World Bank Disputes Arms Spending Claims

WASHINGTON — The World Bank on Wednesday rejected claims that military spending by Third World countries benefited their economies and led to improved development.

In its Annual Development Report and at a briefing for reporters, bank economists said a growing body of evidence suggested that the opposite was true.

The discussion of military spending is unusual for the World Bank because the international lending agency, at least publicly, has taken the position of not involving itself in issues that deal with a country’s security.

“It is in response to some extent to a theory that has been advanced that military spending is, in fact, desirable in terms of development performance. Our reading of the situation is, that is not the case,” an official said.

In the report, the bank said “evidence increasingly points to high military spending as contributing to fiscal and debt crisis, complicating stabilization and adjustment, and negatively affecting economic growth and development.”

$900 Billion Spent in ’85

Officials said the bank, which has increasingly been making loans designed to bring about economic reform by reducing subsidies and other distortions, does point out to countries that there are economic risks associated with targeting large amounts of money for armaments.

The report estimated that 6% of the world’s total public spending goes for military purposes--more than $900 billion in 1985 alone.

Industrial countries spend by far the most in absolute and per capita terms, while developing countries spend more on the military as a share of their overall economy, the report said.

It said that most of the growth in military spending in recent years, both absolutely and as a share of gross national product, an economic measure, has occurred in the industrial countries.

It said the data excludes the Soviet Union and Eastern Europe, adding that their share is equivalent to the industrial countries and as a share of GNP is significantly higher.

On a regional basis, the report said, Latin America devotes the smallest share--about 1.5%--of GNP to the military.