Arms Sales Monitor #11-12, January-February 1992

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(Issue No. 11-12, January-February 1992)




Editorial
Arms Sales Driving Threat Scenarios

A 1990 GAO report found that the technology gap between developed
and developing countries' military arsenals was narrowing quickly.
The report noted that the military challenge posed by Third World
nations no longer takes the familiar form of Soviet weaponry, but
rather American and West European. GAO concluded, "If our weapons
are to be effective against the equipment available to potential
LIW [low-intensity warfare] opponents, they need to be designed to
operate against sophisticated Western European- and US-designed
hardware...."

Thus, now that the evil empire is gone, US and US allies' arms
sales policies perpetuate Third World arms races and instability,
providing the new "threat" that justifies $300 billion military
budgets and next generation weapons.  

During the past two months, intelligence and military officials
have paraded before Congress testifying to the dangers of Russian,
British, French and Chinese arms sales, while defending US sales as
being "stabilizing," "legitimate" and "defensive." 

The United States is the leading vendor of weapons to the
developing world---accounting for 45 percent of the market in 1990.
Since not all arms selling states have the same view of which
countries are "irresponsible" as does the US leadership---and since
the US is selling arms at record-breaking levels---sales by the
other major suppliers to Syria, Iran, Pakistan and other states of
concern will continue. Only if the US shows some restraint can it
ask that other countries slow or stop their arms sales to these
countries. 

Recognizing this dilemma, Secretary of State Baker testified in
February "It's very hard, of course, for us to say to these
countries [Russia and East European], `You cannot sell conventional
weapons,' if we ourselves want to retain the right to sell
conventional weaponry. And to some extent, we do want to retain
that right...."

Andre Kokoshin, a high-ranking Russian military official, also
understands this truth. He said recently of Russia's decision to
continue arms sales, "I think if other countries would have started
reducing arms deliveries, this would have had some effect, but it
turned out that most democratic countries are not stopping arms
sales, but increasing them." 

Sales in progress                                             

Thailand buys F-16s  1 January---Thailand signs an LOA with General
Dynamics for 18 F-16 models A&B fighter aircraft, additional to the
18 they already have. Congress was notified of the $400 million
deal last September. Deliveries are scheduled to begin in 1995.
  

Saudi Patriot sale set to be finalized  5 January---The official
30-day clock for Congressional action to block the proposed $3.3
billion sale of 14 Patriot anti-missile fire units and 758 Patriot
missiles elapses, clearing the way for the LOA to be signed. 
  Although Congress was in recess
during the formal notification period, the administration had the
approval and support of many influential voices in Congress for the
sale (see ASM no. 9-10 p. 2).

Congress receives "Javits List"  14 February---The DSAA sends the
HFAC and SFRC its annual classified estimate and justification of
arms sales for the year. The report is mandated by section 2765(a)
of the AECA, which calls for a listing of all sales and licensed
commercial exports of major weapons or weapons-related defense
equipment valued at $7 million or more under consideration by the
administration, with an indication of which sales and commercial
exports are deemed most likely to result in the issuance of an LOA
or an export license during the upcoming year. It also requires,
among other things: estimates of total amounts of sales to each
foreign nation; an explanation of the national security
considerations involved in the sale; an analysis of the
relationship between the sales being considered and arms control
efforts involving the recipient state; and an analysis of the
sales' impact on regional stability.  

The list is later reported by the AP to total $35 billion, most of
it slated for countries in the Middle East. A $5 billion sale of 72
F-15 aircraft to Saudi Arabia, while mentioned as being under
consideration in a cover letter to the list, was not contained in
the list. (It is not clear whether the $35 billion figure includes
this sale.) Of those planes, 24 reportedly would be model "F" and
48 would be the ground attack "E" variant. The model "E"---flown by
the USAF---has not yet been sold abroad. If sent to Congress, the
F-15E sale is likely to be highly controversial. 
Patriot missile sales under consideration reportedly account for
nearly $16 billion of the list. Countries which have requested or
expressed interest in Patriot missiles in the past year (and not
yet received them) are Kuwait, Bahrain, the UAE, Qatar, Turkey and
South Korea.  

Chinese sanctions dropped for written MTCR pledge  21
February---The State Department lifts trade sanctions invoked
against two Chinese companies last year because of missile-related
technology transfers to Pakistan. Cancellation of the sanctions was
a condition required by China for its written pledge to adhere to
the MTCR export guidelines.   

The following week a report mandated by PL 101-510 (FY91 defense
authorization) "on certain Chinese firms engaged in missile
technology proliferation activities" is sent to Congress.  

Several transfers announced in late February  25-27 February---the
DSAA notifies Congress of the Navy's intention to lease defense
articles to Korea; the State Department proposes to license the
export of "major defense equipment" to Greece, the UAE and Turkey 


Sales policy toward Iran and Syria altered  6 February---A notice
placed in the Federal Register today announces the revision of the
Export Administration Regulations to reflect changes made in the
new Commerce Control List implemented last September.According to
the new policy, applications for export to Iran and Syria of items
subject to national security controls will generally be denied if
the export is destined to a military end-user or for military
end-use. Aircraft, missile, CBW and nuclear-relevant technologies
"will generally be denied" to Iran and Syria. "Applications for
non-military end-users or for non-military end-uses will be
considered on a case-by-case basis."  

The notice also identifies countries currently designated by the
State Department as "supporters of international terrorism": North
Korea, Cuba, Libya, Iran, Iraq, and Syria.  

Speeches, letters, etc...                                      

Report on Iraqi ceasefire compliance  14 January---President 
Bush reports to the Speaker of the House on Iraqi compliance with
the UN ceasefire, as required by the resolution authorizing the use
of force against Iraq (PL 102-1). Iraq has not impeded efforts to
destroy identified weapons of mass destruction and ballistic
missiles, Bush writes; however, "Iraq continues to be uncooperative
and obstructive with respect to inspection of sites identified by
the Special Commission and the IAEA (based on their own sources of
information) as potentially involving clandestine, proscribed
activities."

Aspin's "Iraq equivalent" formula  22 January---HASC Chairman Les
Aspin, issues the first of a flurry of papers on future US military
choices, this one entitled "An Approach to Sizing American
Conventional Forces for the Post-Soviet Era." In it, Aspin develops
an "Iraq equivalent" system for assessing future Third World
threats to the United States. "One Iraq equivalent is equal to the
amount of offensive power that Iraq possessed prior to Desert
Storm." According to his data, China would rate a 1.4 and
present-day Iraq a .4. Based on this system, Aspin calculated the
need for substantially reduced US force levels.   

Joint Chiefs of Staff Chairman Colin Powell, defending the
administration's "base force" plan, criticized Aspin's scheme,
saying "Every year, we would have to go up [to Capitol Hill] and
explain `Is Panama still .152 Iraqs or has it become 1.01 Iraqs'." 


Pressler amendment proliferation  24 January---Sen. Larry Pressler,
just back from a trip to South Asia, where he discussed the
practical implementation of the legislation he sponsored ("the
Pressler amendment") which conditions US assistance to Pakistan on
that country's not possessing a nuclear weapon, speaks on the
Senate floor about moving "Toward a New Arms Control Regime."
Pressler envisions a UN regime "whereby developing countries would
be rewarded for reducing armaments and for showing substantial,
certifiable results in reducing armaments." 

"This year," he says, "I plan to propose a series of amendments
using the Pressler amendment approach to reduce weapons worldwide
throughout the 1990s. ...There is no reason that the countries to
which we give aid and extend favorable trade treatment should be
increasing their armaments, be they nuclear or conventional. Under
legislation I shall propose, the President would certify whether
various nations are reducing their arsenals of nuclear, chemical
and conventional arms. If they reduce their military, as we have
reduced ours and are reducing ours, then they would be rewarded
with more favorable US aid and trade relationships."  

US companies assisted Iraq with weapons programs  3 February---Rep.
Henry Gonzalez, Chairman of the Banking, Finance and Urban Affairs
Committee says that, contrary to a heretofore undisclosed,
classified report by the Bush administration, US firms did directly
contribute to Iraq's conventional and unconventional weapons
capabilities. His committee, which uncovered evidence of this
cooperation during its investigation of the Banca Nationale del
Lavoro (BNL), specifically found US companies' complicit in work on
the Condor II missile under development in the 1980s. See the
Congressional Record, pp. H208-15 for a very interesting and
detailed account of the Committee's findings.

"Third World Military Power"?  6 February---Senate Intelligence
Committee members John Glenn and John Warner write to Secretary of
Defense Cheney, urging that the DOD publish an annual, unclassified
review of international proliferation developments, similar in
concept to Soviet Military Power, which the Defense Intelligence
Agency has published since 1981.

They say publication of such a document would "help to strengthen
our nonproliferation legislation, to assist in the development of
effective responses to such threats, and to deter illicit nuclear
trade. While we are aware that the public identification by a US
intelligence organization of certain countries as either a
confirmed or suspect proliferator could have certain diplomatic and
political implications, we believe that disclosure of this
information would, on balance, be a constructive contribution to
the public policy debate."

US arms sales to Mideast  19 February---Citing former President
Jimmy Carter's 1976 statement that "The United States cannot be
both the world's leading champion of peace and the world's leading
supplier of the weapons of war," Rep. Timothy J. Penny enters into
the Record the accounting of US arms sales to the Middle East
prepared by Lee Feinstein of the non-governmental Arms Control
Association in Washington. Feinstein found that in the 17 months
since Iraq's invasion of Kuwait, the US administration has sold
more than $17 billion of arms to the Middle East, about $6 billion
of those sales transpiring since President Bush announced his
Middle East Arms Control Initiative last May. 

Feinstein notes that: "Administration officials have described the
transfers as consisting primarily of defensive weapons designed to
promote stability in the region. The announced transfers, however,
include weapons from each of the five categories of arms identified
in the 1990 Conventional Forces in Europe (CFE) agreement as the
primary weapons used for `launching surprise attack and for
initiating large-scale offensive action.' These armaments include
battle tanks, armored vehicles, heavy artillery, combat aircraft,
and attack helicopters."   

"Do as we say, not as we do"  26 February---In a floor speech Rep.
Mel Levine says the apparent recent decision by the Russian
government to use arms sales to facilitate its economic recovery
"represents a significant failure for Bush administration policies
toward arms control and the new republics of the CIS. The
international community, particularly the newly liberated countries
of Eastern Europe and the CIS, has turned to the United States for
leadership on this issue. But the administration's policy toward US
arms sales has sent the message that we approve of selling highly
sophisticated weapons to unstable regions like the Middle East." 
"The Bush administration must back up its words on arms control
with action. If the United States is to retain the leverage and
influence necessary to dissuade other countries from making
destabilizing sales, we must stop making destabilizing arms sales
of our own," says Levine.   

Notes from some hearings                                  

   CIA on The Threat 

15 January---The Senate Governmental Affairs Committee hears
testimony on weapons proliferation in the wake of the Soviet
Union's disintegration from Director of Central Intelligence,
Robert Gates. Due to the increased (proportionally, anyway) threat
of "proliferations," the CIA recently formed a "Nonproliferation
Center," which Gates says will "better formulate and coordinate
intelligence actions in support of the government's policy." 

Nuclear proliferation:  Gates says press reports alleging that
Soviet nuclear materials have been offered on the black market can
not be corroborated. More alarming and realistic than this
prospect, he says, is the potential for "brain-drain" of
former-Soviet nuclear and other weapons scientists and technicians
to developing countries of concern. "This is the area that causes
us the greatest concern, more than a loss of materials or weapons
and that sort of thing."
 
Missile proliferation:  Gates notes in passing that Saudi Arabia is
"expanding [its] CSS-2 missile support facilities." These missiles,
with a range of 2700 km, are by far the longest range missiles in
the region. He also notes that Egypt has a missile production
facility "that could begin operations at any time." North Korea has
"modified its Scuds giving them a range greater than Iraq's and has
sold them to Iran and Syria. Pyongyang is not far from having a
much larger missile for sale, one with a range of at least 1000
km," he asserts. This is somewhat surprising, as no flight tests of
a missile anywhere near this range have been reported in the press.

Gates says "There is good news on the [missile] proliferation
front. ...Israel has publicly announced that it will abide by the
MTCR guidelines and, according to Israeli press, will not cooperate
any longer with South Africa on BM development. Brazil has
announced its space launch program has been placed under civilian
control, and the Argentine government said that it is investigating
the suspended Condor II program...."

Threat to US:  Correcting many misperceptions, Gates remarks that
"Only China and the Commonwealth of Independent States have the
missile capability to reach US territory directly. We do not expect
increased risk to US territory from the special weapons of other
countries--in a conventional military sense--for at least another
decade." Chairman John Glenn asks how many Third World ballistic
missiles will be able to reach the United States by the year 2000
and whether these would be countries threatening to the US. Gates'
aide, Gordon Oehler, responds that those countries thought most
likely to develop ICBMs are "Not any of the major Third World
countries that we're interested in" for political reasons. Without
naming names, he goes on to say that these are the "counties with
the more advanced space-launch vehicle programs" [Israel, India,
Brazil].

CBW proliferation:  "Most of the major countries in the Middle East
have chemical weapons development programs, and some already have
stockpiles that could be used against civilians or poorly defended
military targets. Most countries have not yet equipped their
delivery systems to carry weapons of mass destruction...." However,
Gates says, Syria "appears to be seeking assistance from China and
Western firms for an improved capability with CW or BW warheads."
Libya's CW program continues, Gates asserts, noting "It is
estimated that the production facility at Rabta has produced and
stockpiled as many as 100 tons of chemical agents." Iran, he notes,
"says it has a right to chemical weapons in light of Iraq's use of
CW against them; we believe it has exercised this option."

Iraq still menacing:  Gates says that although "there is no
question that Desert Storm significantly damaged Iraq's special
weapons production programs," Iraq still poses "a great challenge."
Without UN ceasefire sanctions and inspections in place, Gates says
the Iraqis would be able to produce nuclear weapons "in a few,
rather than many, years"; "modest quantities of chemical agents
[chemical warfare agents?] almost immediately, but it would take a
year or more to recover the CW capability it previously enjoyed";
and "because only a small amount of equipment is needed, the Iraqis
could be producing BW materials in a matter of weeks of a decision
to do so."

Pakistan-India nuclear arms race:  The CIA has "no reason to
believe that either India or Pakistan maintains assembled or
deployed nuclear bombs," says Gates, but his assistant adds that
"both countries have all of the parts or can make the parts on very
short notice. ...But we believe that they would not want to
assemble them for safety reasons." Glenn asks whether reports that
Pakistan has converted F-16s for nuclear-weapons delivery are true.
Gates defers, saying only "We have information that suggests that
they're clearly interested in enhancing the ability of the F-16 to
deliver [nuclear] weapons safely. But ... they don't require those
changes, I don't think, to deliver a weapon." In a closed session,
Gates says he will tell "precisely what they might be interested in
doing to enhance the F-16." 

                             DIA on The Threat

22 January---Robert Gates and Lt. Gen. James Clapper, Director of
the Defense Intelligence Agency, testify before the Senate Armed
Services Committee. Gates testimony echoes that of 15 January,
although somewhat modified.

Making much less-threatening predictions than are often heard,
Clapper says that Pakistan and India "both may deploy short-range
ballistic missiles by the end of the decade," and "based on the
scope and pace of their efforts, we judge North Korea could have a
nuclear weapon in two or three years."

"I am concerned about the proliferation of conventional weaponry of
ever-increasing sophistication to some of the most unstable parts
of the world, causing a potential threat to our forces or those of
our allies," Clapper says.  

                   HASC Defense Industrial Base Hearings

23 January---The Defense Industrial Base Panel of the HASC holds
its third hearing on the impact of declining defense budgets on the
ability of the US to maintain a viable defense industry. The
previous two hearings, in Los Angeles and Oklahoma City, heard from
industry, military, academic and community leaders about the local
impact of budget cuts. 

Today's hearing features Jacques Gansler (The Analytical Sciences
Corporation), Jack Nunn (Office of Technology Assessment, US
Congress), James Blackwell (Center for Strategic and International
Studies), Jeffrey Joseph and Gen. Clarence McKnight (US Chamber of
Commerce). 
The panelists criticize the lack of strategy for a rational
down-sizing of the arms industries. Nunn, one of the authors of the
OTA report Redesigning Defense, urges Congress in his testimony "to
consider the downside implications of using foreign sales to
maintain production lines, including an assessment of the long-term
risks to US national security from the proliferation of advanced
conventional weapons throughout the world."

On 5 February the Panel holds another hearing, this one with
Nicholas Torelli (Deputy Assistant Secretary of Defense for
Production Resources), Peter McCloskey (Electronics Industries
Association), and Lt. Gen. (ret.) Lawrence Skibbie (American
Defense Preparedness Association) testifying. Torelli defends the
administration's new weapons procurement plan of "prototyping but
not producing," and McCloskey, on behalf of much of the arms
industry, criticizes it.

             State Department's Human Rights Report Critiqued

5 February---The subcommittee on Human Rights and International
Organizations of the House Foreign Affairs Committee holds hearings
on the State Department's just-released Country Reports on Human
Rights Practices for 1991. 

Joseph Eldridge, Director of the Lawyers Committee for Human
Rights, says the staff of the Human Rights and Humanitarian Affairs
Bureau of the State Department "deserve credit for their
conscientious and professional undertaking of this important task."
But, says "we are often hard pressed to discern the connection
between the Country Reports' characterization of human rights
conditions in a country and the conduct of US foreign policy toward
that country." He cites the accurate descriptions in last year's
report of abysmal human rights violations in Peru, Colombia and
China, which did not preclude those countries receiving military
aid or preferential trade status. 

Law being flouted:  Citing the examples of Turkey and Guatemala,
Eldridge contends that contrary to the law [see box] military aid
has been routinely granted to countries deemed "strategically
important" even though they are found by the administration to have
egregious human rights records. Turkey, he notes, has taken some
"positive formal steps" on human rights, including the ratification
of the UN Convention against torture and the partial
decriminalization of the use of the Kurdish language.
Unfortunately, although "there is routine use of torture, directed
against persons charged with common crimes, as well as political
offenses," Turkey continues to receive a half a billion dollars in
military aid a year. 

In Guatemala, Eldridge suggests that aid should be shifted from
Economic Support Fund (ESF) grants---which are effectively blind
grants---to Development Assistance grants, which are earmarked for
specific projects. "This shift would enhance accountability and
inhibit the Guatemalan government from simply using ESF funds to
make up for cuts in military assistance," he says.

Eldridge makes several good recommendations, among them:

* Congress should undertake a comprehensive review of security
assistance policies and practices and should demand compliance with
existing laws. 

* The Annual Integrated Assessment of Security Assistance (AIASA)
reports---yearly assessments of security needs prepared by the US
embassy in potential recipient countries---should include an
evaluation of the effect of security assistance on respect for
human rights and should identify specifically the external threat
to the aid-recipient country, as well as the United States'
national security interest in providing assistance. 

* A high-level inter-agency group should be established to review
and coordinate human rights policy decisions; the group's
jurisdiction should include all US security assistance, arms sales
and multilateral and bilateral economic aid.

* The US should make greater use of arms and trade embargoes
through the UN, CSCE, OAS, World Bank and IMF to influence human
rights practices in member-states.

Concluding, he notes that encouraging respect for human rights
among allies is important since stable governments make the best
allies. "Governments that allow freedom of association and freedom
to participate in the political process are less likely to be
governments that go to war or create international disorder."

State Department biased:  Holly Burkhalter, of Human Rights Watch,
comments on the objectivity of the State Department in its human
rights reporting. While last year's report on Peru was honest, this
year's is "more accommodating" to Peru in order to release military
aid being held up by Congress, she asserts.  Burkhalter notes a
disparity in tone used when the report describes very similar
actions by the Sendero Luminoso and the Peruvian armed forces. "It
is important to note that the armed forces engage in precisely the
same practices: extreme torture, mutilation of bodies, gouging out
of eyes, castration, decapitation, burnings, killing of small
children, etc. ...Yet the State Department provides no such detail
when it comes to the army." 

5 February---Secretary of State James Baker makes the
administration's annual presentation on foreign policy to the SFRC.
(He testifies the next day before the HFAC.) 

Pressler amendment under assault:  In answer to a question from
Sen. Larry Pressler, Baker says that in the administration's legal
opinion, the Pressler amendment (which prohibits military aid to
Pakistan unless the administration can certify that Pakistan is not
in possession of a nuclear weapon) does not apply to commercial
arms sales or exports. "Having said that, I also would say that we
limit the commercial sales and we don't approve any that contravene
either the letter or the spirit of the Pressler Amendment."

Baker goes forth from here to make the broader point that, in his
view, the United States too often sacrifices economic prospects for
foreign policy gains. The US "will only be strong politically,
diplomatically, and militarily as long as we retain and maintain
our economic strength. So I don't think that commercial sales that
do not contravene the letter or spirit of the amendment are things
that we ought not to permit to go forward."

                   Bartholomew on Russian Arms Control 

5 February---Under Secretary of State for International Security
Affairs Reginald Bartholomew and Assistant Secretary of Defense for
International Security Policy Stephen Hadley testify before the
SASC. Bartholomew reports on a trip he headed to Moscow, Kiev,
Minsk and Alma Ata in January.

Export controls:  Russian officials are in the process of drafting
national export control legislation. Bartholomew's delegation
explained the legal basis for US export laws, and "urged Russia and
the other newly independent states to place criminal sanctions on
individuals or companies who provide assistance to irresponsible
foreign nuclear or chemical weapons programs [irresponsible?],"
which would parallel US laws and regulations. Following
Bartholomew's trip, "President Yeltsin publicly announced that
Russia will put in place export control laws, including controls on
dual-use technologies." 

The delegation also briefed officials in Kiev, Minsk and Alma Ata
on international export control norms and US policies. "We plan to
follow up with additional meetings with all 11 CIS member states on
non-proliferation, export controls, and arms transfers."

MTCR, NPT and arms sales:  "The Russians told us that Russia would
continue the Soviet NPT obligations, including the depositary
function, and was reviewing its position on full scope safeguards
as a requirement for nuclear supply. They indicated interest in
cooperating in regional non-proliferation efforts in South Asia and
on the Korean peninsula. On MTCR, Russia reaffirmed the Soviet
Union's 1990 Summit commitment to observe the MTCR guidelines."

"In every capital, we stressed the common interest in ensuring that
transfers of conventional weapons do not exacerbate instability,
particularly now that there may be economic pressures to export
arms. We specifically cited Iran, and the need not to build another
Iraq. We received a positive response in each capital. The Russians
specifically said they would continue the Soviet Union's commitment
to the conventional arms transfer guidelines issued at the October
18 five-power meeting in London."

Naval Intelligence on The Threat

5 February---Rear Admiral Edward Sheafer, Jr., Director of Naval
Intelligence, delivers that office's annual classified overview to
the Seapower, Strategic and Critical Materials Subcommittee of the
HASC. The following is drawn from the 82-page unclassified version
of his testimony.

Sheafer describes a chaotic post-Cold War world where countries are
no longer constrained by fear of evoking a superpower nuclear
confrontation. "Students of history," he says, "recognize that
there will never be a world totally free from challenges to US
national interests or to the ability of the US Navy to carry out
its assigned missions." Further, he muses, "it appears that about
every 15 years we have a major crisis that evolves into conflict
that involves US forces. ...In the future, such conflicts are
likely to pose an increasing threat to other nations and to US
military forces as more modern weapons proliferate throughout the
rest of the world." 

Persian Gulf:  Sheafer says that Iraq, despite UN sanctions, still
maintains one of the largest/strongest military forces in the Gulf
region. Iran, he says, has an ambitious weapons procurement
program; it maintains an arms supply relationship with Russia,
"with North Korea delivering Scud-Cs and China providing CSA-1
SAMs, F-7 aircraft, and artillery in 1991." 

Sheafer says that "despite vast expenditures on military forces,
the Gulf Cooperation Council states are not prepared to defend
themselves individually or collectively against their larger
neighbors. The Saudis have long-term plans to expand their military
with the purchase of equipment. Even in the long run, however, it
is doubtful that the Saudis would be able to counter threats from
Iran or Iraq completely. The United States, or a coalition, would
have to be called upon again to provide protection or to repel
aggression."

Korean peninsula:  "A new agreement, signed between the two Koreas
in December 1991, replaces the 1953 North Korean-U.S. UN Armistice.
The new agreement pledges reconciliation, nonaggression, and
cooperation for the peninsula. ...[W]ithout a nuclear option, North
Korea's military, with its growing general obsolescence, would be
capable of little beyond defense and domestic regime preservation."

Europe:  "Western Europe, our closest military partner and one of
our largest economic partners, poses no military threat to the
United States except through export of arms that are roughly equal
to ours in overall lethality and technical sophistication."

Eastern European arms sales are also a problem: "Although economic
conversion would benefit them far more over the long-term, few
states can resist the short-term profits of arms
production---partly because of newly-established democratic systems
pressing governments to maintain employment. The region can supply
medium-to-low technology and is positioning itself as a supplier of
spares for ex-Warsaw Pact military equipment---a long-term market
due to continued sales and the many copy/derivative systems
employed by developed nations. Eastern Europe is also a potential
source of chemical and biological weapons and their delivery
systems, since virtually all of these countries have had military
chemical and biological warfare programs and/or have produced the
associated precursor chemicals."

Latin America:  He outlines the defense industries of various
countries, saying "From a military standpoint, one of the most
important developments in Latin America is the emergence of a
modest high-technology base, a growing production infrastructure,
and the economies of scale inherent in mass production. ... Chile
produces increasingly sophisticated small arms, ordnance, aircraft
and armored cars for export. Although exports are limited, the
major firm, Cardoen, continued to expand its capabilities during
1991 when it purchased the world's leading midget submarine
manufacturer from Italy." He notes, though, the many failures Latin
American arms industries have had: Argentina has yet to complete
any of the submarines licensed from Germany that it began producing
in the early 1980s; two of Brazil's three major arms producing
companies face bankruptcy. 

On the missile race once thought incipient in South America,
Sheafer notes that "President Menem officially dismantled
Argentina's long-range CONDOR II missile program in 1991. Brazil
has made only limited progress with its SONDA IV ballistic missile,
which will not be launched until at least the late 1990s." 

Naval threat:  "Over the next ten years, China, the CIS, Germany,
The Netherlands, and Sweden will remain the primary purveyors of
conventional submarines to the ROW [Sheafer's acronym for "rest of
the world"---other than CIS]. Aside from the United States and the
CIS, some 40 states collectively possess nearly 400 submarines;
about half of these submarines belong to our allies, friends and
true neutrals. ...Overall, the number of submarines possessed by
potentially hostile ROW states is expected to decline by about ten
percent by the end of the century. Other than Iran, which has KILO
class submarines on order from the CIS, few, if any, other
developing countries are expected to become new seagoing submarine
operators over the next decade." And of the Iranian naval threat,
he says, "Particularly worrisome are statements by the Iranian
Chief of Naval Operations to the effect that Iran has ordered
submarines from the former USSR to aid in its goal of controlling
the approaches to the Persian Gulf. ... Teheran's ambitions aside,
it probably will be a long time before the Iranian Navy has more
than a marginal capability to operate the submarines effectively."

"With licensing agreements from British and German manufacturers,
submarine-launched torpedoes are now being built in Indonesia,
Chile, and, shortly, Turkey. ... No Soviet submarine-launched
cruise missile system is in the hands of another country, and no
foreign country has bought the submarine-launched version of the
French EXOCET (SM-39). US supplied sub-launched HARPOON missiles
have been sold to Japan, Pakistan, and Israel and will soon be
aboard Egyptian, Turkish, and Greek submarines."

                       Baker on Foreign Aid Request 

24 February---Secretary of State Baker testifies before the Foreign
Operations Subcommittee, House Appropriations Committee.

Arms sales anxieties  Concern over arms sales is voiced often in
the Q&A. Chairman David Obey cites the pressures in Russia to sell
weapons for jobs and notes that the US faces much the same problem
in converting from a military to a civilian mode. "To put it in
perspective, however, last year we converted one-fifth of one
percent of our GNP from military to civilian production. The
Soviets were faced with an effort to do about 25 times that much.
...What can we do, thinking in a really big way," Obey asks, "to
create a worldwide strategy that moves all of us--not just the
Soviets and the United States, but everybody--into a different
path? ...If we cannot find a way to really convert the entire world
to civilian economic activities rapidly ... the major result in the
Third World of the end of the US-Soviet arms race is going to be a
rapid escalation of arms races all throughout the Third World with
disastrous consequences."

Baker says: "I think you need to separate the problem that exists
involving weapons of mass destruction and the problem that exists
with respect to conventional weapons. ...There are a lot of things
that are being done now with respect to weapons of mass
destruction. ...I think the ratcheting down, if you will, of
conventional weapons sales and transfers is something that's going
to take a longer period of time and that ... we should and can
afford to approach in a more measured way. ...Lastly, I would only
say that I don't think the goal should be to abolish all arms
sales. I think that there are reasonable and legitimate defensive
needs that countries will have whether they are in the Third World
or somewhere else."

Obey persists: "Since the end of the Gulf War we have seen new arms
sales to Morocco, Egypt, Turkey, Saudi Arabia, aid to Jordan has
been resumed, major additional sales of arms by the US in the
billions are planned for Saudi Arabia, Kuwait, Bahrain, and other
Middle Eastern countries, and in addition the US has encouraged the
richer Arab states to help fund the purchase of US-supplied arms to
Egypt, Morocco and Turkey." 

"I think that the public expects that with the end of the Cold War
we are going to be able to reallocate resources within the foreign
aid program and in some cases from foreign aid to other domestic
areas. ...The problem, however, is that through some of these
sales, financial commitments are being made which will lock the
Congress into a long period of providing aid at a specific level
and I don't think we can afford to let that happen to us." He is
particularly referring here to the administration's proposed $2.8
billion sale of 80 F-16 aircraft to Turkey (see ASM no. 6 p. 1).
"The US would be committed to a level of FMF funding [grant
military aid] in the range of $425 to $500 million for Turkey
through 1996, given the realities of the way those sales work.
...We cannot allow ourselves to be put in a box where we're going
to be required for the next five years, because of cash flow
realities, to be sustaining a level to a given country that we
might not want to sustain." 

Baker defends the sale---and military aid to Turkey more
generally---by saying that Turkey is strategically located at the
crossroads of Central Asia and is also important for its NATO air
bases and cooperation in the War against Iraq.

China and the MTCR:  In his opening statement, Baker says: "We
welcome China's written commitment of February 1, confirmed
publicly on Saturday, to abide by the MTCR guidelines and
parameters as agreed by Foreign minister Qian and myself in Beijing
last November. This important step, like China's agreement to
accede to the Non-Proliferation Treaty, constitutes real progress
...."

Rep. Larry Smith questions the administration's recent decision to
resume what he says are high technology transfers to China in
return for "some kind of oral commitment." "They have proven time
and again incapable of adhering to any coherent policy which we
have espoused. As you know they shipped missiles secretly to Saudi
Arabia [this is true] and others, and Syria before and during the
Gulf War [this is not true]." 

Baker responds: "We're not promoting technology transfer to China.
We're not shipping technology. What we're doing is lifting some
sanctions that we put on last June that have to do only with
proliferation concerns in exchange for China's written agreement to
comply with the Missile Technology Control Regime, a very, very
substantial and significant step forward if they will adhere to
their commitment. If they don't, we will follow US law and there
will be sanctions again." Baker mentions that the Chinese MTCR
commitment specifically extends to transfers of the M-9 and M-11
systems, missiles that are often alleged to have been sold to Syria
and Pakistan, but which the State Department maintains has not
happened.

What's up with Jordan?  Obey in closing notes that the subcommittee
has requested a GAO report on the provision of US military
assistance to Jordan during and after the Gulf war. "We know now,"
he says, "that deliveries were allowed to resume seven days after
the war; deliveries were made through the first two weeks of the
war; and no one can verify whether equipment was actually stopped
once the administration said that it had been, and the letter of
stop and delivery went out one month after the war was over, as I
understand it." He asserts that Jordan has consistently
circumvented the boycott of Iraq, which Baker disputes, offering
the subcommittee an intelligence briefing on this matter. Baker
plugs the importance and non-controversial nature of the security
assistance requested for Jordan---$30 million in economic support
fund; $25 million in FMF; and $2 million in International Military
Education and Training grants.

                     Baker on Foreign Aid Request: II

25 February---The Secretary of State appears before the Senate
Appropriations Committee, Foreign Operations subcommittee.

Israeli loan guarantees dominate proceedings:  Chairman Patrick
Leahy notes that last year's (FY92) appropriation bill is still
pending in this subcommittee. (The House passed its version in
June.) Leahy says, "the 1992 foreign aid bill's fate hangs in the
balance today," being inextricably linked to the Israeli housing
loan guarantee issue. He will not support the Israeli loan
guarantees "unless it is consistent with American policy of
opposing further settlement building in the occupied territories
prior to a negotiated resolution of the status of those
territories," Leahy asserts. The alternative to passage of an FY92
appropriation is a new continuing resolution for the remainder of
the fiscal year. A continuing resolution passed in October is now
providing foreign assistance policy guidance (see ASM no. 7-8 p. 5
for a refresher).

Almost half of the hearing on US world-wide foreign assistance is
devoted to the question of $10 billion in housing loan guarantees
to Israel, but as in the House on the previous day, there is a
great deal of anxiety expressed over conventional arms transfer
policies.

Russian arms sales:  Sen. Mark Hatfield asks what the
administration is doing to encourage and help Russia get out of the
arms sales business. Baker says, "We are working with the Russian
leadership and the leadership in these other new nations to assist
them in converting their defense plants into civilian uses. It is
a very difficult task, because so much of their GNP was devoted to
the military industrial complex. It's going to take some time. It's
not going to happen overnight with respect to conventional weapons.
We see this in our experience with the countries of Central and
Eastern Europe that have democratized and wanted to move to the
free market. Much of their former hard currency earnings came from
weapons sales. I'm talking about countries like Poland and
Czechoslovakia and to some extent Hungary and others. And it's
very, very difficult. But it is a problem that we are focused on
and working on. It's very hard, of course, for us to say to these
countries, `You cannot sell conventional weapons,' if we ourselves
want to retain the right to sell conventional weaponry. And to some
extent, we do want to retain that right...."

Military assistance to El Salvador?  Hatfield notes that the
administration's foreign aid submission requests $40 million in
military aid to El Salvador, making that country the sixth highest
recipient of such aid, while at the same time a UN peacekeeping
force has been deployed there. Why, he asks, is the administration
asking for lethal aid at this point? Baker responds that the aid
request represents a 50 percent reduction over military assistance
levels in past years. Maybe so, but Hatfield notes that this was
during the war, which is ended now. Baker says peace "is going to
result in the reduction of the military. A lot of people will be
unemployed. ...So I really think that if we now send a signal that
we're going to cut them loose here, that people that have been sort
of muscled, if you will, to accept this peace process, that ... to
cut [it] off cold turkey, rather than phasing it out, it would do
great damage to the peace process there." Anyway, most of the
military aid is "subsistence-type aid" ("uniforms and a lot of
things like that") rather than lethal aid, Baker says. 

China!  Sen. Don Nickles cites news reports claiming China has sold
missile components to Syria. Why, he asks, should Congress vote to
extend China's most-favored nation (MFN) trade status if this is
true? Baker says that the administration feels "isolating China
would be a mistake" and would result in greatly reduced leverage.
He says the administration "got them to agree to observe the
guidelines and parameters of the Missile Technology Control Regime.
...This is very, very important, because now they've committed to
observe it. ...And if they don't live up to it, we're in a position
to come in and to sanction immediately, or to take whatever other
action we think is appropriate." 

Nickles asks "If they don't comply, is one of the sanctions on
missile transfers the removal of MFN?" Baker, after a bit of
confusion says no, free emigration is the only condition placed on
MFN. The sanctions that could be invoked against China for
violating the MTCR proscriptions are those that have just been
lifted to encourage China to sign up! Baker notes that they could,
of course, "be put right back on."

Legislation passed and pending                            

Because preservation of American jobs is now being used as a
justification for increased overseas arms sales, this issue of the
ASM highlights---as a better course to follow---conversion
legislation introduced in the 102nd Congress.

Emergency Anti-recession Act of 1992S.2137

Introduced by Sen. Edward Kennedy on 21 January, and referred to
the Appropriations Committee, the bill contains several
conversion/economic adjustment measures under its "Subtitle B" on
defense. S.2137 would appropriate $200 million in the Pentagon
budget to the Commerce Department's Economic Development
Administration to provide planning and adjustment assistance to
communities that are, or are likely to become, adversely affected
by base closures and/or DOD contract cancellations or reductions;
it would appropriate $200 million for the DOD to transfer to the
Small Business Administration to provide technical information,
consultation, and financial assistance to small firms adversely
affected by base closures or reductions or cancellation of DOD
contracts; $200 million for DOD to transfer to National Institute
of Standards and Technology to provide project support for civilian
oriented research and development and generic technology projects
to aid scientists, engineers and technicians in converting to the
civilian sector; and $200 million from DOD to the Department of
Labor for demonstration projects to encourage and promote
innovative responses to worker dislocation and for training and
reorganization efforts designed to avert layoffs due to DOD
cuts/closures under the Job Training Partnership Act. 

The Defense Industrial Stabilization and 
Community Transition ActS.2133

Introduced by Sen. Chris Dodd on 27 November 91, and referred to
the Committee on Banking, Housing and Urban Affairs, this bill
would establish a Presidential Council on Economic Diversification
and Adjustment within the Executive Office of the President. The
Council would comprise working groups on technology; marketing;
small business and job training. As one of its functions, the
Council would be able to grant up to $50,000 to "alternative use
committees" established at defense facilities for the purpose of
exploring non-military production.

The bill would also amend the Defense Production Act to permit the
Executive branch to make or guarantee loans to arms manufacturing
companies to aid conversion to commercial production. 
An economic adjustment trust fund would also be established,
endowed by an amount equal to 10 percent of the estimated savings
from defense budget cuts.  

The Defense Industrial Diversification Act S.2075

Introduced by Sen. Joseph Lieberman in November, this bill would
permit firms which are at least 35 percent reliant on military
contracts to place a portion of their profits into a tax free
"defense industrial diversification account." This account may be
drawn on for a 10 year period for the purpose of investing in new,
non-defense plants and equipment. 

S.2075 would also create an Office of Small Business
Diversification within the Small Business Administration to
identify and coordinate efforts aimed at helping small firms cope
with defense cuts. The Office would oversee a loan guarantee or
loan program to assist qualified firms. 

The bill would also allow laid-off defense industry workers to
withdraw money from their IRA without tax penalty to pay the rent,
and require that they be given 90 days notification prior to being
fired.

The Defense Economic Adjustment Act     H.R. 441 

Introduced by Rep. Ted Weiss, this measure calls for the creation
of "alternative use committees" at large arms production
enterprises. To be made up of representatives of management and
labor, each committee would establish a "conversion blueprint" for
its facility. This Act would also require one year's advance notice
of plans to cut back or terminate a military contract or to close
a military base, and would provide adjustment assistance to both
communities and individual workers while conversion is underway.
In the past two months a number of innovative measures for curbing
militarization in the developing world have been introduced. These
bills are summarized here.

Developing Countries Demilitarization Act of 1992S.2157

Introduced by Sen. Alan Cranston and referred to the SFRC on 23
January, this legislation would make a developing country eligible
for US foreign assistance---including security assistance --only
"if its total expenditures on the military during the preceding
year do not exceed 3.6 percent of its gross national product for
that year. ...A country's request for United States security
assistance shall be included in its calculation of expenditures on
the military during the preceding year." Similarly, no United
States funds could be provided "as grants, loans, or collateral
directly or indirectly, through any multilateral agency or
organization" to such countries. "Developing countries" are defined
as those with per capita incomes of $4,300 or less. 

A waiver may be exercised if the President decides and certifies
that cutting off/denying aid would "cause grave harm to a
democratic country facing armed aggression or the threat of armed
aggression" from a hostile neighbor that a) is not a democracy or
b) is a human rights abuser, or from a local insurgency that
presents an immediate danger to the government's survival.

3.6 percent is the cutoff figure because, according to Cranston,
"that is the amount the administration says it plans to spend on
our military annually after 1995." This ceiling, he says, should
lower as US spending comes down. This bill would ban the provision
of security assistance to all of the United States' current top
recipients, except Israel, which spends about 14 percent of its GNP
on the military, but has a per capita GNP of around $10,000, well
above the threshold for a "developing country" as defined in the
bill. The Philippines and Portugal, two of the smaller military aid
recipients, spend below 3.6 percent of their GNP on the military
and so could continue receiving aid. The aid cutoff would become
effective 90 days after enactment.
            
Third World Development and 
 Threat Reduction Act of 1992 S.2162  

Introduced by Senators Mitchell, Harkin, Adams and Bingaman on 24
January, this bill would amend the International Financial
Institutions Act, adding a new Title XXI, which says: "The
Secretary of the Treasury shall instruct the United States
executive director to each international financial institution to
oppose the making of any loan or the extension of any credit or
guarantee by such institution to any developing country [defined as
one with per capita income of $4,000 or less] whose military
expenditures as a percentage of gross product are greater than its
expenditures on health and education" combined. 

The financial institutions encompassed are: IMF, World Bank,
African Development Fund, Inter-American Development Bank, Asian
Development Bank, and European Bank for Reconstruction and
Development.

Accompanying the bill in the Congressional Record are a list of
those countries which would currently be affected by this policy.
They are: Mozambique, Ethiopia, Tanzania, Chad, Somalia, Gambia,
Uganda, China, Yemen, Pakistan, Bolivia, Egypt, Sudan, Angola,
Nicaragua, El Salvador, Zambia, Guyana, India, Honduras, North
Korea, Cuba, Peru, Turkey, Iran, Iraq, and Syria.

International Peace and Security ResolutionH.Res.323 

Introduced by Rep. Timothy Penny on 28 January and referred to the
HFAC and Banking Committee, the resolution would note that it is
the "Sense of the House" that the US should take steps to
discourage high military expenditures, reduce levels of arms
transfers, stop the spread of weapons of mass destruction in order
to "promote peace and security and to ensure that more funds are
available for social programs and economic development." Included
among these measures are a 25 percent reduction in US military
assistance by 1995, with a redirecting of these monies to the UN
and other international peace keeping operations, economic
conversion assistance in the US and development assistance for
global hunger and poverty relief. The resolution would also
prohibit sales of "offensive" arms to countries spending over six
percent of their GNP on the military and "phase out" such sales
over four years to countries spending three to six percent of the
GNP on the military.
--On arms sales to Arab countries    S.Con.Res.93

Introduced by Senators Seymour and DeConcini on 21 February and
referred to the SFRC, this measure states that the "President
should withhold the submission to the Congress of any proposed sale
of offensive military weaponry under section 36(b)(1) of the Arms
Export Control Act (other than weaponry that may be required under
emergency conditions) to any Arab nation of the Middle East until
such nation establishes diplomatic relations with the State of
Israel." "Offensive" weaponry is not defined.

Seymour notes "every Arab nation with the exception of one [Egypt]
remains in a state of war with the Israeli people. ...During a time
when the United States has repeatedly expressed its concern about
the world-wide proliferation of offensive weapons, we cannot lose
sight of the fact that the Arab world's refusal to accept the
sovereignty of Israel stands as the major reason for the
acquisition of long-range ballistic missiles by countries such as
Libya, Syria, and Iraq. If the President announces that he will
refrain from initiating major arms sales to aggressive Arab powers,
they might realize the futility of rejecting America's only
democratic ally in the region."  

Recent Congressional publications                         

Arms Trade and Nonproliferation (Part I) (hearings of the Joint
Economic Committee on 23 April and 21 Sept 91) USGPO: 1992

Congressional Presentation for Security Assistance Programs for FY
1993, Department of State and DSAA  

The Drug War: Counternarcotics Programs in Colombia and Peru
T-NSIAD-92-9, 20 February 92

Export-Import Bank: Financing Commercial Military Sales CRS Issue
Brief 3 January 92 IB91074, 12 pp.

Nuclear Proliferation: Learning from the Iraq Experience (hearing
of the House Committee on Foreign Affairs 17 and 23 October 91)
USGPO: 1992, 58 pp.

Middle East Arms Transfer Policy (hearing of the SFRC on 6 June 91)
USGPO: 1991, 38 pp.

National Military Strategy of the United States Joint Chiefs of
Staff, January 1992, 27 pp.

"Nuclear Proliferation in an Uncertain World," Chairman of the
HASC, Les Aspin, 17 February 92 

Security Assistance: Shooting Incident in East Timor, Indonesia
GAO/NSIAD-92-132FS, 18 February 92

Soviet Military Conversion (hearing of the SASC on 19 September 91)
USGPO: 1991, 114 pp.

"Tomorrow's Defense From Today's Industrial Base: Finding the Right
Resource Strategy for a New Era," Chairman of the HASC, Les Aspin,
12 February 92, 20 pp.

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