No. 25 (30 April 1994)
In an attempt to sell the American public (and Congress) on foreign aid, the Administration reorganized this year's $20.861 billion international affairs budget around six new "mutually reinforcing goals."
Undersecretary of State Lynn Davis explained to a Senate subcommittee on 12 April: "we adopted the approach in the Peace, Prosperity and Democracy Act [the Administration's proposed re- write of the Foreign Assistance Act] of requesting funds, not according to functional types of assistance, but to serve [these six] critical policy objectives." Accordingly, development and military aid now falls under one of the following titles: Promoting U.S. Prosperity; Building Democracy; Promoting Sustainable Develop- ment; Promoting Peace; Providing Humanitarian Assistance; or Advancing Diplomacy.
This rhetorical shift has made it much harder to figure out what military-related aid the Administration is proposing to provide, to whom and why. In years past, this information was published in a lone Congressional Presentation Document for Security Assistance Programs. Now, in order to get a full picture of the funding re- quest, multiple volumes must be located from bureaucracies that themselves seem unaware of the reports' existence. (The necessary Congressional Presentation Documents are listed on p. 10).
Security assistance programs fall now under the "Promoting Peace" or "Building Democracy" titles of the budget. The FY 1995 security aid request is $5.85 billion.
Total FY 1995 Request for Security Assistance: $5,850,552,000
Comprising:
Military Financing: $3,195,456,000
Economic Assistance: $2,376,746,000
Direct Military Training: $26,350,000
International Narcotics Control: $232,000,000
Anti-terrorism Assistance : $15,244,000
International Criminal Justice: $4,756,000
Military Financing
The Administration is seeking just under $3.2 billion in military financing assistance. (Congress appropriated just over $3.2 billion last year.) All but $5 million of this funding is requested under the "Promoting Peace" title of the international affairs budget. It will underwrite weapons exports from the United States to five countries. Ninety-seven percent will go to sustain Israel and Egy- pt's customary high levels of aid. Jordan is the only other country slated to receive grant military assistance.
Military Financing: $3,195,456,000
comprising:
Grants:
Israel : $1,800,000,000
Egypt: $1,300,000,000
Jordan: $7,300,000
De-mining: $5,000,000
Loans:
Greece: $24,536,000
(to underwrite $317 million of loans)
Turkey: $35,062,000
(to underwrite $453 million of loans)
Administrative Costs: $23,558,000
The budget requests $59.5 million to underwrite loans for weapons purchases by Greece and Turkey. As has also become customary, this aid will be provided in a 7:10 ratio ($317 million of loans for Greece: $453 million for Turkey), in order to maintain some parity in their arms race. Portugal, which received subsidized loans last year, was "graduated" from the aid program this year.
Under the "Building Democracy" title of the budget, the Administration requests $5 million in grant aid for locating and removing anti-personnel landmines. These funds will train foreign government personnel in demining and provide equipment and logis- tics support for mine clearing activities in Afghanistan, Cambodia, Costa Rica, Eritrea, Honduras, Liberia, Mozambique, Nicaragua, Rwanda, and possibly El Salvador, Laos and Somalia.
Economic Assistance
The Administration is seeking $2.377 billion in grant bilateral economic assistance under the "Promoting Peace" and "Building De- mocracy" titles of the budget. Even though some of this money may not be targeted for military purposes, grant economic aid to Israel, Egypt and Turkey---the three largest recipients---has his- torically been considered "security assistance." Israel's $1.2 billion is explicitly to repay past military debt owed to the Unit- ed States. (Development-related aid falls under the "Sustainable Development" title of the budget.)
Economic Aid: $2,376,746,000
comprising in part:
Israel : $1,203,600,000
Egypt: $816,700,000
Turkey: $100,000,000
El Salvador: $30,000,000
Haiti: $15,000,000
Nicaragua: $12,000,000
Jordan: $8,750,000
Lebanon: $4,000,000
Morocco: $1,300,000
Anti-Drug, -Terror & -Crime Aid
Under the "Promoting Peace" title, the Administration requests $252 million to provide weapons, other material and training to curb illicit drug trafficking, terrorism and international crime. De- tails of these programs are spelled out in the CPD for Narcotics, Terrorism and Crime.
Of this total, $232 million is slated for counternarcotics assistance, primarily to countries in the Andean region of South America, but also to Guatemala, Pakistan, Thailand and Turkey, among others. (By comparison, in FY 1994, the Admini- stration requested $171.5 million for State Department-run nar- cotics control programs. Congress appropriated only $100 million.) In the DOD budget, the Administration requests an additional $874 million for counternarcotics programs. But the Pentagon programs do not involve the transfer of weapons to other countries.
International Narcotics Control: $232,000,000
comprising:
Asia/Africa/Europe: $7,150,000
Latin America: $165,894,000
International Organizations: $11,500,000
Inter-regional Aviation: $30,000,000
Inter-regional Programs: $11,156,000
Administrative Costs: $6,300,000
The Administration asks for $15.2 million to assist countries in countering terrorism this year. (In FY 1994, the Administration sought $15.6 million; Congress appropriated $15.2 million.) $4.75 million is being sought for the International Criminal Justice program.
Military Training
The Administration wants $26.35 million for the "Direct Training" of more than 2,221 members of 105 foreign militaries. (By compari- son, $21.2 million was appropriated last year for the then-named International Military and Education Training of 2,072 people.)
Direct Military Training: $26,350,000
for:
Regional Peace & Security: $11,975,000
Building Democracy: $13,145,000
Peacekeeping: $850,000
Administrative Costs: $380,000
Direct Training is funded under both the "Promoting Peace" and "Building Democracy" titles of the budget; the difference between the two types of military training is obscure. Both programs will focus on traditional military training (the operation and support of equipment, logistics and management training), as well as human rights and civil-military relations. Civilian members of foreign defense and related ministries will continue to be eligible for training under both programs.
Testifying before the House Subcommittee on Foreign Operations on 14 April, Alexander Watson (Asst. Secretary of State for Inter- American Affairs) gave the usual rationales for the military training programs: they promote American values, build relationships, provide access to future leaders.... But he candidly added: "they bring certain economic benefits for the United States as well; they give Latin and Caribbean officials experience using American hardware, and thus can influence their future procurement decisions."
The funding request for individual countries is listed on the next page, with the number of soldiers and others to be trained in parentheses. For a brief description of the goals and emphases of military training for individual countries, see the country profiles in the CPD for Promoting Peace and the CPD for Building Democracy.
Recipients of U.S. Military Training, FY 1995
Promoting Peace Program
(dollars in thousands)
Africa
Botswana: $350 (21)
Namibia : $150 (12)
Sao Tome/Principe: $75 (2)
Senegal: $500 (24)
Zimbabwe : $250 (19)
East Asia & Pacific
Korea: $10 (2)
Malaysia: $500 (40)
Philippines: $1195 (124)
Singapore: $20 (4)
Solomon Islands: $100 (20)
Thailand: $1000 (77)
Tonga: $50 (6)
Vanuatu: $50 (3)
Western Samoa: $50 (2)
Western Europe
Austria: $15 (2)
Finland: $15 (2)
Greece: $50 (15)
Malta: $65 (8)
Portugal: $500 (22)
Spain: $50 (9)
Turkey: $1000 (69)
Latin America
Argentina: $10 (16)
Brazil: $100 (13)
Chile: $100 (56)
Costa Rica: $50 (11)
Dominican Rep.: $200 (35)
Ecuador: $300 (34)
Jamaica: $170 (27)
Mexico: $200 (31)
Uruguay: $100 (9)
Venezuela: $250 (36)
Eastern Caribbean: $200 (?)
Panama Canal Area Military Schools: $425 (?)
Near East
Algeria: $75 (6)
Bahrain: $75 (16)
Egypt: $1000 (87)
Jordan: $1000 (100)
Lebanon: $100 (5)
Morocco: $400 (27)
Oman: $110 (62)
Tunisia: $800 (60)
South Asia
Bangladesh: $175 (12)
India: $200 (12)
Building Democracy Program
Africa
Benin $100 (7)
Botswana $100 (7)
Burundi $100 (5)
Cape Verdi $75 (3)
Central Afr. Rep. $100 (5)
Chad $175 (10)
Congo $150 (9)
Cote D'Ivoire $150 (8)
Djibouti $150 (7)
Eritrea $200 (7)
Ethiopia $250 (11)
The Gambia $100 (8)
Ghana $200 (14)
Guinea $150 (7)
Guinea-Bissau $75 (3)
Kenya $200 (14)
Lesotho $50 (5)
Malawi $125 (9)
Mali $130 (6)
Mozambique $125 (3)
Niger $200 (9)
Rwanda $150 (9)
Senegal $100 (2)
South Africa $250 (10)
Swaziland $50 (4)
Tanzania $100 (8)
Uganda $150 (14)
Zambia $100 (?)
East Asia & Pacific
Cambodia $200 (5)
Mongolia $100 (3)
Papua New Guinea $125 (8)
Eastern Europe & FSU
Albania $200 (13)
Belarus $100 (5)
Bulgaria $500 (23)
Czech Republic $500 (24)
Estonia $200 (20)
Georgia $75 (4)
Hungary $700 (30)
Kazakhstan $100 (5)
Kyrgyzstan $50 (3)
Latvia $200 (16)
Lithuania $200 (9)
Macedonia $125 (7)
Moldova $50 (3)
Poland $700 (38)
Romania $500 (40)
Russia $700 (40)
Slovakia $350 (19)
Slovenia $125 (3)
Turkmenistan $50 (3)
Ukraine $600 (25)
Uzbekistan $50 (2)
Latin America & Caribbean
Belize $40 (5)
Bolivia $350 (42)
Colombia $600 (280)
El Salvador $400 (60)
Guatemala $200 (20)
Guyana $75 (9)
Honduras $325 (51)
Nicaragua $100 (4)
Paraguay $125 (19)
Peru $325 (13)
Suriname $50 (2)
Near East
Maldives $50 (3)
South Asia
Nepal $100 (7)
Sri Lanka $100 (4)
Funding for Peacekeeping and Non-Proliferation
In addition to the aforementioned nearly $6 billion in bilateral security assistance, the Administration is seeking $908 million for multilateral peacekeeping operations (PKOs) in FY 1995, comprising:
--- $533 million in the international affairs budget for dues owed
the UN for peacekeeping activities;
--- $75 million in the international affairs budget for voluntary
contributions to ongoing operations; and
--- $300 million in the DOD budget for expenses incurred by the
armed forces during participation in PKOs.
The Administration is also requesting $50 mllion for non-prolifer- ation and disarmament activities. This includes $10 million for a Nonproliferation and Disarmament Fund to support "export controls and interdiction, weapons destruction, and safeguards and verifica- tion"; and $40 million for the International Atomic Engergy Agency, which verifies compliance with nuclear non-proliferation commitments.
Editorial:
The Arms Export-Peacekeeping Tautology
The UN currently has 70,000 peacekeeping troops deployed in 17 missions around the world, at a cost of $3.2 billion this year. In support of U.S. contributions to peacekeeping operations (PKOs), Secretary of State Warren Christopher told Congress, "[m]illions spent now on multilateral preventative diplomacy, emergency refugee support, and peacekeeping may save hundreds of millions in defense and international relief later."
He's right, but why not take that logic one step further? Restraining arms exports would likely lessen the need for preventative diplomacy, refugee support and peacekeeping missions in the first place. Arms exports (e.g., to Angola, Somalia and Iraq) in the 1970s and 80s greatly increased the level of violence and chaos which led to current UN peacekeeping operations.
In FY 1993, the U.S. government approved nearly $60 billion of weapons exports to 145 countries. Some of these weapons may necessitate future PKOs. The U.S. Joint Chiefs of Staff stated in their 1992 Joint Military Net Assessment that instability arises "in areas where nations are acquiring increasingly sophisticated and expensive military equipment and large armed forces. This tendency undermines regional stability and the balance of power and defers economic growth." Very few developing countries produce any let alone all of their own armaments; they import weapons from the same countries that are ostensibly working to develop international peacemaking and peace-enforcing mechanisms.
The United States and other peacekeeping participants should restrain arms exports to national governments, instead supplying weapons primarily to international or regional security organizations. The UN, NATO, Organization of African Unity, and Organization of American States are currently on the United States' list of approved arms customers.
Global restraint in arms production and exports would make a true contribution to global and regional peacemaking/peacekeeping. Pursuing peace with one hand, while doling out weapons with the other is cynical and counterproductive.
The Cost of Keeping the Peace v. the Profits of War
[table omitted]
Clinton Admin. Watch
U.S. Approved $60 Billion in Arms Exports in FY 1993
Data recently made public by the State and Defense Departments show that the U.S. government signed off on, or actively brokered, $59.915 billion of arms exports during fiscal year 1993 (1 Oct. 1992þ30 Sept. 1993). Comparable official data from the other major arms exporting states is not available, but press accounts indicate that during calendar year 1993 Russia, France and Britain each sold from $4-8 billion of arms.
The majority of the U.S. sales were negotiated by the government, through its Foreign Military Sales (FMS) program. The Pentagon signed FMS contracts for $33.2 billion of weapons, related ser- vices, and related construction with over 90 countries. More than 80 percent of these sales ($27 billion) were to developing coun- tries.
FMS Agreements Over the Years
FY 1990 -- $14,180,197,000
FY 1991 -- $22,891,600,000
FY 1992 -- $14,983,700,000
FY 1993 -- $33,215,993,000
During the same time, the State Department approved export licenses for an additional $26.5 billion of arms to 145 countries. These sales are negotiated directly by arms manufacturers, and license approvals do not represent finalized sales. The State Department estimates that 40-60 percent of all licenses will result in actual sales. Developing countries accounted for just over 60 percent of the direct commercial sales (DCS) licenses granted.
Over $570 million of the FMS agreements, and $2.2 billion of the DCS licenses, were "classified"þsales of unknown weapons to unknown recipients. Apparently the weapons exported are so technologically advanced that knowledge of their existence would endanger national security. Alternatively, perhaps the recipient country is so unsavory that the U.S. government fears disclosure.
Also in FY 1993, the Pentagon gave over $100 million of "excess defense articles" (EDA)þolder items now surplus to the Pentagon's needsþto 20 countries. The United States also leased $410 million of military equipment to 18 countries and to international orga- nizations. Rental charges totalled $37.5 million.
Highlighted Recipients of U.S. Arms
[table omitted]
U.S. to Initiate Production of Diesel Subs Solely for Export
On 7 April, the State Department approved a license to Ingalls
Shipbuilding of Pascagoula, Mississippi for the production for
export of Type 209 diesel submarines
Currently only nuclear-powered submarines are produced in the
United States (at Newport News, VA and Electric Boat in Groton,
CT). Ingalls will produce the diesel subs under a manufacturing
license from the German firm HDW. The potential deal with Egypt is
worth $700 million; Egypt would pay with U.S.-supplied grant mili-
tary aid, which is restricted to purchases from America.
In a 1992 report, the Navy stated that "construction of diesel sub-
marines for export in U.S. shipyards would not support the U.S.
submarine shipbuilding base and could encourage future development
and operation of diesel submarines to the detriment of our own
forces."
The creation of this new production line will likely result in
pressures to make further submarine sales to developing countries.
Taiwan, and possibly Saudi Arabia, are also in the market for
diesel subs.
Selling Old Weapons to Buy New
In 1991, China's policy of funding procurement of new weapons
through arms exports generated outrage and near hysteria in the
western press. Similarly, U.S. government officials heavily
criticized a Russian plan to finance arms industry conversion
through arms sales. In both cases, officials feared the creation of
a dangerous and short-sighted bureaucratic interest in selling
weapons.
In January, the U.S. Air Force disclosed plans to fund the procure-
ment of up to 90 new F-16C/D aircraft through sales of some 360
older model F-16A/B planes (see ASM No. 24 p. 5). USAF Vice Chief
of Staff Michael Carns, the architect of the plan, said the scheme
would give him "brand new warfighting planes at no cost to the
taxpayer"
To overcome arms control opposition, the USAF put a Madison Avenue
spin on the sales plan, re-packaging it as "Coalition Force
Enhancement"þa way to strengthen friendly militaries. Already, over
a dozen countries have been briefed on the availability of the
cheap F-16s ($14 million per plane). Spain would like 50. Other
potential customers are Egypt, South Korea, Malaysia, Morocco, New
Zealand, Philippines, Singapore, Thailand, Tunisia and possibly
some East European countries.
Since the U.S. Constitution mandates that all federal spending
originate in Congress, the Air Force is currently seeking Con-
gressional support for the plan in the FY 1995 DOD authorization
bill.
There is precedent for this sort of off-budget procurement
(although not to the magnitude envisioned hereþthe Air Force plan
would involve $5 billion worth of aircraft sales.) In the FY 1993
authorization bill, Congress permitted the Army to use $197 million
from the sale of excess M-48 and M-60 tanks for the Abrams tank
upgrade program. The act also allowed the use of $15.2 million from
M-113 sales for the procurement of Bradley Fighting Vehicles. And
in the FY 1994 DOD bill the House Armed Services Committee suggest-
ed that the Navy sell excess Mk-46 torpedoes and use the proceeds
to offset buying the Mk-50 Advanced Light Weight Torpedo.
Lockheedþmanufacturer of the F-16þis lobbying hard for the hundreds
of millions of dollars in upgrade work and new USAF orders.
Pentagon Participation in Arms Shows Here to Stay
In April, Defense Secretary William Perry authorized the military
services to participate at the 1994 "Eurosatory" exhibition of army
equipment, to be held in Paris during 20-25 June. At no cost to
industry, the Pentagon will provide and transport many of its
weapons to the marketing show, including the M-1A1 Abrams tank, M-2
Bradley Fighting Vehicle, M-109 self-propelled howitzer, Patriot
missile launcher and attack and utility helicopters.
According to U.S. law, Perry had to certify that participation is
in U.S. "national security interests" before taxpayer funds could
be used. (Preliminary Pentagon estimates of costs for the show are
$385,000.) This show marks the second time that national security
has been invoked to justify Pentagon arms marketing (see ASM No. 25
p. 1).
One of the vital interests Perry cited was the contribution to
"interoperability and equipment commonality" which U.S. arms sales
would hasten. He said DOD participation will "contribute to the
Partnership for Peace initiative," implying that sales to East
Europe and former Soviet states lies at the heart of the decision.
In addition, Perry said a strong U.S. presence was necessary to
demonstrate that European security remains important to the United
States. Perry asserted, rather mysteriously, that "a weak showing
by U.S. industry, especially in contrast with the effort orches-
trated by the French government, will send a ... powerful negative
signal."
Undersecretary of Defense for Policy Frank Wisner told an arms in-
dustry gathering that the Pentagon will also participate at the
upcoming Paris Air Show and the Abu Dhabi arms bazaar
U.S. Liberalizes Spy Satellite Sales
On 10 March, the Administration revised its policy on sales of
high-resolution imagery and reconnaisance satellites. The Depart-
ment of Commerce will now decide licenses with "the presumption
that remote sensing space systems whose performance capabilities
and imagery quality characteristics are available or are planned
for availability on the world marketplace will be favorably consid-
ered" (emphasis added)
The Pentagon and CIA opposed the policy change, fearing high
resolution satellites will be used to gain military advantage
against the United States or against U.S. allies. Next up: look for
some members of Congress to push for the development of an Anti-
Satellite Weapon to combat these exported capabilities (see ASM No.
22 p. 7).
Industry Update
On 17 March, the State Department held the fifth public meeting of
its Defense Trade Advisory Group (DTAG) (see ASM No. 23 p. 4). High
ranking Department officials addressed the group of, primarily,
arms manufacturers.
Assistant Secretary for Politico-Military Affairs Robert Gallucci
said that industry should "not look for dramatic change" in the
Administration's forthcoming policy on conventional arms sales. The
new policy, he said, will likely support: 1) increased transparency
in the arms sales process; 2) defense conversion; and 3) arms
exports when appropriate. The difficulty lies in reconciling the
contradictory objectives of supporting American industry and
preventing dangerous or destabilizing transfers, Gallucci said. But
the consensus among industry and government officials was that
"rogue states," rather than arms exports, are the problem (i.e.,
"guns don't kill people...").
William Schneider, Chairman of DTAG's policy working group,
presented several export policy recommendations.
Opening Up New Markets
The global market for weapons has contracted significantly since
the late 1980s and is expected to shrink by an additional 25
percent before the end of the decade, as the traditional markets
(e.g., Middle East) are saturated. Schneider identified Taiwan,
Latin America, and South Africa as growth markets for U.S.
industry.
Schneider emphasized the opportunities for increased business in
Taiwan (which has the world's largest cash reserves) and urged a
liberalization of U.S. sales policy. Exports are currently limited,
theoretically, by a 1982 accord with China, in which the United
States pledged that "arms sales to Taiwan will not exceed, either
in qualitative or in quantitative terms, the level of those
supplied in recent years." U.S. sales have not been constrained by
this proviso (see ASM No. 18 p. 2), but the Administration is
nevertheless reviewing Taiwan policy.
Improving economic and political circumstances have opened up the
Latin American market. U.S. sales have increased with the consoli-
dation of democracy in Chile and the easing of export restrictions
on Argentina, which resulted from its 1982 war with Britain. But
industry would like greater government help in marketing arms to
these nations. (Lack of DOD participation at a recent air show in
Chile was widely criticized in the military trade press.) Industry
is also seeking approval for exports of more modern equipment.
Lockheed Corporation, for example, has been lobbying for permission
to market its hot-selling F-16 fighter to Chile. (Venezuela is the
only South American state currently possessing F-16s.)
With the democratic election in South Africa, the UN-
levied arms embargo will soon be lifted. This opens yet another
heretofore forbidden market to U.S. manufacturers. "As the legal
environment changes, opportunities will be created to displace
South Africa's dependence on non-U.S. suppliers and inefficient
indigenous production," Schneider wrote in a memo for the meeting.
(The State Department is already permitting industry to market some
weapons in South Africa. See Fed. Reg. 24 March 1994.)
Upgrading Soviet-made Arms
Upgradingþor "Westernizing"þSoviet-manufactured equipment in Indian
and Eastern European arsenals provides "important market opportuni-
ties" for U.S. firms, Schneider said. He lamented that some busi-
ness has already been lost because current U.S. policy does not
permit such deals.
U.S. law does not explicitly prohibit these upgrades; presumably
the policy is due to sensitivity about horning in on Russia's last
remaining major market. Russian arms industry has undergone a
radical downsizing, resulting from greatly decreased Russian
weapons procurement and dramatically diminished arms exports. U.S.
domination of the Soviet upgrade market could cause grave political
problems for President Yeltsin with his military industrial estab-
lishment.
Aerospace CEOs Lobby for MiG Upgrades
Seven leading arms industrialists wrote to the Secretaries of
State, Commerce and Defense in early March, seeking permission for
U.S. firms to upgrade Soviet-made weapons in the Indian arsenal.
The CEOs from Grumman, Honeywell, Litton, Martin Marietta and
Lockheed and the Presidents of the Aerospace Industries Association
and the Electronics Industry Association claimed that upgrading
India's fleet of MiG-21 fighters would generate $350 million of
business. But the stakes are really much higher, as some 40 air
forces fly more than 2,500 MiG-21s. "The winners of this competi-
tion will obtain a distinct advantage in future upgrade programs in
Eastern Europe and elsewhere," they wrote.
The industrialists cited increased influence with the Indian mili-
tary; creation or maintenance of American jobs; the fact that
similar levels of technology have previously been transferred to
India; and the inevitability of the planned Indian upgrade ("the
Indian government will award the MiG-21 upgrade program with or
without U.S. industry participation") as reasons why the U.S.
government should change its policy.
The Lowest Common Denominator
Schneider also urged that the Pentagon establish a "Foreign Avail-
ability Database," listing all weapons available for export from
other countries. The intent is to bolster the "if we don't sell
them, somebody else will" adage, with the logical conclusion being
that the United States government should only restrict items which
are manufactured solely by U.S. firms. "A foreign availability
database can provide useful information on the offerings of non-
U.S. producers in foreign markets to assist in making appropriate
licensing decisions," Schneider wrote in a policy paper for the
meeting.
Increase Codevelopment, Coproduction
DTAG's policy working group supported increased weapons technology
transfer, through joint development and production, as a means of
gaining and maintaining access to the Western European and Japanese
markets.
In sync with industry, the civilian leadership at the Pentagon has
been pushing for increased "international arms cooperation."
Defense Secretary William Perry, Deputy Secretary John Deutch, and
Kenneth Flamm (very long job title) favor coproduction to spread
the technical and financial risks of new projects among the many
partners. Perry wrote in a June 1993 memo that international
cooperation will make "the most efficient use of the resources we
apply to our collective defense."
However, legal prohibition on the retransfer to third parties of
U.S. military technology is cited as an obstacle to cooperative
projects. (Section 3(a)(2) of the Arms Export Control Act mandates
that as a condition of any arms sale or cooperative project, the
recipient must first agree not to transfer title to, or possession
of, U.S.-supplied weapons without prior approval from the U.S. gov-
ernment.) So, the Pentagon is seeking to relax the retransfer
restrictions. In a 22 February speech, Deutch said the government
would instead establish a threshold, below which military technol-
ogy could be re-transferred among NATO allies and Japan without
case-by-case reviews.
Tanks Are Like Toasters
Schneider urged the government to stop discriminating against
weapons exports. Arms exporters face "statutory and regulatory
encumbrance" which exporters of other products (e.g., toasters and
VCRs) do not face. Arms producers "are not eligible for export
credit/insurance," he said. (Except for $3 billion of military
financing provided annuallyþsee p. 1.) "Tax treatment of defense
export earnings differ from ordinary export earnings; government
policies on export promotion diverge between defense products and
other industrial exports," he complained.
Punishing Crime is Bad for Business
Even more cheekily, Schneider proposed that firms debarred from
doing business with the Pentagon (because of fraud or other illegal
activities) should nevertheless be permitted to continue overseas
sales. He wrote: "The practice of denying export authority to firms
suspended or debarred from doing certain types of business with the
Department of Defense has had the unintended consequence of
disrupting the readiness of the armed forces of allied nations and
undermining the international perception of the U.S. as a reliable
supplier."
"Safe" Arms Sales Supported
In his policy memo, Schneider also suggested that the government
convene a joint Defense Science Board-DTAG panel to examine ways in
which advanced technologies could be applied to mitigate the risk
of the unauthorized use or transfer of weapons exported by the
United States. Proposals floated in recent years have included
electrical locks, black boxes, and computer viruses to shut down
exported weapons.
Earth's Market Potential
During February and March, President Clinton certified that
furnishing weapons and other defense articles to Albania, Bulgaria,
Cambodia, Eritrea, Estonia, Latvia, Lithuania and Romania "will
strengthen the security of the United States and promote world
peace."
Over the years, Presidents have made this statement about 156 of
the world's 195 states, plus NATO, the UN, the Organization of
African Unity and the Organization of American States. The finding
is required by law (section 3(a)(1) of the Arms Export Control Act)
before the government or industry can export weapons to a
particular country or organization.
The finding for Eritrea was motivated by an apparently benevolent
desire to provide equipment and military training to assist in the
removal of some 500,000 antipersonnel mines sewn during its long
war for independence
The decision for the Eastern European countries is apparently aimed
at facilitating their inclusion into NATO's "Partnership for
Peace." Arms exportsþto promote "rationalization, standardization
and interoperability" of forcesþwill be one result of the expansion
of NATO.
In the case of Cambodia, the State Department said the finding is
merited by "the installation of a new and democratically-elected
government, and the end of multifactional civil conflict that
plagued the country for over a decade"
South Africa, Syria, Russia, Ukraine, Belarus, Uzbekistan,
Kazakhstan, Kyrgyzstan, Armenia, Azerbaijan, and Georgia are not on
the list of approved buyers...yet.
Deals in the Works
The Administration notified Congress of the following Foreign
Military Sales (FMS), leases, grant excess defense article (EDA)
transfers and export licenses for direct commercial sales (DCS)
from industry during March-April. Abbreviated source information is
given in the table; for more information, contact our office.
More Planes for Israel Through Extra Aid Channel
In April, the Administration formally notified Congress that it
will `sell' Israel 20-25 F-15E bombers (see ASM No. 25 p. 9). The
planes will be paid for with $2.4 billion of grant military
assistance from the United States.
In addition, the U.S. will give Israel 50 F-16A/B fighters through
a special drawdown account established by Congress in 1991. The
account originally contained $700 million, with which Israel could
purchase weapons the Pentagon was retiring from Europe.
Israel bought 24 Apache and 10 Blackhawk helicopters, 10 F-15A/B
fighters and other weapons, depleting most of this fund. On 30
March, however, President Clinton added $161.9 million to the
account, to cover the $250 million cost of the F-16s
Recent Government Publications
Congressional reports and hearings can be obtained for free through
the Congressional Committee or Subcommittee which issued them, or
for a small charge, through the Government Printing Office [(202)
783-3238]. CBO reports are also available through the Government
Printing Office. To order (free) GAO reports, phone (202) 512-6000.
CRS reports are free; request them through your Congressional
Representative's office.
Congressional Presentation for Building Democracy, FY 1995, U.S.
Department of State, U.S. Agency for International Development,
Defense Security Assistance Agency, 1994.
Congressional Presentation for Narcotics, Terrorism, and Crime, FY
1995, U.S. Department of State, Bureau of International Narcotics
Matters, 1994, 84 pp.
Congressional Presentation for Promoting Peace, FY 1995, U.S.
Department of State, Defense Security Assistance Agency, 1994, 245
pp.
Congressional Presentation Summary Tables, FY 1995, U.S. Agency for
International Development, 1994, 66 pp.
Defense Trade News, Volume 5, Number 1, U.S. Department of State,
Bureau of Politico-Military Affairs, January 1994, 33 pp.
Department of Defense: Weaknesses in Humanitarian and Civic
Assistance Programs, General Accounting Office [GAO/T-NSIAD-94-
158], 19 April 1994.
Enhancing U.S. Security Through Foreign Aid, Congressional Budget
Office, April 1994, 90 pp.
"Export Administration Act of 1994: Side-by-Side," Congressional
Research Service Report for Congress [94-266E], Glennon J. Harri-
son, 23 March 1994, 39 pp.
Foreign Operations, Export Financing, and Related Program
Appropriations, Fiscal Year 1994, Part I, II (hearings before the
Senate Appropriations Committee), U.S. GPO: 1994.
Illegal Military Assistance to Israel (hearing of the Oversight and
Investigations Subcommittee of the Energy and Commerce Committee,
27 October 1993) U.S.GPO: 1994.
International Peacekeeping and Peace Enforcement (hearing before
the Senate Armed Services Committee, 14 July 1993), U.S. GPO: 1994,
74 pp.
"Iran: Conventional Arms Acquisitions," Congressional Research
Service Report for Congress [94-138F], Richard F. Grimmett, 22
February 1994, 7 pp.
Oversight of State Department Country Reports on Human Rights
Practices for 1992 and U.S. Human Rights Policy (hearing before the
International Security Subcommittee of the House Foreign Affairs
Committee, 4 March 1993), U.S. GPO: 1994, 79 pp.
Peacekeeping and Conflict Resolution in Africa (hearing before the
Africa subcommittee of the House Foreign Affairs Committee, 31
March 1993), U.S. GPO: 1994, 101 pp.
Reducing the Deficit: Spending and Revenue Options, a report to the
Senate and House Budget Committees by the Congressional Budget
Office, March 1994), U.S. GPO: 1994, 377 pp. (Highlights savings
possible through cuts in military aid and elimination of subsidies
to arms exporters.)
Survey of Peacekeeping Operations in the Middle East and Europe
(report of a House Foreign Affairs Committee staff study, March
1994), U.S. GPO: 1994, 27 pp.
Testimony of Former Employees of the Banca Nazionale Del Lavoro
(hearing before the House Banking, Finance and Urban Affairs
Committee, 9 Nov. 1993), U.S. GPO: 1994.
U.S. Arms Control and Disarmament Agency Authorization and
Consideration of the Agency's Future Status and Responsibilities
(hearing before the Senate Foreign Relations Committee, 14 July
1993), U.S. GPO: 1994, 49 pp.
U.S. Nonproliferation Policy (hearing before the House Foreign
Affairs Comm., 10 Nov. 1993), U.S. GPO: 1994.
U.S. Security Policy Toward Rogue Regimes (hearings before the
International Security Subcomm. of the House Foreign Affairs Comm.,
28 July, 14 Sept. 1993), U.S. GPO: 1994.
World Military Expenditures and Arms Transfers, 1991-1992, U.S.
Arms Control and Disarmament Agency, 1994, 156 pp.
DTAG Meets, Outlines Industry's Wish List
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