Demilitarization for Development Act

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Demilitarization for Development 
Act''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) The world's governments spend $868,000,000,000 each 
        year to support military forces of more than 27,000,000 
        soldiers.
            (2) This expenditure for achieving security has itself 
        become a serious threat to security, absorbing 12 percent of 
        all government expenditures at a time when citizens in both 
        developed and developing countries face sharp cuts in 
        programs--such as health, education, research, and job 
        training--that provide the human building blocks for our common 
        future.
            (3) The United States and other developed nations bear 
        significant responsibility for excessive military expenditures, 
        accounting for 75 percent of world military spending and for 90 
        percent of arms transfers to developing nations, with the 
        United States being the world's leader in both categories.
            (4) The United States and other developed nations jointly 
        have a controlling vote in the International Monetary Fund, the 
        International Bank for Reconstruction and Development, and 
        other international financial institutions that have subsidized 
        excessive military spending in numerous countries by exempting 
        the military portions of a country's budget from audit and 
        assessment.
            (5) Developing nations also bear significant responsibility 
        for excessive military expenditures, spending $221,000,000,000 
        each year, or 4 times all receipts of foreign aid from all 
        sources.
            (6) In the developing world, where more than 900,000,000 
        people cannot read or write, military spending exceeds spending 
        on education.
            (7) In the developing world, where 1,000,000,000 people 
        never see a health professional and where more than 2,000,000 
        children die each year of preventable infectious diseases, 
        military spending is more than twice as high as spending on 
        health.
            (8) The lack of transparency, to both a country's citizens 
        and to international financial institutions, of the military 
        budget and of military ownership or other forms of involvement 
        in the civilian economy provides refuge for corruption and 
        undercuts the international financial institutions' efforts to 
        promote ``good governance''.
            (9) Ownership of businesses and investment funds and other 
        types of financial interests of armed forces in the civilian 
        sector of the economy in countries as diverse as Chile, China, 
        Ecuador, Guatemala, and Indonesia distorts prices and reduces 
        competition, and also increases the political power of armed 
        forces, thereby posing a threat to the transition to economic 
        and political freedom in the developing world that is a primary 
        goal of United States foreign policy.
            (10) Top-ranking United States and international officials, 
        including the Secretary of the Treasury, the President of the 
        World Bank, and the Managing Director of the International 
        Monetary Fund, have publicly recognized the urgent need to 
        reduce world military spending, and pledged to make policy 
        changes in their institutions to promote reductions.
            (11) Congress and the President have also made the 
        reduction of world military spending a goal of United States 
        foreign policy, and provided for the use of the financial 
        resources and technical capabilities of the international 
        financial institutions to achieve that goal, by enacting--
                    (A) section 60 of the Bretton Woods Agreements Act, 
                which requires the United States Executive Director at 
                the International Monetary Fund to report on methods to 
                promote reductions in military spending;
                    (B) the Foreign Operations, Export Financing, and 
                Related Programs Appropriations Act, 1993, which, in 
                its statement of managers, urges United States 
                executive directors at all the international financial 
                institutions to use the United States voice and vote to 
                promote reductions in military spending;
                    (C) section 570 of the Foreign Operations, Export 
                Financing, and Related Programs Appropriations Act, 
                1994, which requires the State Department to report on 
                countries' efforts to reduce military spending, 
                including regional force reduction talks; and
                    (D) section 1502 of the International Financial 
                Institutions Act, which requires United States 
                executive directors at the international financial 
                institutions to take into account, when deciding on 
                loan proposals, the proposed recipient's commitment to 
                providing accurate military spending data and ending 
                military involvement in the civilian economy.
            (12) Despite these high-level statements and requirements 
        in law, no significant progress has been made in establishing 
        either a mechanism for regional talks on mutual military 
        reductions or mechanisms within the international financial 
        institutions for--
                    (A) verifying through accepted auditing procedures 
                the accuracy of reported military budgets;
                    (B) receiving and assessing the justification for 
                various expenditures within military budgets as well as 
                the overall trends and amounts of such expenditures; 
                and
                    (C) ending military ownership and financial 
                interests in the civilian economy.
            (13) Dr. Oscar Arias, former President of Costa Rica and 
        1987 Nobel Peace Laureate, has joined with 67 citizens' groups 
        around the world to propose a practical plan to achieve the 
        goals of these high-level statements and requirements in law, 
        The Year 2000 Campaign to Redirect World Military Spending to 
        Human Development, which contains the following 6 proposals:
                    (A) The Security Council and General Assembly of 
                the United Nations call on all nations to commit to 
                meeting with their neighbors to identify and implement 
                confidence-building measures and mutual reductions in 
                military threats that will reduce the likelihood of 
                future conflicts. These nations will seek to achieve 
                substantial reductions in military forces and 
                expenditures by the year 2000.
                    (B) Special envoys be appointed by the United 
                Nations Secretary-General to organize these 
                demilitarization talks in various regions of the world.
                    (C) Every nation meet with its regional envoy to 
                present plans for regional security at reduced force 
                levels. These nations will also participate in 
                negotiations guided by the envoy in order to identify 
                military capacities and implement mutual force 
                reductions. Such negotiations will reduce the threat 
                that nations pose to each other due to the size, 
                proximity, and technological sophistication of their 
                armed forces.
                    (D) With savings from reduced military spending, 
                all nations, in cooperation with grassroots 
                organizations, implement economic reforms related to 
                demilitarization, such as the conversion of military to 
                non-military production, landmine clearance, community 
                reconstruction, and the reintegration of demobilized 
                soldiers.
                    (E) In support of the steps taken toward 
                demilitarization by developing countries, 
                industrialized nations condition their bilateral and 
                multilateral aid to promote demilitarization. They will 
                exchange debt forgiveness for military conversion 
                efforts, provide special funding for programs to assist 
                the demilitarization process, promote full transparency 
                and reductions in military budgets, and bring about the 
                end of military involvement in the civilian economy.
                    (F) All arms-exporting nations agree to a Code of 
                Conduct on arms transfers that would bar exports to 
                nondemocratic governments, countries engaged in armed 
                aggression in violation of international law, countries 
                that do not fully participate in the United Nations 
                Register of conventional arms, and governments 
                permitting gross violations of internationally 
                recognized human rights.
            (14) Citizens around the world are signing The Arias Peace 
        Pledge and communicating to their governments their support for 
        the proposals of The Year 2000 Campaign to Redirect World 
        Military Spending to Human Development.
            (15) The United Nations General Assembly is expected to 
        consider crucial components of this 6-point plan.

SEC. 3. PURPOSE.

    The purpose of this Act is to enhance international security by 
using the resources and expertise of the international financial 
institutions and the United Nations to redirect world military spending 
to human development.

SEC. 4. SPECIAL ENVOYS FOR MUTUAL DISARMAMENT.

    The President shall instruct the United States Ambassador to the 
United Nations to support in the Security Council, the General 
Assembly, and other United Nations bodies, resolutions and other 
efforts to--
            (1) appoint special envoys for conflict prevention to 
        organize and conduct, in cooperation with appropriate 
        multilateral institutions, mutual disarmament talks in every 
        region of the world in which all nations would participate, and 
        to report to international financial institutions on the degree 
        of cooperation of governments with these talks;
            (2) commit each member state to agree to meet with its 
        regional special envoy within 3 months of appointment to 
        deliver and discuss its proposal for regional (and, where 
        appropriate, international) confidence-building measures, 
        including mutual reductions in the size, proximity, and 
        technological sophistication of its and other nations' armed 
        forces, that would lead to significant cuts in threat levels 
        and military spending; and
            (3) commit each member state to agree to continue meeting 
        with the special envoy and such regional bodies and states as 
        the special envoy shall suggest to complete negotiations on 
        such confidence-building measures, with the goal of making 
        significant cuts in military spending by the year 2000.

SEC. 5. ALTERNATIVE SECURITY PLAN.

    Within 3 months after the date of the enactment of this Act, the 
President shall prepare and deliver to the Congress and to the 
Secretary General of the United Nations a report as described in 
section 4(2) that would detail the changes in other nations' forces and 
United States forces that would permit by the year 2000 a 50 percent 
reduction in United States military spending.

SEC. 6. UNITED STATES POLICY AT INTERNATIONAL FINANCIAL INSTITUTIONS.

    (a) Higher Priority for Demilitarization.--Title XV of the 
International Financial Institutions Act (22 U.S.C. 262o-262o-1) is 
amended by adding at the end the following:

``SEC. 1503. PROMOTION OF, AND REPORTING ON, DEMILITARIZATION 
              ACTIVITIES.

    ``The Secretary of the Treasury shall instruct the United States 
executive directors at the international financial institutions (as 
defined in section 1701(c)(2) of the International Financial 
Institutions Act) to promote, and to report annually to the Congress 
on, the establishment of lending facilities, debt forgiveness programs, 
and increased funding in lending facilities for demilitarization 
activities, including auditing of military budgets and reduction of 
military involvement in the civilian economy, the conversion of 
military to nonmilitary production, landmine clearance, community 
reconstruction, and the reintegration of demobilized soldiers.''.
    (b) Conditionality of Loans.--Title XV of the International 
Financial Institutions Act (22 U.S.C. 262o-262o-1), as amended by 
subsection (a) of this section, is amended by adding at the end the 
following:

``SEC. 1504. TRANSPARENCY OF MILITARY EXPENDITURES.

    ``Beginning 3 years after the date of the enactment of this 
section, the Secretary of the Treasury shall instruct the United States 
Executive Director at each international financial institution (as 
defined in section 1701(c)(2)) to use the voice and vote of the United 
States to oppose any proposal that the institution make a loan to the 
government of any country, other than to address basic human needs, 
unless the President of the United States determines that--
            ``(1) the recipient government has in place a functioning 
        system for, and, in the immediately preceding year, has 
        conducted, an independent civilian audit of all receipts and 
        expenditures in its military budget and other portions of its 
        national budget that fund activities of the armed forces and 
        security forces;
            ``(2) the recipient government has provided a summary of 
        the audit to the institution;
            ``(3) the institution has taken independent steps to 
        confirm that the audit is accurate; and
            ``(4) the recipient government has prepared and reported to 
        the institution an accounting of all ownership and financial 
        interest in revenue-generating enterprises by military 
        institutions and individuals acting on their behalf.''.
    (c) Report.--The Secretary of the Treasury shall, drawing on other 
Executive Branch resources as appropriate, prepare an annual report to 
the Congress that--
            (1) describes and evaluates steps being taken by the 
        International Monetary Fund and the International Bank for 
        Reconstruction and Development to comply with section 1504 of 
        the International Financial Institutions Act, and of steps 
        being taken by the Executive Branch to implement this 
        legislation; and
            (2) identifies specific additional measures that need to be 
        taken by the institutions to achieve full compliance, and an 
        action plan to ensure these measures are adopted.

SEC. 7. SENSE OF THE CONGRESS.

    It is the sense of the Congress that--
            (1) the United States should not provide economic 
        assistance, military assistance, or approve arms transfers or 
        related training, to any foreign government at any time during 
        which the United States is opposing loans to that foreign 
        government at international financial institutions pursuant to 
        section 1504 of the International Financial Institutions Act;
            (2) the President should designate the United States Agency 
        for International Development to be the lead agency for the 
        determinations made pursuant to such section; and
            (3) the President should report annually to the Congress on 
        the progress made by international financial institutions in 
        integrating military spending issues such as those raised in 
        this Act into the loan review process of such international 
        financial institutions.

Summary: Demilitarization for Development Act - Directs the President to instruct the United Nations (UN) Ambassador to support UN efforts to: (1) appoint special conflict prevention envoys to conduct mutual disarmament talks in every region of the world in which all nations would participate. (2) commit each member state to meet with its regional special envoy to discuss its proposal for regional and international confidence-building measures. And (3) commit each member state to continue meeting with the special envoy and suggested regional bodies and states to complete negotiations on such measures, in order to make significant military spending cuts by the year 2000. Directs the President to detail to the Congress and the UN Secretary General the changes in military forces that would permit a 50 percent reduction in US military spending by the year 2000. Amends the International Financial Institutions Act to require the Secretary of the Treasury to instruct the US executive directors at certain international financial institutions to: (1) promote and report to the Congress on the establishment of lending facilities, debt forgiveness programs, and increased funding in lending facilities for demilitarization activities. And (2) use their voice and vote to oppose any loans to a foreign government other than for basic human needs unless the President has determined that the recipient government has in place and has used a functioning system for independent civilian audits of its military budget, and has accounted for all ownership and financial interest in revenue-generating enterprises by military institutions and individuals acting on their behalf. Expresses the sense of the Congress that: (1) the United States should provide neither economic nor military assistance, nor approve arms transfers or related training to any foreign government while it opposes loans to such government at international financial institutions pursuant to the International Financial Institutions Act. (2) the President should designate the US Agency for International Development to be the lead agency for making such determinations. And (3) the President should report annually to the Congress on the progress made by international financial institutions in integrating military spending issues into their loan review process.