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services 16. As well, when bloated defense budgets cause economic problems in developed countries, nations in the Third World suffer, as many have trade relations with developed countries. Developing countries are dependent on First World nations, due to lack of export diversification such as in commodities; resulting in vulnerability to global price fluctuations 17. Military expenditure places an overwhelming demand on already suffering economies, which results in further non-productivity. Studies prepared for the International Monetary Fund, indicate that reductions in spending result in a 3.7 % increase in the nation?s GNP, a rise in capital stock by 5.3% and an increase in agricultural production by 4.6% 18. Such stabilizations are especially advantageous for Third World nations, as it leads to a favorable investment climate, stimulates long-term trade and increases lending. Further studies for the U.N. predict that if the arms race accelerates past the year 2000, the developing world will lose 11 million jobs, and 4% of its value of non-military products (Appendix A) 19. In developing nations stagflation has risen disproportionately during the eighties and its effects were more severe; the rates are generally 20% to 30% as opposed to 9% to 12% for developed nations 20. Second World nations (Communist countries) are generally more vulnerable to such economic fluctuations, as their defense is a larger part of their GNP 21. In China and the former Soviet Union many basic needs are unmet, due to enormous resources devoted to the arms race. Studies by the United Nations, illustrate that improved living standards due to reduced diversion of resources, result in political restraint, which negate the need for arms 22. Thus, many developing nations have begun to reduce their military expenditure, and focus their resources and efforts on long term economic planning for greater economic growth and productivity 23.

In 1975, a United Nations issued a major economic report concluding that ?the development towards a new international economic order is strongly influenced by the arms race … the economic and social consequences are so detrimental that its continuation is incompatible with the implementation of such an order.24 ? Unfortunately, twenty three years later, this accepted economic generalization has not yet permeated the minds of policy makers, governments and the public. Buoyed by disproved theories of mass unemployment and an eroding industry caused by reduced defense spending; the consequences of competition for precious resources and investment, unemployment, inflation and slow economic growth in the Third World continue to have been well illustrated. The international call for economic conversion from dependence on military industries, in not an issue of an international social conscience or idealism; it is a vital issue of overwhelming economic evidence.

ENDNOTES

1. Gideon, Rosenbluth. Canadian Economy and Disarmament p.45

2. Dolman, Anthony. Disarmament, Development, Environment: Three Worlds in One p.88

3. ibid. p.89

4. Morrison, Philip. The Future of American Defense p.13

5. ibid. p.71

6. Gideon, Rosenbluth. Canadian Economy and Disarmament p

7. Economic and Social Consequences of the Arms Race and of Military Expenditures. p.92.

8. Morrison, Philip. The Future of American Defense p.323

9. World Armaments and Disarmaments Yearbook of the Swedish Government?s Stockholm International Peace Research Institute (SIPRI), p.222

10. ibid, p.98

11. Gideon, Rosenbluth. Canadian Economy and Disarmament p. 456

12. ibid. p.457

13. Morrison, Philip. The Future of American Defense, p.100

14. Economic and Social Consequences of the Arms Race and of Military Expenditures. p.76.

15. Morrison, Philip. The Future of American Defense p.87

16. Blechman, Barry. ?The Use of the Armed Forces as a Political Instrument?.p.12

17. ibid.p.107

18. Gideon, Rosenbluth. Canadian Economy and Disarmament p. 456

19. World Armaments and Disarmaments Yearbook of the Swedish Government?s Stockholm International Peace Research Institute (SIPRI), p.348.

20. Economic and Social Consequences of the Arms Race and of Military Expenditures. p.78

21. ibid, p.166.

22. Dolman, Anthony. Disarmament, Development, Environment: Three Worlds in One p.176

23. Gideon, Rosenbluth. Canadian Economy and Disarmament p.35

24. Dolman, Anthony. Disarmament, Development, Environment: Three Worlds in One p.243



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