I
104TH CONGRESS
2D SESSION
H. R. 4306
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.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 28, 1996
Mr. KENNEDY of Massachusetts (for himself and Mr. MILLER of California)
introduced the following bill; which was referred to the Committee on
International Relations, and in addition to the Committee on Banking
and Financial Services, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall within
the jurisdiction of the committee concerned
A BILL
To enhance international security by using the resources
and expertise of the international financial institutions
and the United Nations to redirect world military spend-
ing to human development.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
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 coun-
tries 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 na-
tions 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 na-
tions jointly have a controlling vote in the Inter-
national Monetary Fund, the International Bank for
Reconstruction and Development, and other inter-
national financial institutions that have subsidized
excessive military spending in numerous countries by
exempting the military portions of a country’s budg-
et from audit and assessment.
(5) Developing nations also bear significant re-
sponsibility 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 coun-
try’s citizens and to international financial institu-
tions, of the military budget and of military owner-
ship or other forms of involvement in the civilian
economy provides refuge for corruption and under-
cuts 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 coun-
tries as diverse as Chile, China, Ecuador, Guate-
mala, and Indonesia distorts prices and reduces
competition, and also increases the political power of
armed forces, thereby posing a threat to the transi-
tion to economic and political freedom in the devel-
oping world that is a primary goal of United States
foreign policy.
(10) Top-ranking United States and inter-
national 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 reduc-
tions.
(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 capabili-
ties 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 pro-
mote reductions in military spending;
(B) the Foreign Operations, Export Fi-
nancing, 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 re-
ductions in military spending;
(C) section 570 of the Foreign Operations,
Export Financing, and Related Programs Ap-
propriations Act, 1994, which requires the
State Department to report on countries’ ef-
forts to reduce military spending, including re-
gional force reduction talks; and
(D) section 1502 of the International Fi-
nancial Institutions Act, which requires United
States executive directors at the international
financial institutions to take into account, when
deciding on loan proposals, the proposed recipi-
ent’s commitment to providing accurate military
spending data and ending military involvement
in the civilian economy.
(12) Despite these high-level statements and re-
quirements 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 justifica-
tion for various expenditures within military
budgets as well as the overall trends and
amounts of such expenditures; and
(C) ending military ownership and finan-
cial 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 As-
sembly 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