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Arms Race, Round 2

March 23, 1993|CHARLES P. WALLACE | TIMES STAFF WRITER

JAKARTA, Indonesia — A "New World Order" is being built. "Peace dividends" are being declared.

In fact, confirms Ian Anthony, an arms expert at the Stockholm International Peace Research Institute, "the single most crucial development in the global arms trade was the end of the Cold War. You no longer have the two superpowers willing to subsidize arms purchases for strategic or ideological reasons. . . . There's no question the market has shrunk."

Still, global spending on weapons of destruction is awesome. The developing world continues to shell out, on average,nearly $70 million daily for arms, ammunition and military hardware, according to the latest figures available. And with the collapse of the Soviet Union, the United States is the world's biggest arms seller.

Moreover, while global arms spending is on the wane, two regions are running counter to the trend. One seems perpetually among the world's most unstable areas. But the other is arming even as it enjoys a period of relative peace and prosperity.

Here are two reports on the world's booming regional arms bazaars, the different forces that are fueling them and their prospects for the future.

As the Pentagon shuts down its big bases, Asian nations rush to fill the void. The result: more military spending.

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It wasn't supposed to happen this way. The end of the Cold War was supposed to produce a "peace dividend," allowing countries throughout Asia, as well as the United States, to achieve major savings on defense spending.

Washington has cut back, by pulling out of its two biggest bases in the region at Subic Bay Naval Base and Clark Air Base in the Philippines. But some Asian countries appear to have taken the U.S. pullback as a signal to steeply increase their military spending.

Indonesia has purchased 39 ships of the old East German navy and two new submarines. Malaysia is buying front-line fighter planes and naval frigates. Thailand is buying a helicopter carrier. Taiwan has placed a huge order for U.S. and French warplanes, and China is boosting its military spending by 15%.

"Whether you want to call it an arms race is an emotive term, but there is certainly a continued buildup taking place in Asia," said Paul Beaver, publisher of the respected Jane's Defense Weekly. "There is definitely no peace dividend and everyone in the region is increasing their defense spending."

According to Jane's, military spending in Southeast Asia, Taiwan and South Korea increased by 12.5% in 1991 and is believed to have followed the same pattern last year as well. In most other regions, defense spending has declined 20% or more.

According to Jane's, Asian countries are in the market for 572 military helicopters, more than the rest of the world combined.

Viewed on a global basis, arms spending in Asia as recently as 1981 accounted for only 15% of the world's total, excluding the United States and the Soviet Union, according to figures compiled by the Economist magazine. By 1991, the figure had reached 25% of the global total.

Perhaps the most surprising aspect of the buildup is the realization that unlike the Middle East,where Iraq and the Arab-Israeli conflict continue to fuel instability, Asia is now enjoying its most peaceful days since the end of the Vietnam War in 1975.

"I think there is a lot of uncertainty created by the changed political conditions," said Ian Anthony of the Stockholm International Peace Research Institute. "A lot of countries in the Asia region are not looking at the immediate future, but they're looking 10 to 15 years down the road and saying: 'What's the regional environment going to be like if you assume a significant reduction in the U.S. regional presence?' "

While the region is relatively peaceful, potential flash points abound. War between North and South Korea tops most lists of potential crises, but there are also territorial disputes over the Spratly and Paracel islands, which are believed to sit atop huge reserves of oil, the simmering Cambodian conflict, and a host of recurring border disputes involving Myanmar, India, Thailand and Malaysia.

Local military analysts also point to some unusual economic conditions that help account for the military sales at this time. The Asian Pacific region is in the midst of a general economic boom that has lasted a decade, and many countries have accumulated large cash reserves. Taiwan, for example, has more than $50 billion in reserves to help pay for its recent acquisition of 150 F-16 fighter aircraft from the United States--a deal worth $6 billion.

With military spending on the decline in the United States, Russia and Western Europe, arms merchants are increasingly anxious to complete deals in export markets such as Southeast Asia.

For example, Indonesia in January announced the acquisition of 39 ships from the East German navy at the bargain basement price of $30 million. It also bought two new submarines from German shipyards.

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