The following has been sent to Pattaya Mail from Dr. Bharat Juhnjuhnwala,
Delhi India. The Dr. has been writing on international economy for papers
such as the Asian Wall Street Journal and Baltimore Sun. The opinions he
expresses, although thought provoking, are not necessarily those of Pattaya
Mail.
by Dr. Bharat Jhunjhunwala
The consensus in the world community is that CTBT must go through. The
perception is that while it is true that CTBT legitimizes inequality between
nations and it leads to loss of self-esteem of the developing nations, but
that is a fact of life. It is more important to get on with the tasks of
economic development and poverty alleviation than to worry about such
intangibles.
The underlying premise of this view is that economic development is a matter
of resources. Defense expenditures, including those on nuclear weapons, are
‘squandering’ scare resources. Such waste must be avoided. If CTBT helps in
doing so, which indeed it appears to do, then let us sign it and get on with
economic tasks.
If this were true, countries with low defense expenditures should have done
better in economic growth. Is so? No, sir. A comparison of countries with
different levels of defense expenditures gives us an edifying result. it
turns out that countries with high, not low, defense expenditures have done
well. Yet more interestingly, they have done well in poverty alleviation as
well.
Ismail Seregeldin, vice-president of the World Bank, had given a list of
countries incurring high and low defense expenditures in his book Nurturing
Development published last year. The low defense expenditure countries
mentioned by him were Brazil, Costa Rica, Gambia, Ghana, Mexico, and Niger.
According to World Bank data, their average defense expenditures were a mere
2.7 percent of total government spending n 1993. The high defense
expenditure countries mentioned by him were China, Egypt, Ethiopia, Korea,
Malaysia, Oman, Pakistan, Peru, Sri Lanka, and Zimbabwe. Their average
defense expenditures were high at 21.3 percent.
We can compare the growth rates of the two groups of countries to ascertain
whether those countries that have not squandered their resources have
actually achieved higher rates of growth. It turns out that the low defense
expenditures countries had an average negative growth rate of (-) 0.6
percent against (+) 3.2 percent of the high defense expenditure countries.
Impressions aside, the fact is that the countries that have had high defense
expenditures have also had higher rates of growth.
What about equity, though? It turns out that the high defense expenditure
countries have also had more equitable distribution of incomes! The share of
income of the poorest 20 percent of the population in low defense
expenditure countries was 4.3 percent. In the high defense expenditure
countries it was 6.7 percent. In other words, high defense expenditures, for
some strange reason, turn out to be equitous as well.
How could these results be explained? If the same money were to be invested
in power generation or health facilities, certainly the growth should have
been higher. But that has clearly not been the case.
In order to unravel these seemingly contradictory results, we have to
examine the link between defense expenditures and economy, for indeed there
is one. Let us, for a moment, think of defense expenditures as a proxy for
national self-esteem. A people having greater self-esteem are likely to
spend more on defense. They would abhor at the idea of depending upon
another for their own economic growth. But the same self-esteem also leads
to a greater zest for life, a willingness to invest and grow. They are,
therefore, likely to make better use of the limited resources that are left
over.
It is like two farmers. Mr. Self Esteem invests in a fence around his field.
He has less money left for fertilizers. But he uses that less money much
more efficiently. He applies his own mind to decided what crop to grow, what
fertilizer to apply when and how. Mr. Dependence, on the other hand, relies
upon his neighbors for his security. He develops a culture of depending upon
others. He depends upon others for deciding what crops to grow, etc. He does
have more money left over, but he uses it as dictated by others. The result
is that Mr. Self Esteem grows a better crop although he had less resources
left for fertilizer.
There are, therefore, two opposite effects of defense expenditures on
economic growth. Directly, they lay claim on scarce resources and lead to
reduced investment and, possibly, growth. Indirectly, however, they increase
self-esteem and lead to better utilization of the limited resources.
If the World Bank data are to be believed, the increase in growth from
self-esteem is greater than the decrease due to lower availability of
resources. It is for this reason the high defense expenditure countries
obtain higher growth as well as more poverty alleviation.
In order to take a correct position on CTBT, therefore, we have to examine
how it effects self-esteem. The treaty provides that no nation would
henceforth undertake nuclear tests. That means that the five nuclear powers
would be allowed to sit on their nuclear arsenals while other late comers,
or those who have exercised self-restraint will now, will be permanently
deprived of that option. The developing countries would accept that they
will remain perpetually inferior to the five nuclear powers. It is a direct
attack on their self-esteem. and thereby on their growth potential. It is
for this reason that the developing countries must not accept the CTBT.
Unfortunately, the debate on CTBT is being carried out in terms of security.
Whether nuclear weapons do indeed enhance security is indeed doubtful. But
what is not doubtful is that accepting CTBT does lead to a loss of
self-esteem. Therefore, its acceptance will hurt the developing countries.
Of course, there are other questions. Will a nuclear arms race not be
destructive? It appears that a nuclear weapons free world will remain ever
elusive. What might be possible, though, is a treaty banning use of nuclear,
and all other weapons on civilians. Ancient India had a tradition whereby
warring kings did not disturb civilian populations. That might be a possible
alternative to the CTBT.
The conclusion, therefore, is that CTBT is not acceptable because it hurts
the self-esteem of the developing countries and would lead to lower economic
growth by doing so.
Author is an economist and writer.
