big arms spenders in a period when
defense expenditures are declining in most Asian countries, according to
a report of the Asian Development Bank (ADB).
   India leads the pack of big arms spenders if rankings were based on
the absolute amounts of money spent, according to the Manila-based ADB's
"Asian Development Outlook 1992" report.
   Looking at military spending as a proportion of gross domestic
product (GDP), Pakistan topped the list with 7.1 percent, followed by
Singapore and Taiwan with 4.8 percent each.
   On a per capita basis, Singapore, Taiwan and South Korea were the
leaders with annual average spending of $512, $320, $187 and $175 per
person, respectively.
   The ADB report thus concluded that Korea, Singapore and Taiwan are
the top three "Developing Member Countries" (DMCs) of the bank by at
least two of the three measures of arms spending.
   But looking over the record of the past few years, the ADB said that
in most DMCs defense spending as a proportion of GDP declined.
   Moreover, absolute military spending fell in real terms in China,
Indonesia, Burma and the Philippines.
   "South Asia, where per capita incomes are the lowest among the DMCs,
was the only region in which military expenditure grew faster than GDP
during the 1980s," the ADB report said.
   "This is undoubtedly one of the reasons why most of the countries in
South Asia have in recent years been struggling with unsustainable
fiscal deficits, price instability and falling growth rates," it added.
   The report cautioned against drawing the populist conclusion that
military spending hurts economic growth. Researchers have failed to show
that conclusively, it said.
   What existing data suggest, however, as demonstrated by Korea,
Singapore and Taiwan, is that stronger economic growth makes possible
bigger defense budgets.
   "The gravest criticism of military expenditure is that it dilutes
efforts at poverty reduction by crowding out government spending on
social sectors," the ADB report said.
   The actual record suggests, however, that state spending on health
and education is more a matter of priorities rather than pre-emption by
military spending, the bank said.
   Korea, Burma and Thailand, for example, spent a big portion of their
budgets on both defense and social spending. But in the case of India
and Pakistan, the criticism seems to be right on target.
   These two countries spent the least on education and health among ADB
DMCs, but spent a big chunk of their budgets on the military.
   Last November, for example, the European Community's Council of
Ministers adopted a resolution saying poor countries that reduce
"excessive" military spending would be rewarded with more aid, while big
arms spenders would suffer cutbacks.
   In October, during their joint annual meeting in Bangkok, officials
of the International Monetary Fund and the World Bank urged countries to
reduce "non-productive" military spending.