Armed Robbery: How the poorly regulated arms trade is paralysing development | Millennium Development Goals | Development Assistance Committee

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The poorly regulated global trade in arms and ammunition weakens the ability and willingness of governments to sustain progress in development. It fuels and exacerbates conflicts and armed violence, diverting resources away from poverty reduction activities. Development gains are lost as communities are paralysed: schools are closed, health systems are strained to breaking point, investment is discouraged, and security is undermined. Through a strong focus on development, the Arms Trade Treaty can help prevent serious impediments to development, consolidate regional initiatives to safeguard development, and strengthen national capacity to become ‘treaty-compliant’. With just weeks to go before diplomats meet at the United Nations, ‘Armed Robbery’ makes the case that a specific criteria on development as part of the Arms Trade Treaty, alongside other criteria on human rights and international humanitarian law, is one of the best ways to ensure that arms sales do not have a negative impact on socio-economic development.
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  OXFAM BRIEFING THE FINAL COUNTDOWN www.oxfam.org   ARMED   ROBBERY   How the poorly regulated arms trade is paralysing development JUNE 2012 Oxfam is a member of     2 Summary ã  The poorly regulated global trade in arms and ammunition weakens the ability of governments to sustain progress in development, both by fuelling and exacerbating conflicts and armed violence, and by diverting resources away from poverty reduction activities. ã  Military expenditure in fragile and conflict-affected countries grew by 15 per cent between 2009 and 2010, while Official Development Assistance (ODA) to these countries grew by only 9 per cent. ã  Irresponsible arms transfers fuel corruption, with knock on effects on development and accountability. All low- and lower middle-income countries which allocated more than 10 per cent of their central government expenditure to the military in 2009 scored poorly in corruption indices. ã  Through a strong focus on development, the Arms Trade Treaty (ATT) can help prevent serious impediments to development, consolidate regional initiatives to safeguard development, and strengthen national capacity to become ‘treaty - compliant’. ã  Existing funding mechanisms are already in place which could help countries become  ATT-compliant. In 2010 alone, 101 countries received development assistance of direct relevance to national implementation of the ATT. THE DEVELOPMENT COSTS OF UNCONTROLLED  ARMS TRANSFERS The irresponsible, excessive proliferation of arms and ammunition fuels and exacerbates conflict and armed violence. This is why arms control initiatives have major implications for the processes of socio-economic development. By implementing social and economic policies, as well as those relating to poverty reduction, development, security sector and arms control, governments can create the necessary environment to access essential services and enable people to make the choices and decisions that affect their daily lives. The poorly regulated trade in arms and ammunition weakens the ability and willingness of governments to create these enabling environments. Development gains are reversed as communities are paralysed; closing schools, placing immense strain on health systems, discouraging investment, and undermining security. The arms trade is big business  –  it is estimated that military spending around the world totalled $1.6 trillion in 2010. 1  Sales to fragile and conflict-affected states 2  accounted for 7 per cent of all arms sales (around $1.7bn) in 2010. 3  In the same year, the global share of GDP for these countries amounted to just 0.7 per cent of the total, and ODA amounted to $27bn. 4  An additional $4.8bn was provided in humanitarian aid that year to these countries.  According to the World Bank, 1.5 billion people live in areas affected by fragility, conflict, or large-scale organised criminal violence, and no low-income fragile or conflict-affected country has yet achieved a single UN Millennium Development Goal (MDG). 5  On average, these states ‘lag 40 to 60 per cent behind other low and middle - income countries in MDG achievement’. 6  The UN estimates that, in addition to current levels of ODA, a further $50  – 70bn is required to meet the MDGs by 2015. 7  It is therefore particularly worrying that military expenditure in fragile and conflict-affected countries grew by 15 per cent between 2009 and 2010 , while ODA to these countries grew by only 9 per cent. 8  The increase in ODA was grossly uneven, with the largest increases   3 concentrated in four countries and 12 countries experiencing reductions in ODA. In some cases, military expenditure was nearly treble that of public expenditure on health or education. It is worth recognising that the growth in military expenditure in these countries has happened despite the global recession. Between 1990 and 2006, Africa lost an estimated cumulative total of $284bn as a result of armed conflict  –  on average $18bn per year. This was nearly the same as the total amount of ODA that the continent received during this time. 9  This has had dire impacts on socio-economic progress. The World Bank estimates that the economic cost of lost production due to conflict ranges from 2 per cent to 3 per cent of GDP. In addition, military spending increases typically by 2.2 per cent during civil wars, 10  drastically reducing the resources available to tackle critical threats such as HIV/AIDS. To put this in context, in 2008 the MDG Africa Steering Group identified an annual requirement of $14bn to scale up ‘effective HIV prevention and universal access to AIDS treatment’ across the continent. 11   Armed violence has shrunk national economies in Africa by a staggering 15 per cent. 12  Countries neighbouring those in conflict are also affected, losing up to 0.7 per cent of their annual GDP for each neighbour involved in civil war. 13  Furthermore, armed violence and conflict place considerable strain on the delivery of public services, which means that governments and public officials are forced to make difficult decisions on spending. In Zambia it costs $10  – 15 to treat a patient with malaria, or to provide antiretroviral therapy and a month’s course of anti -tuberculosis medication in government health centres. 14  At these rates, it would be possible to scale up service delivery to meet the MDG targets on major diseases, given that Zambia’s annual per capita expenditure on health is $48. 15  This investment is comprehensively degraded when hospitals must instead treat patients injured by gunshot wounds or anti-personnel land mines, at a cost of between $100 and $3,000 each. In even relatively stable countries such as Zambia, evidence continues to suggest that paying for the effects of armed violence undermines service delivery. As a result, the benefits of stability and peace are slow to reach the most vulnerable members of society. This is more evident still in fragile or conflict-affected states and in countries that have recently emerged from conflict. This insecurity often creates conditions that drive demand for tools of violence, in turn undermining the rule of law, diminishing security, and deepening poverty and suffering in a vicious cycle. The implications of military expenditure in Eritrea Eritrea’s military continues to be the largest recipient of central government resources. Estimates for 2006 suggest that military expenditure was equivalent to 6.3 per cent of GDP ($163m in absolute figures)  –  the eighth highest share in the world that year. The armed forces accounted for 9.3 per cent of the country’s total labour force, the highest ratio in  Africa by far. Eritrea’s arms imports were equivalent to nearly 35 per cent of total ODA received between 2000 and 2006. This is significant, because ODA to Eritrea accounted for an average of 36 per cent of the country’s gross national income (GNI) in this period The prioritisation of military expenditure has in many ways stifled socio-economic development. For example, expenditure on health in 2011 was a mere 1.5 per cent of GDP and education accounted for only 2 per cent, resulting in a literacy rate of just 58 per cent for those aged above 15. Eritrea remains well behind the rest of Africa in its human development scores and ranks globally at 177 out of 187 countries on the UNDP Human Development Index. It has also scored poorly on transparency and corruption indices like the Transparency International Corruption Perception Index. Sources: CIA World Factbook 2011; OECD DAC (2008), p.41.; UNDP Human Development Index (2011)    4 THE IMPACT OF CORRUPTION AND LACK OF  ACCOUNTABILITY The notoriously secretive nature of the arms trade has allowed corruption to flourish. Many governments continue to be secretive about the details of their defence budgets, and in some cases military expenditure comes from off-budget sources, which have few or no public oversight mechanisms. 16  The unregulated arms trade has also facilitated irresponsible procurement. All low- and lower middle-income countries which allocated more than 10 per cent of central government expenditure to the military in 2009 scored poorly on corruption indices, such as Transparency International’s Corruption Perception Index , that year  . 17  This also held true when extended to include the data most recently available prior to 2009 for the rest of the countries in these two classifications. Without strong, accountable, and transparent governance structures, development processes cannot take root and succeed in transforming lives. In 2005, Transparency International estimated the global cost of corruption in the defence sector to be a minimum of $20bn per year, based on data from the World Bank and SIPRI. 18  This equates to the combined global ODA provided to Iraq, Afghanistan, the DRC, Congo, Pakistan, and Bangladesh in 2008, or the total sum pledged by the G8 in L’Aquila in 2009 to fight world hunger. 19  Corrupt arms deals not only affect the security of the recipient country, but also pose a significant opportunity cost for countries to consider. In 1999, an arms deal between South  Africa and a number of European defence companies triggered numerous allegations of corruption. The initial budget was estimated to be R9.2bn ($1.2bn), but by 2005 this had increased to an estimated R66bn ($9.1bn). 20  To put this into context, by 2008, for every R1 spent by the government of South Africa on providing assistance to South Africans living with  AIDS, an equivalent R7.63 was being spent on financing the arms deal. 21  In a country where the formal unemployment rate is around 30 per cent, the additional finances that were allocated for this deal could have been invested into significant productive and socially beneficial initiatives. 22  In summary, the irresponsible transfers of arms undermine development efforts when: ã  The easy availability of and access to conventional arms and ammunition initiate, prolong, and aggravate armed violence and conflict; ã  Arms transfers affect prospects for peace, and undermine the rule of law and reconciliation efforts in post-conflict environments; ã  Expenditure on arms increases national debt and diverts vital and limited funds away from public services such as education and health care; ã  Expenditure on arms involves or encourages systemic corruption.
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