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Star Wars or Earth Wars?

The Revenge of the Sith, the sixth movie in the Star Wars saga, is drawing record crowds and grossing millions by the week. George Lucas, heady with the success of American Graffiti in 1973, conceived the series two years later. It was to be the story of Anakin Skywalker’s rise, fall and ultimate redemption. Since the story was too large for one film, he divided it into two trilogies and decided (for reasons best known to him) to make the second trilogy before the first one.

He offered the science fiction concept to Universal Studios, who had produced American Graffiti. In a decision they would regret badly in the years to come, Universal passed on it because they dismissed the story as “unfathomable and silly.” In fact, every single studio in Hollywood passed on it except for 20th Century Fox.

The first film in the series was released in 1977. By the end of its first theatrical run, it had become the most successful in the history of cinema and turned Lucas into a multi-millionaire. In the decades to come, the Star Wars brand would acquire a cult following equally among the young and the old. Some would be drawn to it because of the lure of space travel. Others would love the stunning special effects that became its hallmark. And many would love its portrayal of war between good and evil. Located in a “galaxy far, far away,” war seemed glorious.

However, it you strip the exotic location and the stunning special effects, the film is a gripping portrayal of the arrogance, anger and hostility that drive people to make war on planet Earth. By not calling it “Earth Wars,” Lucas ensured that millions of people seeking to escape the real wars going on around them would become moviegoers.

Addressing the Asian defense ministers in Singapore earlier this month, an indignant US Defense Secretary Donald Rumsfeld asked why China was increasing its defense spending in consecutive years by double-digit percentages since it faced no immediate threats. He said such high spending rates could destabilize the Asian military balance. One may, of course, ask the same question of Rumsfeld. The only known enemies of the US are non-state actors that hardly justify the type and level of military spending that it is engaged in.

While accounting for only 5 percent of the world’s population, the US accounts for half of global defense spending, according to figures released by the Stockholm International Peace Research Institute. For the first time since the end of the Cold War, global military spending topped a trillion dollars last year. This amounts to 2.6 percent of the world’s gross domestic product and represents an expenditure of $162 for every man, woman and child on the planet.

In addition to spending $500 billion annually on its military, the US has allocated $238 billion to prosecute the global war on terror since 2003. As Jeffrey Sachs of the Earth Institute argues in his new book, “The End Of Poverty,” the US has unfortunately neglected the deeper causes of global instability that lead to terror. Its spending on extremely poor people who live on a daily income of less than a dollar a day is about 3 percent of its defense budget. These people are chronically hungry, ill, and uneducated. They lack basic housing and clothing. Today, there are 1.1 billion such people in the globe, all in danger of being killed by poverty.

Yet a callous world continues to increase military spending. No where is this more evident than in South Asia, where defense spending grew by 14 percent last year, compared to a global average growth rate of 5 percent.

While always arguing that it is not engaged in an arms race with India, Pakistan has just raised its defense spending by 16 percent to $3.8 billion. The saving grace is that in the same budget, the government has announced it will raise infrastructure development spending by almost 35 percent to $4.6 billion. Higher economic growth rates in the 6 to 8 percent range have made it possible to raise spending on both defense and development. However, this should not be taken to mean that there is no trade-off between spending on development and defense. If there is any ironclad law in economics, it is that there is no free lunch.

Peace economist Kanta Marwah and Nobel laureate Lawrence Klein have published an analysis of the impact of defense spending on economic growth, drawing upon data from five Latin American countries: Argentina, Bolivia, Chile, Paraguay and Peru. During the 1970s and 1980s, these countries spent on average 3.3 percent of their GDP on defense, which translated into an annual military expenditure of $7.4 billion (measured in 1990 US dollars). Marwah and Klein quantify the “hidden cost” of defense spending during this period, by assessing how much it lowered the rate of economic growth.

Applying econometric methods to annual data over the 1970-91 time frame, they find that military spending had a negative impact on economic growth in all five countries. The worst affected country was Paraguay and the least affected was Bolivia. To determine the impact of the defense burden, they simulated what would have happened had the burden been reduced to 1 percent of GDP, emulating the spending cap set by the Central American nation of Costa Rica.

Marwah and Klein find that high military spending caused Argentina to lose nearly 2 percentage points in its annual economic growth rate during the 1976-81 period. It was during this time that the generals in Argentina waged a “dirty war” after having overthrown the civilian government of Isabel Peron.

Similarly, Chile lost annually 1 to 1.5 percentage points in its economic growth rate between 1974 to 1988, when the military government of August Pinochet held sway, after having overthrown the government of Salvadore Allende. For the five countries collectively, excessive military spending took off 1.5 percentage points of the annual rate of economic growth.

The findings of this exercise in revisionist history are very revealing and worth pondering over by governments in all developing countries who are seeking a brighter future for their citizens. In particular, they should be of interest to the leaders of South Asia, which is home to a third of the world’s poor.

Pakistan and India need to take the lead in reducing the defense burden on their populations, especially now that their longstanding tensions seem to be dissipating. Capping (and eventually reducing) military spending would be the ultimate confidence building measure on the road to peace.

AHMAD FARUQUI is a member of Economists for Peace and Security and can be reached at faruqui@pacbell.net.

This article was first published in Daily Times, Pakistan.

 

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