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ARMS
TRADE RESOURCE CENTER
REPORTS
- Press Release For Immediate Release:
April 21, 1999
For further
information:
William D. Hartung,
212-229-5808, ext. 106
or Frida Berrigan,
212-229-5808, ext. 112
The Costs
of NATO Expansion Revisited: From the Costs of Modernization to
the Costs of War
A World Policy
Institute Issue Brief
by William D. Hartung
Executive
Summary
Major Findings
Recommendations
I. Introduction: From the Costs of Expansion
to the Costs of War
II. If I Had a Hammer: The Opportunity Costs
of NATO Enlargement
III. Meanwhile, Back at the Arms Bazaar
Sources
Major
Findings:
Finding 1: Last
year's debate on NATO expansion failed to foresee the alliance's
largest new cost, the operation in Kosovo. Estimates by government
analysts and independent think tanks put the cost of the operation
thus far at over $600 million, but as the Clinton Administration's
recent $6 billion emergency supplemental budget request for Kosovo
suggests, that is only the down payment on what could become a very
expensive proposition. Projections by the Congressional Budget Office
suggest that if a ground war were to be launched in Kosovo involving
50,000 U.S. military personnel, the annualized cost would exceed
$19 billion. This is in line with a rough estimate by Michael O'Hanlon
of the Brookings Institution that a ground war in Kosovo could cost
$10 to $30 billion.
Finding
2: In its enthusiasm for expanding NATO's membership and core
missions, the Clinton Administration has neglected other, more broadly-based
institutions like the United Nations and the 55-member Organization
for Security and Cooperation in Europe (OSCE). As a first step towards
building a more robust capability for international peacekeeping,
the U.S. should pay its back dues to the United Nations, which could
be covered for less than the cost of one of the $2 billion B-2 bombers
that have been put on display over Kosovo. Strengthening the conflict
prevention capabilities of the OSCE would likewise take a small
fraction of the funds currently devoted to the war in Kosovo: the
organization's entire $112 million annual budget is the equivalent
of the cost of a few days of bombing raids on Belgrade. And the
$2 million yearly tab for the OSCE's conflict prevention unit equals
the cost of just two Tomahawk cruise missiles.
Finding
3: Despite the leisurely pace at which new NATO member states
are upgrading their arsenals, U.S. arms makers are still aggressively
marketing their wares to the governments of new and prospective
members of the alliance. Poland has recently put out the word that
it is interested in buying 60 new attack helicopters, a deal that
could ultimately be worth over $1 billion. And Boeing has offered
the Warsaw government a wide-ranging arms package that includes
Hellfire missiles, upgrades of its Soviet-era helicopters, a piece
of the action on the company's new L-159 combat aircraft (produced
with its Czech partner, Aero Vochody), and a dozen or more surplus
F-18 aircraft. A number of U.S. arms makers are putting up $250,000
each to serve on the host committee for this week's NATO 50th
anniversary activities, and these companies will also be out in
force for a 50th anniversary of NATO air show that will
be held in Prague next month. U.S. companies like Boeing, Lockheed
Martin, and United Technologies are putting energy into East and
Central Europe in the hopes of getting the inside track on fighter
purchases by Poland, Hungary and the Czech Republic which will occur
in five to ten years time ? a package deal to sell even a few dozen
fighters to the three new member states could be worth more than
$3 billion.
Finding
4: The U.S. government has stockpiled over $1.5 billion in grants
and subsidized loans that U.S. firms can use to finance arms sales
to new and prospective NATO member states. The biggest commitment
is the Central European Defense Loan fund (CEDL), which was given
over $800 million in lending authority under the Pentagon's Foreign
Military Financing (FMF) loan program before Congress terminated
new FMF lending authority late last year.
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Recommendations
Recommendation 1:
To head off the possibility of costly and ill-considered future
commitments like the current air war in Kosovo, NATO's new strategic
concept should abandon any suggestion that the alliance operate
outside of the European theater, and make an explicit commitment
to seeking the approval of the UN Security Council for any operation
other than the direct defense of the territory of a member state.
Recommendation
2: The Congress should cut subsidies for arms exports to new
and prospective NATO member states, and the Pentagon should terminate
the Defense Export Loan Guarantee (DELG) program. Unless and until
states in the region develop credible plans to invest their own
funds in defense modernization, it makes no sense for the U.S. government
to be stockpiling subsidies for that purpose.
Recommendation
3: The U.S. government should invest time and resources in development
of conflict prevention and peacekeeping capabilities in more broadly-based
organizations like the United Nations and the Organization for Security
and Cooperation in Europe. Critically needed funds could be provided
to these organizations for a fraction of the cost of the current
war in Kosovo.
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I.
Introduction: From the Costs of Expansion to the Costs of War
Prior to last spring's Senate vote to admit Poland, Hungary, and
the Czech Republic into the NATO alliance, there was a lively debate
about the cost of this major new commitment. Governmental cost estimates
for enlarging the alliance ranged from the Pentagon's official estimate
of $1.5 to $2 billion over ten years for "direct enlargement" to
the Congressional Budget Office's (CBO) estimate of as much as $125
billion over thirteen years.
Non-governmental
think tanks made their own cost assessments. Ivan Eland of the Cato
Institute put the total tab at about $70 billion, with the U.S.
share at $7 billion. And the World Policy Institute projected a
worst case, highest cost scenario for NATO growth based on the alliance's
"open door" policy: if NATO went on to add as many as a dozen new
members rather than just the three nations added in the first round
of enlargement, the top end CBO estimate of $125 billion for three
to four members could quadruple to as much as $500 billion over
a thirteen year period, of which the U.S. share could reach one-third
to one-half.
The differing
estimates on NATO expansion were based on different definitions
of what the cost components of enlargement were, and different assessments
of the strategic and political factors influencing total costs.
For example, the Pentagon's estimate explicitly excludes the costs
of modernizing the armed forces of the three new member states,
despite the fact that the World Policy Institute has identified
over $1.5 billion in grants, subsidized loans, and weapons giveaways
which the U.S. government had already committed in order to help
countries prepare for NATO membership. The dueling estimates also
differed on major issues such as how much it would cost to bring
the military infrastructure of new member states up to NATO standards;
the costs of modernizing the weapons inventories of new members
states; and the extent to which NATO members in Western Europe would
need to improve their transport and mobility assets in order to
have a credible capability to reinforce the new members in a military
crisis. None of last year's estimates of the costs of enlarging
NATO addressed the costs of short-term military operations that
might be undertaken by an enlarged NATO, which ? given the current
air war in Kosovo ? may turn out to be the largest category of cost
for the alliance for the foreseeable future.
The cost issue
was one of the few issues to generate significant political opposition
to NATO expansion in the run-up to the spring 1998 ratification
vote in the Senate. But interestingly enough, the wide differences
in the estimated costs of NATO enlargement had only a modest effect
on public opinion. Whether the costs to U.S. taxpayers were going
to be a few hundred million dollars or several hundred billion dollars,
the basic public attitude was the same: a majority of Americans
did not believe that U.S. taxpayers should pick up the tab for helping
new NATO members modernize their armed forces. For example, in an
April 1998 poll commissioned by Business Leaders for Sensible Priorities
and conducted by the Princeton, New Jersey-based firm Opinion Research
Corporation International, 56% of those polled came out against
NATO expansion once they learned that "estimates of the cost of
the first phase of this expansion to U.S. taxpayers range from $400
million to $19 billion." That same month, the Survey Center at the
University of New Hampshire found that 79% of New Hampshire residents
were opposed to NATO expansion once they were told that "estimates
of the costs of NATO expansion to U.S. taxpayers range from $400
million to $250 billion."
During the Senate
debate on NATO expansion last spring, the cost issue was raised
most forcefully by Sen. Tom Harkin (D-IA), who put forward an amendment
to cap the costs of U.S. government subsidies for NATO expansion.
Although Harkin's amendment was defeated by 74 to 26, it helped
give a higher profile to the cost question, which may have contributed
to the relative success of Sen. John Warner's amendment calling
for a three-year moratorium on additional rounds of NATO enlargement
beyond the invitations of Poland, Hungary and the Czech Republic
to join the alliance. Warner's amendment garnered 41 votes, which
was substantially more than the 34 votes (one-third plus one) that
would be needed to block a second round of NATO expansion. Concerns
about costs, alliance cohesion, and the effects of further expansion
on U.S.-Russian relations have all come together to convince the
Clinton Administration to take a go slow approach to new rounds
of NATO enlargement. Prior plans to announce a new round of candidates
at this month's 50th Anniversary of NATO commemoration
in Washington have long since been put on the shelf, with the most
likely timing for another round of expansion (if there is one) now
being pushed off to at least 2001? safely past the year 2000 presidential
elections.
For the foreseeable
future, the most important factor determining public attitudes towards
the U.S. commitment to NATO in general and NATO enlargement in particular
will be the outcome of the current operation in Kosovo. Has NATO
been a positive factor in efforts to stop ethnic cleansing in Kosovo
and rein in the activities of Slobodan Milosevic? Or has the Clinton
Administration's stubborn reliance on using NATO to the exclusion
of other, more broadly-based mechanisms ? such as the United Nations
and the Organization for Security and Cooperation in Europe? done
more harm than good? The public assessment of these questions will
have much to say about whether there will be enthusiasm for additional
rounds of NATO expansion in the wake of the Kosovo crisis, or whether
there will instead be a contentious debate about the costs and purposes
of the NATO alliance and the future U.S. role in it.
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II.
If I Had a Hammer: The Opportunity Costs of NATO Enlargement
When the costs of NATO expansion were being debated last year, officials
within the Clinton Administration and in pro-enlargement think tanks
routinely made the point that expanding NATO would reduce
the costs of defending Europe, not increase them. The logic behind
these assertions was fairly straightforward. Advocates of enlargement
maintained that the new member states feel more secure once they
joined NATO, and would therefore not have to spend as much on their
military forces as they would if they had to "go it alone" in a
"tough neighborhood." Supporters of expansion further suggested
that countries seeking NATO membership would be on their best behavior,
and that as a result they would improve their records on democracy
and human rights and resolve any outstanding ethnic or border disputes
they might have with their neighbors.
Critics of expansion
raised several points in opposition to this rosy view of the impact
of a bigger NATO on security and military spending in East and Central
Europe. Citing NATO member Turkey's 15 year campaign of bombing
and burning villages in its war against Kurdish autonomy in the
southeastern portion of the country, some suggested that NATO membership
might be viewed as a blank check to engage in internal ethnic conflicts
and carry out human rights abuses with relative impunity. Other
analysts suggested that to the extent that expansion created a new
dividing line in Europe, new NATO members might at some future date
drag the alliance into outstanding ethnic and border disputes that
they had with neighboring, non-NATO members.
As was the case
in the assessment of NATO costs, analysis of the impacts of NATO
enlargement on the security situation in East and Central Europe
has also been overshadowed by the war in Kosovo. The relevant question
now with respect to NATO in general and NATO expansion in particular
is whether the intense focus on "updating" NATO and making it relevant
to the new security problems facing Europe and the world has led
to the neglect of other security instruments such as the United
Nations and the Organization for Security and Cooperation in Europe.
A number of advocates
of NATO expansion have suggested that the alliance's choice in the
post-Cold War period is to "expand or die." And others have asserted
that although NATO was originally designed to confront a rival military
alliance, the now defunct Warsaw Pact, that given its superior resources
and clear command structure it is the most useful tool available
to deal with problems like ethnic conflict in the Balkans. But after
witnessing a month of NATO bombing raids in Kosovo, Serbia, and
Montenegro, it seems that the current NATO effort serves as living
proof of an old proverb: if all you have in your tool box are hammers,
all your problems start to look like nails.
Judging from
the performance to date, the most charitable assessment that can
be made of NATO's disastrously counterproductive decision to launch
an air war in an attempt to stop ethnic cleansing on the ground
in Kosovo is that in the face of counter-evidence from their own
diplomats and intelligence sources, the leaders of the alliance
somehow managed to convince themselves of their own rhetoric? that
Slobodan Milosevic would back down after a short period of air strikes
and accept NATO's terms for the future of Kosovo. Several sources
within the U.S. government have even suggested that the timing of
the bombing raids was influenced by the date of the 50th
Anniversary of NATO celebrations in Washington, on the theory that
it would be too embarrassing to let Milosevic thumb his nose at
NATO at what was supposed to be the moment of its greatest triumph.
Add to this the repeated assertions by analysts in government and
the media that NATO's "credibility" is at stake in Kosovo, and one
has to wonder whether in choosing NATO as the main vehicle for resolving
the crisis there, the Clinton Administration has simply chosen the
wrong tool for the job.
The first question
that must be asked about the NATO air war is why the United States
and its NATO allies never sought the authorization of the United
Nations Security Council for what is after all an intervention in
an internal dispute that was occurring within the borders of the
former Yugoslavia. Under traditional interpretations of international
law, a UN mandate is required for military operations for purposes
other than self-defense. And even if one tries to carve out a "humanitarian
exception" to justify the NATO intervention ? on the grounds that
the Milosevic regime is engaged in ethnic cleansing bordering on
genocidal conduct ? one has to question why this humanitarian argument
was not at least discussed within the UN before NATO launched its
air attacks. On a more practical level, doing an end run around
the Security Council for a major operation like Kosovo risks not
only alienating major players like Russia whose assistance may ultimately
be needed to resolve the crisis, but it can also promote hastily-crafted,
ill-conceived tactics that lack the kind of international legitimacy
and steadiness of purpose that a major undertaking of this kind
demands.
When a policy
like the current U.S./NATO air war in Kosovo fails so utterly to
have the desired effect, it's always easier to look back at what
could have been done differently than it is to look forward to what
needs to be done next. Even so, it's hard not to ask whether the
U.S. government's emerging emphasis on the role of the "new NATO"
in dealing with a wide range of new security challenges -- from
ethnic conflict in the Balkans to international terrorism to the
spread of weapons of mass destruction in the Middle East ? has blinded
U.S. officials to the value of other institutions and other approaches
to peacekeeping and conflict prevention.
Prior to the
bombing campaign, the OSCE had roughly 1,500 human rights monitors
in Kosovo attempting both to document and hopefully to prevent the
outbreak of ethnic cleansing in the province. Given its modest $112
million annual budget ? the equivalent in cost of a few days worth
of bombing raids on Belgrade ? the organization had to pass the
hat to raise funds for the mission, which relied in some instances
on untrained volunteers whose qualifications involved little more
than a proficiency in English. And the OSCE's conflict prevention
unit receives only $2 million per year, or the cost of two of the
hundreds of Tomahawk cruise missiles that have been fired by NATO
forces in the current conflict in Kosovo. As Daniel Plesch and Julianne
Smith of the British American Security Information Council have
suggested, a better-funded OSCE could develop specially-trained
"Civilian Intervention Units" that could be put on the ground in
areas at risk of ethnic conflict before the killing starts.
Similarly, if
the United States were to pay its outstanding dues to the United
Nations ? which it could do for less than the cost of just one of
the $2 billion B-2 bombers that have been put on display over Kosovo?
it would be better positioned to press for a more coordinated approach
to UN peacekeeping, with better-funded, better-trained units and
clearer lines of authority between the UN and regional bodies like
the OSCE or the Organization of African Unity which could be delegated
the lead role in peacekeeping missions in their areas.
Whether these
preventive mechanisms could have averted the current crisis in Kosovo
is impossible to say with any certainty. However, it is interesting
to note that last summer, the Clinton Administration ignored a proposal
from its own representative to NATO, Alexander Vershbow, which would
have entailed the development of a joint U.S.-Russian plan to impose
a political settlement in Kosovo that the two nations would have
jointly presented to the United Nations Security Council. Vershbow's
proposal would have involved 30,000 to 60,000 troops to enforce
it. In the midst of White House concerns about the terrorist attacks
of U.S. embassies in Africa and the political risks of a proposal
that might involve sending significant numbers of U.S. troops overseas
in advance of the November 1998 mid-term elections, the Vershbow
proposal was allowed to languish. By the time the Clinton Administration
re-focused its policy apparatus on Kosovo in late 1998 and early
1999, the emphasis had shifted almost exclusively towards using
the threat of NATO air strikes as leverage to get the Miloseic regime
to agree to the terms of the Rambouillet peace agreement. Now, a
month after the bombing campaign first began, there are discussions
of finally doing what should have been done in the first place -
involving Russia and the United Nations in hammering out and policing
a peace agreement for Kosovo.
If we are indeed
going to have a "new NATO," the lesson of Kosovo may be that this
new NATO should use force only to assist a member state in defending
itself against aggression or with a clear mandate from the United
Nations Security Council. And the United States and its NATO allies
should invest in other insitutions, like the OSCE and the UN, that
- because of their broader membership base -- are better positioned
to engage in conflict prevention, peacekeeping, and peace negotiations.
In addition to the human costs associated with the failure of NATO
policy to stop ethnic cleansing in Kosovo, it's also worth looking
at the economic costs of failing to head off this war.
Costs of
the War in Kosovo
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