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Annual Report on Military Expenditures, 1998 Submitted to the Committee on Appropriations of the U.S. Senate and the Committee on Appropriations of the U.S. House of Representatives by the Department of State on February 19, 1999, in accordance with section 511(b) of the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1993 |
ARGENTINA MILITARY SPENDING REPORTING PERIOD: January 1 to December 31, 1998. AMOUNT: USD 3.5 Billion PERCENTAGE OF GDP: 0.8 PERCENTAGE OF BUDGET: 8.5 TRENDS IN REAL TERMS: The military restructuring bill which was passed in March allows for three percent annual growth (based on a USD 3.5 billion dollar base) over the next five years. This would be the first increase in over ten years. However, the difficulties in the global financial situation have affected Argentina as well and prospects for seeing any of this "new money" appear dim. While the MOD has been able, so far, to weather the increasingly frequent budget cuts, it is unclear if that can continue. ROLE OF THE ARMED FORCES SIZE OF THE ARMED FORCES: 98,100 Army Officers 5,200 NCOs 21,000 Privates 15,000 Civilians 7,000 Total 48,200 Navy Officers 2,500 NCO'S 13,300 Privates 3,400 Civilians 9,500 Total 28,700 Air Force Officers 2,500 NCO'S 9,700 Privates 1,200 Civilians 7,800 Total 21,200 The armed forces do not perform any constabulary functions. They may, however, provide logistical support to domestic security agencies. The Argentine military has a tradition of participating in international peacekeeping operations since 1958. There are currently approximately 750 members of the Argentine military (including the quasi-military Gendarmeria) deployed in peacekeeping operations. They are in 15 different countries. Another 300 are due to depart next year to participate in the UN's MINURSO in the Western Sahara. COMMENTS ON ITS POLITICAL ROLE: The Argentine military does not play a political role. In contrast to years past during the era of the military juntas, the armed forces no longer pose a threat to the constitutional regime. CAN CIVILIAN AUTHORITIES APPOINT AND REMOVE MILITARY OFFICERS? The Argentine armed forces are fully under civilian authority. The president is the commander-in-chief of the armed forces and is responsible for choosing the military high command, based on the recommendation of the civilian minister of defense. The Argentine congress must confirm all promotions into the senior ranks (colonel and above). In recent years there have continued to be some (three or four per year) promotions refused due to involvement in the "dirty war" of the 1970s and 1980s. REDUCING MILITARY SPENDING FEASIBILITY OF REDUCING MILITARY SPENDING: Over the past 15 years, Argentina's defense budget and military personnel suffered deep (40 percent) reductions. With the approval of the defense restructuring and budget bill mentioned above, the armed forces should see at least a halt in the downward slide. If the economy improves, they also could see a slight increase, the first since 1983. A large portion of the defense budget continues to be spent on personnel costs, estimated to be about 70-80 percent. U.S. EFFORTS TO ENCOURAGE REDUCED MILITARY SPENDING: The United States Government (USG) has worked with the Government of Argentina (GOA) to help ensure that it has a military capacity congruent with its international peacekeeping commitments. With USG urging, the GOA ended its intermediate range missile program, the "Condor II," in 1992-94. The GOA is now a member of the Wassenaar Arrangement regime and the Missile Technology Control Regime (MTCR). As mentioned above, the GOA has reduced its defense spending by 40 percent over the last 15 years. HAS THE COUNTRY PROVIDED ACCURATE MILITARY SPENDING DATA TO RELEVANT INTERNATIONAL ORGANIZATIONS AND ARMS TRANSFER DATA TO THE UN REGISTER OF CONVENTIONAL ARMS? Argentina provides accurate data on military spending to international organizations, as well as information on arms transfers to the United Nations (UN) Register of Conventional Arms. Argentina has regularly submitted standardized military expenditure (MILEX) reports to the UN from 1985 to 1998. In 1998, Argentina participated in the UN Register of Conventional Arms. The MOD predicts that it will soon publish its first defense "White Paper" detailing its strategic planning. HAS THE COUNTRY PARTICIPATED IN REGIONAL TALKS TO REDUCE MILITARY SPENDING? The GOA is an avid participant in the development of regional confidence building measures. It has taken the lead in advocating joint exercises with its neighbors. ASSESSMENT OF MILITARY BUDGET ACCURACY IS THE MILITARY BUDGET ACCURATE AND COMPLETE? We have no evidence that there are any significant "off budget" sources of funds for the Argentine military. TO WHAT DEGREE IS THE MILITARY BUDGET TRANSPARENT? The military budget is developed, controlled, and approved by civilian officials. BRAZIL MILITARY SPENDING REPORTING PERIOD: January 1 to December 31, 1998. Data on authorized spending is based on Brazil's 1998 federal budget (Amounts have been converted to USD at the 1998 average rate of 1.165). [Note: The revised budget figures reflect most budget cuts actually absorbed during the course of 1998.] Amount in Brazilian million reals/(USD): 1998 Original 1998 Revised Army R$ 7,332 (USD 6,294) R$ 7,169 (USD 6,154) Navy R$ 4,355 (USD 3,738) R$ 3,843 (USD 3,299) Air Force R$ 3,889 (USD 3,338) R$ 3,322 (USD 2,852) Total R$ 15,575 (USD 13,370) R$ 14,334 (USD 12,304) PERCENTAGE OF GDP: 1.6 (Revised Budget). PERCENT OF OPERATING BUDGET: 7.9 (Revised Budget). TRENDS IN REAL TERMS: Changing methodologies and erratic disbursement are inherent to the Brazilian budget process. Ministries themselves cannot spend authorized amounts; they must depend on disbursements by the Finance Ministry, based on cash-on-hand. Some ministries get close to their full authorizations, others fall short. In general, changes in military spending result mostly from salary and military pension increases. Trends in operations and maintenance, procurement and research/development were mostly flat or negative. ROLE OF THE ARMED FORCES SIZE OF THE ARMED FORCES: 297,400. Total Army 196,000 Navy 50,700 (including 16,000 Marines) Air Force 50,700 Total 297,400 COMMENTS ON ITS POLITICAL ROLE: See classified annex. REDUCING MILITARY SPENDING FEASIBILITY OF REDUCING MILITARY SPENDING: Brazil's military spending remained low in 1998 relative to the size of the national economy; it remained about the same as the previous year in terms of expenditures, but fell slightly in terms of percentage of GDP. Use of conscription allows Brazil to avoid competitive salaries for the enlisted ranks. The military has been operating for a number of years on a tight budget, with limitations on procurement, operations and training. It does have long-term plans for progressive updates or replacements with modern equipment of a number of aging systems, including fighter aircraft. U.S. EFFORTS TO ENCOURAGE REDUCED MILITARY SPENDING: See classified annex. HAS THE COUNTRY PROVIDED ACCURATE MILITARY SPENDING DATA TO RELEVANT INTERNATIONAL ORGANIZATIONS AND ARMS TRANSFER DATA TO THE UN REGISTER OF CONVENTIONAL ARMS? Brazil has regularly submitted standardized MILEX reports to the UN from 1991 to 1998. In 1998, Brazil participated in the UN Register of Conventional Arms and contributes data to it. HAS THE COUNTRY PARTICIPATED IN REGIONAL TALKS TO REDUCE MILITARY SPENDING? Along with the USG, Brazil officially co-sponsored in 1998 a major Organization of American States (OAS) initiative on transparency in regional conventional weapons acquisition. ASSESSMENT OF MILITARY BUDGET ACCURACY IS THE MILITARY BUDGET ACCURATE AND COMPLETE? See classified annex. TO WHAT DEGREE IS THE MILITARY BUDGET TRANSPARENT? See classified annex. CHILE REPORTING PERIOD: January 1 to December 31, 1998. AMOUNT: According to the Government of Chile (GOC) general auditor's office, the CY1998 defense budget was USD 2.12 billion. This figure includes USD 585 million for pensions and USD 240 million in revenue from the 1948 law (Ley de Cobre) setting aside 10 percent of gross proceeds from state copper sales for military acquisitions. This figure does not include the "Order and Security" section of the budget that covers the national police (Carabineros) and investigative police. PERCENTAGE OF GDP: Defense spending as a percent of GDP was 2.79 percent (GDP for 1998 is estimated at USD 76.1 billion). [Note: The Department's 1997 submission reported the percent of GDP for 1997 as 1.23 percent. The correct figure was 2.78 percent.] PERCENTAGE OF BUDGET: Percent of fiscal budget was 14.75 percent. (This figure includes revenues from copper sales.) [Note: The Department's 1997 submission reported the percent of fiscal budget as nine percent, not including copper revenues. The 1997 percent of fiscal budget including copper revenues was 15.26. percent.] TRENDS IN REAL TERMS: The trend in real terms is a decline in defense spending as a percentage of GDP (4.1 percent in 1990 to 2.72 percent estimated for 1999.) ROLE OF THE ARMED FORCES SIZE OF THE ARMED FORCES: Since publication of the 1997 "Book on the National Defense of Chile," military active service strength has declined slightly, from 89,600 to approximately 88,000 (army at 51,000, navy at 24,000, and air force at 13,000). According to the National Defense Book, the armed forces' role is to preserve the independence, sovereignty and territorial integrity of Chile primarily through deterrence. The other objectives of the national defense are supporting the rule of law, creating the security needed for the common good and development of the nation, and helping to maintain international peace. Although not part of the armed forces budget, Chile's police force (Carabineros and investigative police) are part of the larger defense, order and security budget. Chile is currently participating in international peacekeeping operations, including the Peru-Ecuador observer mission, the India-Pakistan observer mission, and the UN Special Commission (UNSCOM) in Iraq. The Carabineros form part of the international police force in Bosnia. COMMENTS ON ITS POLITICAL ROLE: The armed forces are an important national institution, and attention is paid to their views. The armed forces seldom address issues not directly related to national security or their institutional interests. However, the armed forces tend to view criticisms of their role during the Pinochet regime (1973-1990) as threats to their institutional status and resist judicial or other scrutiny of that period. CAN CIVILIAN AUTHORITIES APPOINT AND REMOVE MILITARY OFFICERS? The armed forces are constitutionally subordinate to the president through an appointed civilian minister of defense. Service commanders can only be removed by the president with the concurrence of the multi-institutional National Security Council. The minister of defense and the president have final approval authority over all military appointments and retirements. REDUCING MILITARY SPENDING FEASIBILITY OF REDUCING MILITARY SPENDING: Real military spending levels are expected to decline in 1999 as part of general budgetary constraints and low copper prices (military revenues from copper peaked at USD 347 million in 1995 and are expected to be USD 255 million in 1999). A broad political consensus in Chile supports the current mission of the armed forces, its modernization and the general level of spending. The multiparty congressional committees overseeing defense reflect this consensus. U.S. EFFORTS TO ENCOURAGE REDUCED MILITARY SPENDING: None. COUNTRY EFFORTS TO REDUCE MILITARY SPENDING: Chile is a leading proponent of transparency in military procurement and institutionalized regional confidence and security-building measures. HAS THE COUNTRY PROVIDED ACCURATE MILITARY SPENDING DATA TO RELEVANT INTERNATIONAL ORGANIZATIONS AND ARMS TRANSFER DATA TO THE UN REGISTER OF CONVENTIONAL ARMS? Chile has often (ten times) submitted standardized MILEX reports to the UN from 1984 to 1996. In 1998, Chile participated in the UN Register of Conventional Arms. HAS THE COUNTRY PARTICIPATED IN REGIONAL TALKS TO REDUCE MILITARY SPENDING? Chile is an active participant in regional efforts for confidence and security-building measures. ASSESSMENT OF MILITARY BUDGET ACCURACY IS THE MILITARY BUDGET ACCURATE AND COMPLETE? The defense budget is considered accurate. Other sources of income (e.g., the percentage of copper revenues from the parastatal copper company (CODELCO), and revenues from civil aviation, military industries, etc.) are publicly known, although revenues generated fluctuate. TO WHAT DEGREE IS THE MILITARY BUDGET TRANSPARENT? The Ministry of Defense has made a notable effort to be transparent, and significant expenditures such as the purchase of submarines or advanced aircraft are debated in the press and by the Congress. COLOMBIA MILITARY SPENDING REPORTING PERIOD: January 1 through December 31, 1998 (Projected) [Note: Data sources are given in parentheses. As accounting methodology differs, sometimes substantially, various sources often report inconsistent numbers. Data are from the Colombian Planeacion (National Planning Office), which in turn are based on the Government of Colombia (GOC) comptroller-general's figures, as much as possible, since those statistics are considered to be the most reliable.] AMOUNT: Police.....1,558,347,000,000 cop* Military...2,913,419,000,000 cop* Total......4,471,766,000,000 cop* (Source: National Planning Office) [*Note: Inability to predict how much the Colombian peso exchange rate will change by the end of 1998 precludes provision of Colombian military spending in U.S. currency at this time. Hence, figures are provided in Colombian pesos (cop) only. When complete exchange-rate figures for 1998 become available, the local currency can be converted to USD. To avoid erroneous comparisons with dollar figures for previous years, it should be kept in mind that the peso has declined 45 (forty-five) percent against the U.S. dollar since July 1997. As benchmarks, the exchange rate (cop/1 USD) on January 1 was 1,293.58; on September 2, 1442.95; and on November 3, 1575.08.] PERCENTAGE OF GDP: Police.....1.2 Military...2.2 Total......3.4 (Source: National Planning Office) PERCENTAGE OF BUDGET: Police.....6.60 Military..12.34 Total.....18.94 (Source: National Planning Office) TRENDS IN REAL TERMS (Real Growth Rates): Figures below are percentage increase or decrease from previous year: Year Police Military Total 1994 3.7% -6.5% -3.1% 1995 13.3% 12.1% 12.6% 1996 11.3% 29.4% 23.0% 1997 5.6% 13.2% 10.8% 1998 9.5% -8.9% -3.2% (Source: The above figures for earlier years differ from those provided last year. The difference may be attributable to the sources. Last year's reported data from the Ministry of Defense (MOD) This year's reports data from the National Planning Office (meaning ultimately the comptroller-general's Office.) The MOD failed to provide trends in real terms for this year. Due to potential confusion owing to differing sources for past year information, a complete breakdown of trends in real terms for years 1981-1998 is provided below: Total Spending: Year Personnel General Transfers Operating Investment Total 1981 9.8% -7.2% 5.2% 4.6% -35.9% 0.4% 1982 7.3% -12.3% -4.7% -0.2% -12.9% -1.0% 1983 17.2% 49.4% 26.7% 25.6% 121.6% 31.1% 1984 5.4% -42.0% 1.9% -5.7% 138.2% 8.2% 1985 -2.5% 12.6% -6.8% -1.8% -33.6% -8.6% 1986 3.4% -29.1% -4.4%- -3.7% 19.9% -0.1% 1987 6.3% 30.4% 5.9% 8.9% 1.0% 7.4% 1988 5.2% 17.8% 0.6% 5.6% 45.7% 12.6% 1989 2.9% -14.9% 4.9% 0.8% 20.7% 5.3% 1990 4.8% 7.0% 2.3% 4.4% -15.3% -0.7% 1991 1.8% 59.7% 12.5% 12.1% -49.7% -1.6% 1992 16.7% 30.9% 8.9% 17.2% 50.7% 21.0% 1993 15.0% 49.1% 26.8% 24.9% 54.9% 29.2% 1994 12.8% -19.9% 30.7% 9.4% -64.5% -3.1% 1995 8.5% 3.6% 29.7% 14.0% -9.8% 12.6% 1996 2.2% 7.4% 37.3% 15.1% 173.8% 23.0% 1997 15.2% 10.7% -18.6% 0.7% 92.2% 10.8% 1998 6.9% 21.7% 9.7% 10.3% -60.0% -3.2% Military Spending: Year Personnel General Transfers Operating Investment Total 1981 8.8% -7.3% 4.9% 3.1% -37.8% -2.9% 1982 8.7% -9.8% -4.4% 0.0% -12.1% -1.1% 1983 13.9% 52.3% 11.1% 21.9% 133.7% 31.2% 1984 -0.1% -45.0% 3.5% -12.0% 132.9% 9.4% 1985 -2.7% 5.3% -2.2% -1.1% -37.1% -12.4% 1986 7.0% -27.1% -9.0% -4.5% 38.1% 5.2% 1987 8.5% 31.4% 5.7% 11.0% -16.0% 3.0% 1988 5.7% 26.7% 0.7% 7.9% 68.0% 22.5% 1989 -0.6% -18.5% 4.7% -2.9% 22.0% 5.4% 1990 6.3% 5.6% 62.4% 21.9% -10.9% 9.3% 1991 1.8% 82.2% 8.8% 16.2% -54.1% -5.8% 1992 16.2% 22.1% 4.7% 13.5% 60.8% 20.7% 1993 19.3% 54.3% 25.9% 30.1% 37.7% 31.7% 1994 11.4% -18.1% 30.8% 8.8% -63.2% -6.5% 1995 11.3% 0.7% 24.9% 14.1% -9.1% 12.1% 1996 3.3% 6.5% 40.9% 19.4% 167.1% 29.4% 1997 11.8% 18.8% -15.1% 0.0% 94.6% 13.2% 1998 6.9% 5.1% 8.9% 7.3% -59.9% -8.9% Police Spending: Year Personnel General Transfers Operating Investment Total 1981 10.8% -7.0% 5.7% 6.6% -23.4% 5.6% 1982 5.9% -18.4% -5.2% -0.4% -16.7% -0.8% 1983 20.6% 41.5% 50.6% 30.5% 53.9% 31.0% 1984 10.6% -33.6% 0.0% 2.1% 183.9% 6.6% 1985 -2.4% 30.3% -12.2% -2.6% -8.8% -3.0% 1986 0.3% -33.0% 1.5% -2.9% -67.5% -6.9% 1987 4.4% 28.4% 6.3% 6.7% 346.8% 14.0% 1988 4.7% -1.4% 0.6% 3.1% -39.7% -0.6% 1989 6.2% -4.8% 5.2% 5.0% 7.2% 5.1% 1990 3.4% 10.5% -67.2% -14.5% -68.2% -17.4% 1991 1.9% 8.4% 34.0% 5.7% 101.5% 7.7% 1992 17.1% 64.7% 28.5% 23.4% -27.6% 21.5% 1993 11.1% 34.3% 30.5% 16.9% 350.3% 24.4% 1994 14.2% -25.6% 30.4% 10.4% -71.7% 3.7% 1995 5.9% 14.2% 46.9% 14.0% -14.8% 13.3% 1996 1.0% 10.3% 26.3% 7.7% 222.4% 11.3% 1997 18.7% -14.1% -31.0% 2.0% 77.5% 5.6% 1998 6.9% 92.0% 13.2% 15.7% -60.7% 9.5% (Source: National Planning Office, based on comptroller-general figures and the 1998 Colombian budget law.) [Note: The decline in overall military spending in 1998 is directly attributable to sharp declines in investment, e.g., equipment and munitions acquisitions, in the military and police forces. In the case of the national police, U.S. aid constitutes virtually all investment for 1998. In the case of the military forces, the drop in investment for 1998 is less severe when viewed in light of the sharp increases for 1996 and 1997 (creating a higher baseline for 1998). One part of the sharp increase for 1997 was a 440 billion peso addition to the budget, from "peace bonds". These funds were obligated in 1997, many with out-year delivery of the goods. For instance, a large quantity of munitions were purchased in 1997 for 1998 delivery, thus obviating the need for a similar purchase in 1998.] ROLE OF THE ARMED FORCES SIZE OF THE ARMED FORCES: Police.....100,469 Military...153,792 Total......254,261 (Source: Ministry of Defense, September 1998 payroll) COMMENTS ON ITS POLITICAL ROLE: Colombia has the longest running continuous democracy in South America and, under the 1991 constitution, a civilian minister of defense. The constitution states that the military and police comprise Colombia's "public forces" with the "defense of sovereignty, independence and integrity of the national territory" as the responsibility of the military; and with the police defined as a "permanent armed force of a civil nature-- responsible for maintaining the conditions necessary for the exercise of public rights and liberties and to ensure Colombians live together in peace." CAN CIVILIAN AUTHORITIES APPOINT AND REMOVE MILITARY OFFICERS? Commanders serve at the pleasure of the president who is commander-in-chief. Civilian leaders may freely appoint and remove senior military officers, a power most recently exercised by newly elected President Pastrana, who replaced all the service chiefs and the commanding general of the military forces in August 1998. REDUCING MILITARY SPENDING FEASIBILITY OF REDUCING MILITARY SPENDING: It is not strategically feasible, given the current security situation in Colombia, for the GOC to reduce military spending in the foreseeable future. Guerrilla insurgents, paramilitaries, common criminals and well-armed drug traffickers combine to create a dangerous security situation for Colombia's public forces. In many regions of Colombia there is already little or no military/police presence, making it easy for guerrillas or other armed groups to control the local populations. Colombia has largely cordial relations with its neighbors, although guerrilla incursions and cross-border refugees have caused strain, particularly with Venezuela and Panama. Additionally, guerrillas utilize Ecuadorian territory for safe haven. Many observers opine that the current military is simply not big enough or properly equipped to handle Colombia's vast expanses and myriad problems. Other commentators disagree and cite a lack of intelligence capability, communications equipment, air mobility, and political will as the roots of the military's current poor performance. In either case, reducing military spending is not a realistic or desirable option in the near term. U.S. EFFORTS TO ENCOURAGE REDUCED MILITARY SPENDING: Due to the threats outlined above, the USG has not encouraged Colombia to reduce military expenditures. COUNTRY EFFORTS TO REDUCE MILITARY SPENDING: Fiscal realities in Colombia may soon force the armed forces to stabilize their defense budget as a percentage of GDP (as opposed to the trend of increasing percentages of GDP in recent years). Colombia is not making any multilateral efforts to reduce military spending. HAS THE COUNTRY PROVIDED ACCURATE MILITARY SPENDING DATA TO RELEVANT INTERNATIONAL ORGANIZATIONS AND ARMS TRANSFER DATA TO THE UN REGISTER OF CONVENTIONAL ARMS? Colombia occasionally (four times) has submitted standardized MILEX reports to the UN from 1983 to 1993. In 1998, Colombia did not participate in the UN Register of Conventional Arms. In the past, Colombia has participated. Colombia has provided military spending data to interested parties. The accuracy of the data is sometimes questionable--different GOC sources often report widely differing statistics for the same element, and sometimes the Colombians themselves do not accurately know basic facts, such as precisely how much each service spent in any given year, or exactly how much their defense spending has changed from year to year. These differences are attributed more to statistical errors or different compilation methods rather than any unwillingness on the part of the GOC to provide the data. Other factors in the Colombian military funding and appropriations processes which can cause inadvertent confusion are described below: Since the entitlement portion of the defense budget is obligatory, the operations and investment/acquisition portions become the only areas where cuts can be made. So far, the military has mainly been able to avoid such cuts by simply increasing the overall defense budget to accommodate the increasing entitlement requirements while maintaining roughly historical levels of spending on operations and investment. In 1999, however, the GOC's critical budget plight raised a possibility of real cuts in the military budget which, barring immediate and drastic reform of the military entitlement structure, would have come from operations/acquisitions. One factor mentioned which tends to confuse defense-budget analysis is the Colombian process of appropriation. Through supplemental appropriations and other various in-year adjustments, the Colombian armed forces almost always wind up spending more than their initial annual appropriation. For example, the 1997 "cut" in the defense budget was more than made up for in war bonds (a one-time supplemental tax), and the armed forces actually spent an amount slightly more than their initial appropriation. Another confusing element to the defense budget is the fact that the CNP in particular receives a large portion of its operations and investment equipment directly from local or international sources, "off the books" from the perspective of the central government. For example, local mayors and departmental governors often provide fuel, ammunition, radios, flak jackets, etc., directly to the CNP units responsible for their municipality or department. Likewise, other nations such as the U.S. provide equipment such as helicopters and arms to the CNP. The CNP has no obligation to report these acquisitions to the central government. The Planeacion data suggests that the CNP does not depend on the central government for a large portion of its acquisitions and operating expenditures. HAS THE COUNTRY PARTICIPATED IN REGIONAL TALKS AIMED AT REDUCING MILITARY SPENDING? No such talks have taken place. ASSESSMENT OF MILITARY BUDGET ACCURACY IS THE MILITARY BUDGET ACCURATE AND COMPLETE? The armed forces' budget is generally complete. Local police stations in particular, and probably to a lesser extent local military bases, often receive material assistance directly from the local departmental and municipal governments they support. Although not illegal, such assistance is "off the books" from the perspective of the central government, hamstrings the National Planning Office's (Planeacion) efforts to accurately gauge the investment expenditures of the public forces, and contributes to inaccuracies in defense spending data. The Colombian army is also known to receive substantial sums of money directly from corporations, including multinational oil companies for whom the army provides security protection. In 1997 a compulsory peace- bond issuance resulted in a 440 billion peso one-time addition to the armed forces' original appropriation. However, in general, the Colombians are relatively open about their resource shortfalls and spending patterns, if for no other reason than to solicit help. Rumors of corruption (accounting for, by one specialist's estimate, 30 percent of the military investment budget) surround some military and police officers, but they are not thought to be using illicit income to supplement the public forces budget. The guerrillas and paramilitaries, on the other hand, are well-financed through criminal activity and ties with narcotraffickers. TO WHAT DEGREE IS THE MILITARY BUDGET TRANSPARENT? Notwithstanding the inaccuracies and inconsistencies noted above, the military budget is generally transparent. The U.S. Embassy has encountered little resistance from any GOC office in providing whatever budgetary statistic asked for. The military is accountable to civilian authority for budget performance, as for any other activity. CZECH REPUBLIC MILITARY SPENDING REPORTING PERIOD: January 1 to December 31, 1998 AMOUNT: Military spending for 1998 was 1.1 billion U.S. dollars or 30.2 billion Czech Crowns (One dollar equals 29 Czech Crowns). PERCENTAGE OF GDP: 1.8 PERCENTAGE OF BUDGET: 6.9 TRENDS IN REAL TERMS: Military spending increased by 0.1 percent of GDP, a sign of the Czech Republic's commitment to its imminent NATO membership. ROLE OF THE ARMED FORCES SIZE OF THE ARMED FORCES: Armed forces personnel strength held steady at roughly 55,000. The armed forces participate in Partnership for Peace and various international peacekeeping operations. They contributed a mechanized infantry battalion to the NATO Stabilization Force (SFOR) operation in Bosnia. COMMENTS ON ITS POLITICAL ROLE: The Czech armed forces are apolitical. Officers are barred from elected office and membership in political parties. CAN CIVILIAN AUTHORITIES APPOINT AND REMOVE MILITARY OFFICERS? Civilian control of the military is accepted in theory and practice. The civilian minister of defense has authority to appoint and remove officers. The president appoints and promotes generals. REDUCING MILITARY SPENDING FEASIBILITY OF REDUCING MILITARY SPENDING: In connection with efforts to improve interoperability with NATO and prepare for membership in the Alliance, the Czech focus has been on increasing rather than REDUCING MILITARY SPENDING. The U.S. and other NATO allies have encouraged these efforts. The current Czech government has reiterated the commitment of its predecessor to increase military spending to at least 2.0 percent of GDP by the year 2000. U.S. EFFORTS TO ENCOURAGE REDUCED MILITARY SPENDING: None. COUNTRY EFFORTS TO REDUCE MILITARY SPENDING: None. HAS THE COUNTRY PROVIDED ACCURATE MILITARY SPENDING DATA TO RELEVANT INTERNATIONAL ORGANIZATIONS AND ARMS TRANSFER DATA TO THE UN REGISTER OF CONVENTIONAL ARMS? We have no reason to doubt the accuracy of the military spending information the Czech Republic has provided to relevant international organizations, including NATO, although the U.S. Embassy does not have the resources to verify this information. The Czech Republic has regularly submitted standardized MILEX reports to the UN from 1991 to 1998. In 1998, the Czech Republic participated in the UN Register of Conventional Arms and provided arms transfer data. HAS THE COUNTRY PARTICIPATED IN REGIONAL TALKS TO REDUCE MILITARY SPENDING? There are no such regional talks. ASSESSMENT OF MILITARY BUDGET ACCURACY IS THE MILITARY BUDGET ACCURATE AND COMPLETE? The budget is believed to be accurate. In 1997, the bulk of the Czech contribution to SFOR was funded outside the defense budget. However, these costs were included in the 1998 defense budget. We are aware of no "off-budget" sources of income. The Czech Republic now uses NATO's definition of "military" spending, which does not include some budget items (e.g., military pensions) included in previous reports under the heading of defense spending. TO WHAT DEGREE IS THE MILITARY BUDGET TRANSPARENT? The budget is transparent, prepared by the civilian-controlled Ministry of Defense, and the subject of often-contentious debate within the government and parliament. The military is fully subordinate to civilian authorities. EGYPT MILITARY SPENDING REPORTING PERIOD: January 1 to December 31, 1998. AMOUNT: Uncertain. An unknown percentage of LE 22 billion (about USD 6.47 billion). [Note: No amount was given for defense and security in the 1998/99 budget. Subtracting all other listed expenditures from the budget leaves LE 22 billion (USD 6.47 billion).] This year's figure contains more than just the defense/interior/justice accounts. The Government of Egypt (GOE) has over the past several years combined expenditures on the military, internal security, and justice and provided only one figure. The military portion (unspecified) of this figure has traditionally included military wages, local purchases and maintenance but does not include USD 1.3 billion in USG Foreign Military Financing (FMF) security assistance. Other (non-FMF) military procurement, debt servicing, and support for the military have never been made available to the public. However, it is not known what other expenditures were left out as well. In past years, defense, interior and justice have been included together. Since this year's amount is almost double what was spent for those three agencies last year, it must be assumed that additional expenditures are included in this year's amount. At the same time, there may be some dual-use expenditures which are part of other line items. In any event, it is clear that the LE 22 billion figure is not a true reflection of what the GOE spends on defense, which could be considerably lower. PERCENTAGE OF GDP: 7.4 percent. Using the omnibus LE 22 billion (same caveat as above; again almost double last year, therefore likely contains other funding). PERCENTAGE OF BUDGET: 24.23 percent. Using the omnibus LE 22 billion (same caveat as above; again almost double last year, therefore likely contains other funding). TRENDS IN REAL TERMS: Probably half of Egyptian military spending is provided by USG FMF assistance (USD 1.3 billion annually since FY 1987). In 1979 dollars, today's assistance would amount to less than $600 million after the effects of inflation are taken into account. ROLE OF THE ARMED FORCES SIZE OF ARMED FORCES: According to International Institute for Strategic Studies (IISS) information for 1995, the active duty Egyptian armed forces number approximately 440,000. This figure represents more than a one-third reduction since the signing of the Camp David accords. Egyptian forces participate in a number of international peacekeeping operations and Egypt currently has peacekeepers serving in Angola, Western Sahara, Georgia, and Macedonia. An Egyptian battalion served for two years with SFOR in Bosnia until its departure in December 1998 as part of a coordinated drawdown of forces. COMMENTS ON ITS POLITICAL ROLE: The Egyptian military is considered the ultimate guarantor of political stability in Egypt. Although the armed forces normally play no role in maintaining internal security, the armed forces are prepared to step in to maintain order in extreme cases of unrest. CAN CIVILIAN AUTHORITIES APPOINT AND REMOVE MILITARY OFFICERS? President Mubarak's civilian government has ultimate responsibility for appointments and removals in the military. REDUCING MILITARY SPENDING FEASIBILITY OF REDUCING MILITARY SPENDING: Egypt is largely reliant on foreign funding or excess defense articles for its weapons systems acquisition. The government minimizes the amount of national funds spent on the military, using national funds only when foreign security assistance will not support weapons acquisitions and follow-on support. As noted above, Egypt already has lost at least 50 percent of its U.S. security assistance due to inflation. U.S. EFFORTS TO ENCOURAGE REDUCED MILITARY SPENDING: Encouraging reduction in Egyptian military expenditures is not a USG priority. Significant cuts would jeopardize the joint U.S.-Egyptian objective of armed forces modernization and other USG interests in the region. However, the USG has worked with the Egyptian government to improve prioritization and better utilize the funds the GOE does have available. COUNTRY EFFORTS TO REDUCE MILITARY SPENDING: Given the absence of public information on the military budget, no information is available on government reductions in military spending. However, due to inflation and stagnation, it is likely that Egyptian military spending (as with FMF) has been reduced in real terms. Also see classified annex. HAS THE COUNTRY PROVIDED ACCURATE MILITARY SPENDING DATA TO RELEVANT INTERNATIONAL ORGANIZATIONS AND ARMS TRANSFER DATA TO THE UN REGISTER OF CONVENTIONAL ARMS? The defense budget is closely held and has not been provided to any international organizations. Egypt has never submitted a standardized MILEX report to the UN. In 1998, Egypt did not participate in the UN Register of Conventional Arms. In the past, Egypt has participated. Egypt provided information to the conventional arms register its first year but has declined to provide information since then in protest of what it considers deficiencies in the register which have not been addressed. HAS THE COUNTRY PARTICIPATED IN REGIONAL TALKS TO REDUCE MILITARY SPENDING? Egypt in the past has been an active participant in the arms control and regional security working group of the Middle East Peace Process. No official meeting were held in 1998, but Egyptian officials have participated in academic meetings on similar issues. ASSESSMENT OF MILITARY BUDGET ACCURACY IS THE MILITARY BUDGET ACCURATE AND COMPLETE? The military budget is not shared publicly. TO WHAT DEGREE IS THE MILITARY BUDGET TRANSPARENT? Portions of the military budget are reviewed in closed sessions by designated committees of the People's Assembly. EL SALVADOR MILITARY SPENDING REPORTING PERIOD: January 1 to December 31, 1998. AMOUNT: The 1998 defense budget was approx. USD 104.6 million, or 915.6 million colones (at 8.75 colones to the dollar). PERCENTAGE OF GDP: The 1998 defense budget represented 0.9 percent of GDP. PERCENTAGE OF BUDGET: The 1998 defense budget was approximately 5.4 percent of the total 1998 government budget. TRENDS IN REAL TERMS: Although the FY 98 budget represents a slight increase over the FY 97 budget of USD 101.2 million, the budget is not sufficient to address many of the El Salvadoran armed forces (ESAF) requirements. With more than 75 percent of the budget going to personnel expenses, there is little left for equipment purchases and maintenance. ROLE OF THE ARMED FORCES SIZE OF THE ARMED FORCES: The ESAF has an approximate strength of 15,000 soldiers under arms and a civilian/administrative workforce of approximately 5,000 personnel. The 1992 peace accords mandated the removal of internal security forces from military control. The president has the power to employ the ESAF for internal security purposes in exceptional circumstances only. For the past four years, in response to critical crime levels during the establishment of the national civilian police (PNC), the president has directed the ESAF to participate in joint rural patrols under PNC operational control. Close to 200 such patrols, including six ESAF personnel and two PNC agents, are in the field at any one time. The ESAF is anxious for the circumstances to develop in which this role is no longer necessary, because the ESAF receives no additional funding for this activity. ESAF personnel have participated in international peacekeeping operations (PKO). There are currently two army captains serving with the UN PKO in the Western Sahara (third rotation) and one army first lieutenant in Kuwait with the Argentine contingent. The ESAF has abided by its constitutional mandate to provide for external defense. COMMENTS ON ITS POLITICAL ROLE: The ESAF is entirely apolitical and is under civilian control. In January 1998, the minister of defense retired from the military, and is now a civilian. This is meant to provide a transition to the practice of appointing civilians as ministers of defense. CAN CIVILIAN AUTHORITIES APPOINT AND REMOVE MILITARY OFFICERS? The president has the power to appoint and remove the minister of defense, the high command, and all officers. He also has the constitutional prerogative of approving or disapproving officer promotions. In practice, the current president only has exercised this privilege with regard to general officer promotions; he has not reviewed company or field grade promotions. REDUCING MILITARY SPENDING FEASIBILITY OF REDUCING MILITARY SPENDING: The military budget continues to be effectively reduced by inflation. The decline in real terms of the military budget has led to an erosion of military capability. U.S. EFFORTS TO ENCOURAGE REDUCED MILITARY SPENDING: The U.S. has encouraged the Government of El Salvador (GOES) to bring military spending in line with legitimate defense needs. A declining budget in real terms, and the continuing reduction in money available through Foreign Military Spending (FMS), will lead to continued reductions in real capabilities. The ESAF has received no new FMF dollars since the end of the civil war. COUNTRY EFFORTS TO REDUCE MILITARY SPENDING: Efforts to reduce military spending have been unilateral, by permitting the budget to decline in real terms. HAS THE COUNTRY PROVIDED ACCURATE MILITARY SPENDING DATA TO RELEVANT INTERNATIONAL ORGANIZATIONS AND ARMS TRANSFER DATA TO THE UN REGISTER OF CONVENTIONAL ARMS? The GOES provides military spending and arms transfer data to international organizations. The ESAF military budget is unclassified and available to the public. El Salvador has submitted standardized MILEX reports to the UN two times--1987 and 1996. In 1998, El Salvador did not participate in the UN Register of Conventional Arms. In the past, El Salvador has participated. HAS THE COUNTRY PARTICIPATED IN REGIONAL TALKS TO REDUCE MILITARY SPENDING? El Salvador has participated in regional talks on security issues. ASSESSMENT OF MILITARY BUDGET ACCURACY IS THE MILITARY BUDGET ACCURATE AND COMPLETE? The military budget does not include the following off-budget income sources: -- U.S. bilateral military assistance. -- Self-sufficient efforts. Six military organizations are authorized to engage in for-profit ventures in order to maintain and upgrade the equipment on hand. Funds generated in this way must be deposited into an identified account in the national treasury, whence they are disbursed to the military. -- The military retirement fund, the government contribution to which is included in the budget, earns funds through investments in the private financial sector. The type of investments allowed by the government is tightly controlled. Military personnel also pay a portion of their salaries into this fund. -- Military cooperative stores are managed with contributions from military members on a share holder basis. Their assets are not included in the overall military budget. Although there is no practice of making supplemental authorizations to augment the initially-approved military budget, the 1998 privatization of a national power distributor enabled the Assembly to authorize as additional 16 million colones (USD 1.8 million) for the FY 98 ESAF budget. The ministry of defense stated that the supplement would be spent on infrastructure renovation and wheeled vehicles. TO WHAT DEGREE IS THE MILITARY BUDGET TRANSPARENT? The military budget is becoming more transparent and, as a result, there is increased accountability to civilian authorities. The ESAF presentation to the legislative assembly of the FY 99 budget was well received by the Assembly. ERITREA Eritrea, an impoverished state which became independent in 1993 after a 30-year fight for its freedom, does not publish a budget. The government is particularly sensitive about releasing any information on military expenditures. Between 1993 and mid-1998 the government made a great effort to reduce the size of the force which had won independence. However, in May 1998 a border dispute broke out between Eritrea and Ethiopia. Since then both sides have made Herculean efforts to expand their armed forces. While there is anecdotal information available concerning the extent of Eritrea's military build-up, we have no firm figures on actual costs. It is therefore impossible to produce numbers on military spending except to say that the budget has grown exponentially beyond the USD 82.66 million projected for 1998. The U.S. Department of Defense hopes to assign a permanent military attachˇ to Asmara in the very near future. This will markedly improve our ability to estimate the strength of the Eritrean military. MILITARY SPENDING REPORTING PERIOD: January 1 to December 31, 1998. AMOUNT: Figures not available. PERCENTAGE OF GDP: Figures not available. PERCENTAGE OF BUDGET: Figures not available. TRENDS IN REAL TERMS: In the first five months of 1998 Eritrea continued its efforts to decrease the size of the revolutionary force which won the country's independence from Ethiopia. More than 100,000 men and women were in the armed forces at the time of independence. By early 1998 that figure had been reduced to 47,000. Every citizen between the ages of 18 and 40 is required to serve 18 months of national service, six months of which is military training. After the border dispute with Ethiopia broke out in May, the government called up all reservists bringing the armed forces back to over 100,000 members. Taxes on citizens resident in Eritrea and Eritreans in diasphora were increased. Overseas citizens have contributed generously. Unknown amounts of funds have been provided by foreign governments, including Libya and Qatar. Economic and social development spending was dramatically reduced. Funds generated in these ways have been used to expand the military. Huge purchases of the most sophisticated equipment (i.e. MiG-29s, SAMs) were made from various sources, mostly in Eastern Europe and the CIS. ROLE OF THE ARMED FORCES SIZE OF THE ARMED FORCES: Over 100,000. The military does not participate in international peacekeeping operations. COMMENTS ON ITS POLITICAL ROLE: The military does not have a direct role in civilian affairs. However, it should be noted that the President of Eritrea was the military commander during the war for independence, and the military has a strong voice in decisions far outside the usual military purview. The military's primary role is to provide for the national defense and to assist in rebuilding infrastructure, much of which was destroyed during the war for independence. CAN CIVILIAN AUTHORITIES APPOINT AND REMOVE MILITARY OFFICERS? The defense minister is appointed and removed by the civilian (formerly military) president and reports directly to the president. The minister of defense plays a significant role in approving major strategic military decisions. Subordinates within the military and ministry of defense are selected by the minister of defense. Senior ranking officers are not approved by the National Assembly, as is the case for Congressional confirmation of senior U.S. military officials. The military is clearly under the control of the civilian leadership. REDUCING MILITARY SPENDING FEASIBILITY OF REDUCING MILITARY SPENDING: Eritrea is situated in a volatile region of strategic importance to the U.S. The Eritrean Islamic Salvation (formerly the Eritrean Islamic Jihad), which is given funds and safehaven by Sudan, has committed terrorist acts against foreigners and "soft" non-military targets, including schoolyards and wedding parties. Sudanese planes have bombed targets inside Eritrea. Eritrea has also engaged in minor armed clashes with Yemen and Djibouti over the past five years, but these issues appear to have been resolved. The 47,000-person force which existed in early 1998 was adequate to meet these challenges. These issues have been dwarfed by Eritrea's response to the border crisis with Ethiopia. If that crisis is resolved peacefully, it is possible that Eritrea will again reduce the size of its armed forces. However, it is unlikely that the armed forces will go down to 47,000 any time soon given the degree of mistrust which now prevails between Eritrea and its large neighbor to the south. U.S. EFFORTS TO ENCOURAGE REDUCED MILITARY SPENDING; COUNTRY EFFORTS TO REDUCE MILITARY SPENDING: Eritrea is not making any effort currently to downsize its military. The U.S. has sent facilitation teams led by former National Security Advisor Lake to the region to help Eritrea and Ethiopia to reach a peaceful resolution of their border problem. The U.S. also supports similar efforts undertaken by the Organization of African Unity. HAS THE COUNTRY PROVIDED ACCURATE MILITARY SPENDING DATA TO RELEVANT INTERNATIONAL ORGANIZATIONS AND ARMS TRANSFER DATA TO THE UN REGISTER OF CONVENTIONAL ARMS? No. No overall budget exists; no military budget is published. Few financial documents of any sort have been made available. However, general figures found in the recently published National Economic Policy Framework for 1998-2000 mark a start in publishing figures for government spending. USAID has provided assistance in developing government statistics. As that statistical base is developed, the government can be expected to increase the number of statistical and financial reports. Eritrea has never submitted a standardized MILEX report to the UN. In 1998, Eritrea did not participate in the UN Register of Conventional Arms. HAS THE COUNTRY PARTICIPATED IN REGIONAL TALKS TO REDUCE MILITARY SPENDING? No. No such forum exists. ASSESSMENT OF MILITARY BUDGET ACCURACY IS THE MILITARY BUDGET ACCURATE AND COMPLETE? No. See above. TO WHAT DEGREE IS THE MILITARY BUDGET TRANSPARENT? Not at all, both because of limited statistical capability and a reluctance to publicize information which might be useful to Ethiopia in the current border crisis. ETHIOPIA MILITARY SPENDING REPORTING PERIOD: Because of the different calendar followed in Ethiopia, its budget runs from July 8, 1998 to July 7, 1999. AMOUNT: Figures are provided in Ethiopian birr, with the dollar amount in parentheses, calculated at the current rate of exchange (7.25 birr to USD 1). Ethiopia's FY 98-99 budget allocation for military expenditures is birr 995 million (USD 137.2 million) out of a federal budget of birr 11.1 billion (USD 1.53 billion). PERCENTAGE OF GDP: 2.18 percent of GDP (roughly USD 6.3 billion in 1998/99). PERCENTAGE OF BUDGET: The military budget is about 8.9 percent of the total budget. TRENDS IN REAL TERMS: In birr, military spending increased 13.9 percent in 1998/99. The birr devalued against the U.S. dollar by about 6.8 percent in the last year, therefore the increase in dollar terms was only about 8.89 percent. On the other hand, since the overall 1998/99 budget decreased by 7.48 percent from that of last year, the military share of the budget actually increased significantly from 7.25 percent in 1997/98 to the current 8.9 percent. The increase in the defense budget (the first increase in seven years) reflects increased spending as a result of the ongoing border dispute with Eritrea. Also see classified annex. ROLE OF THE ARMED FORCES SIZE OF THE ARMED FORCES: The size of Ethiopia's armed forces, which had been significantly downsized over the last several years, has at least doubled since June to approximately 200,000 (or more, according to some sources). The military consists of three infantry corps with limited armor (although this has been increased since the outbreak of the border dispute) and artillery support, and an air force which is severely constrained by maintenance problems and pilot shortages. Ethiopia is landlocked and no longer maintains a navy. Also see classified annex. COMMENTS ON ITS POLITICAL ROLE: The armed forces are increasingly apolitical. There is a clear distinction between those ruling party members who occupy civil positions and those in the military. The establishment of a national police force in 1994 reinforced this trend. Nevertheless, until the armed forces better reflect the ethnic diversity of the population, some segments of the population will continue to perceive the military as ethnically-based and biased. (Comment: The armed movement which overthrew the Mengistu regime was essentially a Tigray-based movement, and the officer corps remains heavily Tigrayan.) CAN CIVILIAN AUTHORITIES APPOINT AND REMOVE MILITARY OFFICERS? The military is clearly subordinate to the political leadership and civilians appoint military officers and direct operational activities. The government has emphasized that the military is working to create an ethnically representative, apolitical institution (with political rights for the individual), subject to the constraints of the constitution and the authority of the elected civilian government. REDUCING MILITARY SPENDING FEASIBILITY OF REDUCING MILITARY SPENDING: Given the threat posed by continuing instability in Somalia, the potential for conflict with Sudan and the requirements associated with Ethiopia's emerging role as a participant in international peacekeeping operations, the size of Ethiopia's armed forces (100,000 in April 1998) just before the outbreak of the conflict with Eritrea was appropriate. Further reductions in defense spending were not feasible and would have been imprudent. U.S. EFFORTS TO ENCOURAGE REDUCED MILITARY SPENDING: The U.S. is deeply concerned by the ongoing Ethiopia-Eritrea dispute, and has been actively involved in facilitating negotiations for a peaceful resolution. To date, however, there has been no settlement and it is unlikely that any outside party could convince Ethiopia to abandon its current military build-up before a peace agreement is signed. COUNTRY EFFORTS TO REDUCE MILITARY SPENDING: See above response. HAS THE COUNTRY PROVIDED ACCURATE MILITARY SPENDING DATA TO RELEVANT INTERNATIONAL ORGANIZATIONS AND ARMS TRANSFER DATA TO THE UN REGISTER OF CONVENTIONAL ARMS? The USG has urged Ethiopia to participate in international and regional peacekeeping efforts. Their support for, and interest in, participating in the Africa Crisis Response Initiative (ACRI) continues, although scheduled training was canceled due to the border dispute with Eritrea. Once that conflict is resolved, Ethiopia is expected to continue its willingness to contribute to peacekeeping operations. Ethiopia is a signatory to international weapons conventions and willingly responds to its obligations in terms of reporting. Ethiopia has never submitted a standardized MILEX report to the UN. In 1998, Ethiopia participated in the UN Register of Conventional Arms. HAS THE COUNTRY PARTICIPATED IN REGIONAL TALKS TO REDUCE MILITARY SPENDING? Ethiopia does not participate in any regional talks aimed at REDUCING MILITARY SPENDING. ASSESSMENT OF MILITARY BUDGET ACCURACY IS THE MILITARY BUDGET ACCURATE AND COMPLETE? The published overall budget reflects available revenues as accurately as they are known, and presents the government's best estimate and plans for military spending. When, as happened this year, the government suddenly overspent the military budget, the funds were siphoned from other line items, and not paid from some off-budget source. There is no practice of Parliament's making supplemental military appropriations. TO WHAT DEGREE IS THE MILITARY BUDGET TRANSPARENT? The details of the military budget are not available to the general public, nor are defense contacts open to discussing them. GHANA MILITARY SPENDING REPORTING PERIOD: January 1 to December 31, 1998. AMOUNT: $56 million; $40.5 million recurrent expenditure and $15.5 million in development/capital expenditure (2300 cedis: $1). PERCENTAGE OF GDP: 0.73 percent of Ghana's estimated GDP of $7.659 billion. PERCENTAGE OF BUDGET: 4.4 percent of the total budget; military recurrent expenditure accounts for 5.9 percent of total recurrent expenditure and military development/capital expenditure accounts for 2.6 percent of total development/capital expenditure. TRENDS IN REAL TERMS: In real terms, defense spending is rising significantly and is expected to continue to rise as the Ghana armed forces (GAF) plan to acquire major platform items from the U.S. ROLE OF THE ARMED FORCES SIZE OF THE ARMED FORCES: Approximately 7,000 people. The GAF serve in a traditional national defense role, patrol borders, monitor coastal waters, etc. The GAF also play an important international peacekeeping role, with nearly one-fifth of the force currently outside the country, primarily in Lebanon and Liberia. COMMENTS ON ITS POLITICAL ROLE: The GAF is officially apolitical; however, groups with political affiliations do exist within the military, primarily associated with the ruling party. In additional, active duty officers routinely take secondments to political jobs. CAN CIVILIAN AUTHORITIES APPOINT AND REMOVE MILITARY OFFICERS? Civilian control of the military has become a widely accepted concept in the GAF. REDUCING MILITARY SPENDING FEASIBILITY OF REDUCING MILITARY SPENDING: Resources for the GAF are already extremely limited, particularly in light of extensive Economic Community of West African States Ceasefire Monitoring Group (ECOMOG) peacekeeping duties. Thus, it is unlikely that any reduction in military spending is forthcoming. U.S. EFFORTS TO ENCOURAGE REDUCED MILITARY SPENDING: None; indeed, the USG is actively promoting the acquisition of U.S. excess defense articles, for which rehabilitation costs are expected to increase GAF expenditures. COUNTRY EFFORTS TO REDUCE MILITARY SPENDING: None. HAS THE COUNTRY PROVIDED ACCURATE MILITARY SPENDING DATA TO RELEVANT INTERNATIONAL ORGANIZATIONS AND ARMS TRANSFER DATA TO THE UN REGISTER OF CONVENTIONAL ARMS? Ghana has never submitted a standardized MILEX report to the UN. In 1998, Ghana did not participate in the UN Register of Conventional Arms. HAS THE COUNTRY PARTICIPATED IN REGIONAL TALKS TO REDUCE MILITARY SPENDING? Ghana participated in sub-regional discussions on limitations in the trade of small arms, but no discussions regarding reduction of military spending exist in the region. ASSESSMENT OF MILITARY BUDGET ACCURACY IS THE MILITARY BUDGET ACCURATE AND COMPLETE? The budget is accurately presented. The GAF does, however, receive support for its peacekeeping efforts; from the U.S. and UN, amongst others. For example, the U.S. Department of State provided a large package of non-lethal aid to Ghana during the 1998 ACRI training. TO WHAT DEGREE IS THE MILITARY BUDGET TRANSPARENT? Military budget allocations are transparent as funding for the GAF is approved by the democratically-elected parliament. The accountability of the GAF's expenditures, however, is under no independent or public review. The GAF has consistently refused to provide Parliament a year-end accounting of expenses. GUATEMALA MILITARY SPENDING REPORTING PERIOD: January 1 to December 31, 1998. AMOUNT: The proposed defense budget for calendar year 1999 is 845 million quetzales or USD 132.3 million at an exchange rate of USD 1 equals q6.40. PERCENTAGE OF GDP: 0.63. PERCENTAGE OF BUDGET: Defense spending is 4.4 percent of the national budget. TRENDS IN REAL TERMS: Despite a six (6) percent nominal increase in projected defense spending, real spending is flat, as Guatemala's inflation rate for 1999 is projected at approximately 6 percent. ROLE OF THE ARMED FORCES SIZE OF THE ARMED FORCES: See classified annex. COMMENTS ON ITS POLITICAL ROLE: See classified annex. CAN CIVILIAN AUTHORITIES APPOINT AND REMOVE MILITARY OFFICERS? President Arzu continues to dismiss, appoint and transfer senior officers at will. REDUCING MILITARY SPENDING FEASIBILITY OF REDUCING MILITARY SPENDING: See classified annex. U.S. EFFORTS TO ENCOURAGE REDUCED MILITARY SPENDING: The U.S. has had only a limited relationship with the Guatemalan military for some time and has very little leverage on defense budget planning. We are working to strengthen the cadre of civilian professionals trained in defense resource management so that they will be able to produce reasonable and effective military budgets as civilianization of national defense increases. We continue to focus our use the E-IMET program to achieve this. We have arranged to send the legal advisor to the Guatemalan Congress' Defense Committee to a National Defense University course on defense resource management in early 1999. We have also proposed that Guatemalan universities establish national security education programs. COUNTRY EFFORTS TO REDUCE MILITARY SPENDING: Within the past two years the government has significantly reduced the military budget in accordance with the peace accords. We expect that the government will concentrate on other pressing issues while the army adjusts to downsizing and reorientation of its mission. Over time, increased democratic oversight of national security spending should help to ensure appropriate military budgets. HAS THE COUNTRY PROVIDED ACCURATE MILITARY SPENDING DATA TO RELEVANT INTERNATIONAL ORGANIZATIONS AND ARMS TRANSFER DATA TO THE UN REGISTER OF CONVENTIONAL ARMS? Guatemala has never submitted a standardized MILEX report to the UN. In 1998, Guatemala participated in the UN Register of Conventional Arms. We understand that Guatemala provided a null report to the UN Register of Conventional Arms. We do not know if Guatemala provided accurate military spending data to relevant international organizations. HAS THE COUNTRY PARTICIPATED IN REGIONAL TALKS TO REDUCE MILITARY SPENDING? Guatemala participates actively in the Conference of Central American Armed Forces (CFAC). It was the CFAC's headquarters in 1998 and will remain so in 1999. Among CFAC's projects is consideration of the possibility that regional militaries could share tasks and standardize equipment purchases to pool increasingly scarce resources. Guatemala is also engaged in planning its participation in the Third Defense Ministerial of the Americas, which will promote decreased defense spending by fostering mutual confidence and security in the hemisphere. ASSESSMENT OF MILITARY BUDGET ACCURACY IS THE MILITARY BUDGET ACCURATE AND COMPLETE? See classified annex. TO WHAT DEGREE IS THE MILITARY BUDGET TRANSPARENT? See classified annex. HONDURAS MILITARY SPENDING REPORTING PERIOD: January 1 to December 31, 1998. AMOUNT: The official CY 1998 national government budget allocation for the three branches of the armed forces (army, navy, air force) was 444.5 million Lempiras, which is equivalent to USD 32.92 million (at the exchange rate of 13.5 lps/USD). PERCENTAGE OF GDP: The 1998 defense budget represented 0.6 percent of GDP. PERCENTAGE OF BUDGET: The 1998 defense budget represented 2.9 percent of the total CY 1998 budget. TRENDS IN REAL TERMS: The CY 1998 defense budget represented an increase in real terms of 1.32 percent over CY 1997, however, when adjusted for inflation actually represented a decrease of 12 percent. ROLE OF THE ARMED FORCES SIZE OF THE ARMED FORCES: See classified annex. COMMENTS ON ITS POLITICAL ROLE: See classified annex. CAN CIVILIAN AUTHORITIES APPOINT AND REMOVE MILITARY OFFICERS? At present, the president has no constitutional authority to appoint, promote, or remove military officers. Under the constitution, the Congress must approve the selection of the CINC and all promotions above the rank of major. In practice, the CINC has been selected by a collegium of senior officers, and rubber stamped by the Congress (as is the promotion list). However, once the approved constitutional military reforms are ratified in January 1999, the president will have the power (through the minister of defense) to appoint, promote, and remove officers. REDUCING MILITARY SPENDING FEASIBILITY OF REDUCING MILITARY SPENDING: In real terms, military spending has fallen over the last several years, and is likely to continue to be reduced following the implementation of the constitutional reforms. U.S. EFFORTS TO ENCOURAGE REDUCED MILITARY SPENDING: See classified annex. COUNTRY EFFORTS TO REDUCE MILITARY SPENDING: The GOH has recognized the requirement for greater defense austerity, and has reduced the military budget in real terms over the last several years. HAS THE COUNTRY PROVIDED ACCURATE MILITARY SPENDING DATA TO RELEVANT INTERNATIONAL ORGANIZATIONS AND ARMS TRANSFER DATA TO THE UN REGISTER OF CONVENTIONAL ARMS? Military spending data has been limited to reporting the budget, however, with the transition to civilian control, military spending should become much more transparent. Honduras has never submitted a standardized MILEX report to the UN. In 1998, the GOH reported "nil" for the seven categories of the UN Register of Conventional Arms. Honduras did submit reports to the UN Register in 1996 and 1997, but has not submitted a report yet for 1998. HAS THE COUNTRY PARTICIPATED IN REGIONAL TALKS TO REDUCE MILITARY SPENDING? Honduras continues to participate in the Central American Security Commission (CASC), whose principal function is to implement the 1995 Central American Security Treaty. Honduras has also been involved in both bilateral and multilateral talks with her neighbors, attempting to find ways of consolidating regional security responsibilities and coordinating missions (such as humanitarian) among all the Central American nations. ASSESSMENT OF MILITARY BUDGET ACCURACY IS THE MILITARY BUDGET ACCURATE AND COMPLETE? See classified annex. TO WHAT DEGREE IS THE MILITARY BUDGET TRANSPARENT? As mentioned above, the military budget is not transparent, and there is no line-by-line accounting provided by the military to account for its expenditures. Congress approves a lump-sum budget for the military, which neither reports to the president nor to the Congress how the funds are actually spent. Once the constitutional military reforms are ratified in January 1999 and the civilian-run Ministry of Defense assumes control of the military budget, general transparency and oversight should improve dramatically.[End of section]