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RESEARCH REPORT
ECONOMIC COMMISSION FOR LATIN AMERICA
AND THE CARIBBEAN (ECLAC)
MEASURES TO PREVENT A NEW ARMS RACE IN
LATIN AMERICA AND THE CARIBBEAN
HANDE BAŞAK OKTAY
MUNDP 2017 – Commitment to Development – Research Report
Committee: Economic Commission for Latin America and the Caribbean
Agenda Item: Measures to prevent a new arms race in Latin America and the Caribbean
Student Officer & Role: Hande Başak Oktay - Deputy President
Basic Overview of the Issue
Over the past two decades, countries in the Latin American and the Caribbean region have accelerated their process of acquiring weaponry and increased their military related expenses. In 2011, it
has been reported that a total of US $70 billion1 has been spent in Latin America only. This is a highly
unpleasant situation since most of these countries suffer from longstanding economic problems that
cause social unrest and further economic complications. Military expenditure continues to take up
larger portions of the GDPs of countries in the region, causing a serious sum of money to be spent on
war equipment in regions where unstable economies already plague the lives of its citizens.
Development occurs at a slower rate than that of military advancement, which lowers the quality of life for people in Latin America and the Caribbean. Even without a war in sight, these countries
are making armament priority over existing problems. Furthermore, it should be noted that the aspect
of having strong military forces situated nearby may drive other countries to reconsider their own expenditure priorities. If the current situation were to escalate into a new arms race, it would not only
undermine any economic and human development in the LAC region but also undermine world peace
and security. In order to prevent the possible negative consequences of an arms race there needs to an
awareness of the severity of the issue.
Explanation of Important Terms
Arms race
An arms race is "a competition between nations for superiority in the development and accumulation of weapons”.
Gross Domestic Product
Gross National Product, or GDP, is the ‘aggregate measure of production equal to the sum of
the gross values added of all resident institutional units engaged in production’’. It can be recalculated
by prioritising multiple concepts such as sustainability or population. It may be related to a country’s
level of economic development.
1
The Costa Rica Consensus
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MUNDP 2017 – Commitment to Development
Development
According to the United Nations Development Programme, human development is ‘‘expanding
the richness of human life, rather than simply the richness of the economy in which human beings
live’’.
International poverty line
The international poverty line is the level of income which is globally regarded as a minimum
needed in order to sustain basic needs. It has currently been set at US $1.90 a day, by World Bank 2.
Unemployment
Unemployment is defined as "when a person who is actively searching for employment is unable to find work”. There are different types of unemployment which are frictional, cyclical and structural unemployment. Frictional unemployment occurs "when a person is in-between jobs” and cyclical
unemployment is the conventional definition unemployment, which is unemployment related to the
business cycle, meaning recessions or growth declines. Structural unemployment arises due to "technological advances” replacing human labour.
Military expenditure
The Stockholm International Peace Research Institute defines military expenditure as capital
spent on armed forces, space militarisation, equipment, defence agencies and ministries, paramilitary
forces and training.
Detailed Background of the Issue
The Arising Arms Race
Until the year 2000, drastic increases in the
military expenditures of countries in the Latin
American and the Caribbean region had not been
observed. In 2009, Brazil and Venezuela displaced
Saudi Arabia and Taiwan as the ‘‘top two arms
purchasers beyond the G-8 countries and China’’,
shocking the international community. In 2015, it
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World Bank
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MUNDP 2017 – Commitment to Development
has been reported that Belize, El Salvador, Guatemala, Honduras, and Nicaragua have spent 19.6 million, 223 million, 274 million, 324 million, and 71.6 million dollars respectively on military
expenses. 3 The total sum for 2015 was $73.4 billion for all countries in the region. While these numbers may not seem excessive because the US alone has spent $60 billion, they are much higher than
expected of Latin American countries. Despite no threat of global warfare, the armament rate keeps
growing as more and more as countries join in expanding their military expenses, acquiring machinery
and arms. This sudden rise following the demilitarisation in the 1980s 4 may be explained by various
factors such as economic pressure, regime change, border security, domestic unrest, and global armament.
Economic pressure
During the 1980s, Latin American was swept into a Debt Crisis caused by ‘Latin American
[states] borrowing from US commercial banks and other creditors increased dramatically during the
1970s’. As a result, most economies in
the region were devastated throughout
the decade and the debt had reached a
total of US $327 billion5 by 1982. This
crisis lead to many budget cuts, especially in the defence budgets. After the
crisis, the region regained its economic
stability and most countries experienced rapid growth during the 2000s.
This growth rate lead to large investments in military equipment because countries felt the need to compensate for what they had sacrificed for the sake of economic stability during the crisis.
3
The Stockholm International Peace Research Institute (SIPRI)
4
WOLA, https://www.wola.org/analysis/why-latin-america-is-rearming/
5
FDIC, 1997
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MUNDP 2017 – Commitment to Development
Border security
Though border security is not a key reason for excessive
armament, it still affects countries’ decision to enhance their military capabilities. Trespassing between legal borders often causes
conflict, such as the case with Ecuador and Columbia in 2008,
where the Colombian army violated Ecuadorian borders by ‘about
a mile’ in order to pursue guerrilla forces.
Domestic unrest
For many years, Latin American and Caribbean states have been
plagued by high crime rates, drug trade, and guerrilla armies. In
fact, ‘over 30% of the world’s homicides’ happen in the region, even though it is only 9% of the
world’s population which resides there. Such a level of violence has lead countries to use military
forces on the streets in order to lower crime rates, such as Mexico when it ‘deploy[ed] armed forces
against vicious drug cartels’ in 2006. The lack of success of the decision has not stopped other nations
from following suit.
Possible Social and Economic Consequences
If the excessive military spending is not prevented, the issues in societies of countries in Latin America
and the Caribbean may worsen. For the last decade,
countries in the region have experienced countless
protests, low quality of life and violence. In 2002, one
out of every thirty-four children was not expected to exceed the age of five.6 Life expectancy for the region is
73 years, whereas, in the United States of America, it is
78.8 years. These issues stem from the low human development in the region. The UNDP Human Development Report of 1994 suggests that ‘if the world spent money on development instead of military expenditure, poverty could be eradicated in just a few years’. Similarly, if military expenditure is reduced, all matters of development-related problems will receive adequate attention.
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UNICEF
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GDP (current US$)
According to the UNDP, ‘200
million people [who live in the region]
earn between $4 and $10 per day’. As it
can be inferred from the chart below, the
number of people who live below the
poverty line is significantly high in
Latin American countries. They typically have high GINI coefficients, indicating that income is not equally dis-
tributed throughout the country. A smaller percentage of the population is the HOLDER of a larger
percentage of the income.
As mentioned in the prior subsection, crime rate is considerably high, which may be a result of
the severe unemployment present in many states across the continent. In 2015, unemployment rate is
the region increased to 6.7%7, which indicates that ‘1.7 million people have joined the ranks of the
unemployed’. The International Labour Organization reported in 2015 that, the scale of unemployment
should be expected to have a negative effect of the ‘situation of women and youth’, while leading
large groups of people to participate in ‘informal work opportunities’. Without any official recognition, these working opportunities may cause a series of human rights violations.
Major Parties Involved
Costa Rica
Costa Rica is among the very few Member States that does not have an army, alongside Dominica, Grenada, Haiti, Panama, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines8 in Latin America and the Caribbean. It ranks as the twelfth largest economy in the region.
The previous Prime Minister of Costa Rica, Oscar Arias, has been outspoken about how military expenditure has an enormous opportunity cost of inadequate human development.
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International Labour Organization
8
NON-MILITARISATION: COUNTRIES WITHOUT ARMIES, Christophe Barbey
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MUNDP 2017 – Commitment to Development
Brazil
Brazil is the country that has the largest defence budget out of all Latin American and Caribbean countries. It also has the highest GDP, and is one of the world’s largest economies. Brazil was a
major power in the South American naval arms race during the early 1900s, along with Chile and Argentina. According to recent data, Brazil seems as if it will be a key player in the new arising arms
race.
UNODA
United Nations Office for Disarmament Affairs is a United Nations body that priorities disarmament on a regional level. UNLIREC, The United Nations Regional Centre for Peace, Disarmament
and Development in Latin America and the Caribbean, serves as a branch of UNODA. UNLIREC may
provide a channel of communication between the United Nations and LAC countries in the process of
disarmament to prevent a new arms race.
Venezuela
Venezuela is high up on the list of military expenditures, with $5 billion in 2015. This is an unusual situation as it currently has one of the most unstable economies in the world. Although it has the
world’s largest proven oil reserves, it ranks very low in economic growth, after many LEDCs. The
growth rate was −10% in 20159, meaning the economy is contracting. This situation is especially hard
on citizens, not only because the local currency has depreciated drastically, but also because of the
‘erosion of human rights’ in the nation. In January 2016, the government has declared a ‘60-day economic emergency’ in light of the economic crisis the country is facing.
Dominican Republic
The Dominican Republic has spent the most on arms out of all Caribbean countries. It has the
ninth largest GDP in the region and has spent $443 million on military expenses in 2015. The Member
State was faced with protest by its citizens in 2012 after it had taken austerity measures to better its
economy. In addition, discrimination against women and minorities is prevalent in the society. Societal
issues do not seem to hasten the increase in military expenditure.
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World Bank
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MUNDP 2017 – Commitment to Development
Chronology of Important Events
Date
Description of Event
1874-1878
Argentine–Chilean arms race
1879 -1883
War of the Pacific between Chile,
Bolivia and Peru
1900s
Start of South American dreadnought race
1918
End of South American dreadnought race
1 September 1932 – 24 May 1933
Colombia–Peru War
1980-1989
The Latin American Debt Crisis
1982
The Falklands War
1986
UNLIREC is created
1994
The UNDP Human Development
Report
2 April 2012
The Costa Rica Consensus
September 2014
Venezuela's annual inflation rate
rises to 63.4%
24 December 2014
Arms Trade Treaty
2016 January
Venezuela declares 60-day economic emergency
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Relevant International Documents
- Confidence-building measures in the regional and subregional context, 2 December 2014, (A/RES/
69/46) http://www.un.org/ga/search/view_doc.asp?symbol=A/RES/69/46
The resolution A/RES/69/46 does not specifically target the LAC region, however it aims to build
peace and confidence in the regional and subregional context. It suggests alternative ways to resolve
disputes rather than rearmament and thus eliminates the need to accumulate vast amounts of military
equipment.
- Confidence-building measures in the regional and subregional context, Report of the Secretary-General, 3 July 2014, (A/69/116) http://www.un.org/ga/search/view_doc.asp?symbol=A/69/116
Report A/69/116 by the Secretary General of the United Nations focuses on the aforementioned resolution A/RES/69/46. Sections regarding the Dominican Republic, Cuba and Ecuador may be viewed
for further research.
- Towards an arms trade treaty: establishing common international standards for the import, export
and transfer of conventional arms, 18 December 2006, (A/RES/61/89) http://www.poa-iss.org/
CASAUpload/ELibrary/A-RES-61-89.pdf
The resolution A/RES/61/89 was a base for the Arms Trade Treaty, which was adopted eight years later in 2014. It provides a wide range of ideas in order to propose a framework for arms trade between
Member States. The Arms Trade Treaty can also be viewed for further research. These ideas may inspire means to limit excessive arms trade in the LAC region.
- Human Development Report, UNDP, 1994 http://hdr.undp.org/sites/default/files/reports/255/
hdr_1994_en_complete_nostats.pdf
The Human Development Report provides a definition for the concept of human development, which
is often disregarded is many LAC nations. Development is an excellent alternative area of investment.
- Labour Overview of Latin America and the Caribbean, ILO, 2015 http://www.ilo.org/wcmsp5/
groups/public/---americas/---ro-lima/documents/publication/wcms_450098.pdf
The Labour Overview of Latin America and the Caribbean by the International Labour Organization is
a summary of " the economic situation of the countries of the region with the most recent available
data”. A better understanding of the economic environment of Latin America and the Caribbean may
yield to more effective ways to prevent a possible arms race.
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Past Attempts to Resolve the Issue
For many decades, the former Prime Minister of Costa Rica Oscar Arias has been outspoken
about collective peace. The peace prize laureate has been interested in decreasing military expenditure
globally, especially in his homeland, South America. In 2012, the Costa Rica Consensus was introduced by Arias, which ‘aimed at creating mechanisms to condone debt and support, with financial resources, developing countries that spend more on health, education, and housing for their people, and
less on arms and soldiers’. It does not only consider the effects of excessive military expenditure on
societies but also on the economy and proposes a plan to effectively lead the country towards prosperity. Arias believed that the consensus should be adopted internationally in order to effectively combat
militarisation and low human development. Heretofore, these solutions have not been implement in
any Member State other than Costa Rica. The country stands as an excellent example as it is currently
able to operate without an army, and thus does not have military expenses. Despite the success of the
consensus, it has failed to attract the attention of other Latin American and Caribbean countries.
The Arms Trade Treaty, proposed in 2014, aims to ‘regulat[e] the international trade in conventional arms’. It has 130 signatories and has been ratified by 88 Member States. Similarly to the Costa
Rica Consensus, it suggests ‘linking human rights and ethics with military spending’, meaning decreasing military budgets in order to improve human development. The treaty is relatively recent, and
thus States must be given more time in order to implement changes, however, according to statistics,
the budget spent on military has not shifted for most of the countries in the LAC.
Solution Alternatives
Measures regarding the prevention of a new arms race in Latin America and the Caribbean
should be taken considering the state of economies and human development of LAC nations. Solely
economic or humanitarian adjustments will not be sufficient to tackle all issues that may cause or be
caused by an arms race.
In order to prevent expenditure on military, the debts and loans of the said countries may controlled to reassure efficient use of funds. These methods of control may be achieved through determination of certain criteria which will be offered to states who wish to take loans as conditions, such as
the obligation to use a fraction of said loans for the development of healthcare systems or education in
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the country. Such a solution would be adequate to have ‘the international financial community would
reward not only those countries that spend in an orderly fashion, as it does now, but those that spend
ethically’. MEDCs and financial organisations may be encouraged to grant loans to LAC countries
under these conditions in order to stimulate further increase in human development.
This issue may be tackled through the creation of another treaty regulating, or perhaps limiting,
the number of arms. The current framework of international arms trade is not sufficient to block rapid
armament, which encourages entry to a possible arms race. It must be noted that this might infringe
upon the sovereignty of states and violate their rights for defence.
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Useful Links
https://www.sipri.org/sites/default/files/Milex-constant-USD.pdf
http://data.worldbank.org/region/latin-america-and-caribbean
http://www.cepal.org/en/datos-y-estadisticas
https://www.hrw.org/publications
http://www.bbc.com/news/world/latin_america
https://www.sipri.org/databases/milex/definitions
http://www.investopedia.com/terms/u/unemployment.asp
https://www.onwar.com/aced/chrono/c1900s/yr30/fleticiawar1932.htm
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