As the Soviet Union collapsed Russia was faced with the task of
converting its military industries to civilian production. Mikhail
Malei, President Yeltsin's then chief adviser on conversion estimated
in 1992 the task would take 15 years and cost 150 billion dollars.
One method Russia has chosen to fund this conversion is international
arm's sales. However this option comes with its own problems not
least that many of Russia's traditional customers like Iraq can
not pay in hard currency. The true benefit of conversion may only
come when a large proportion of Russia's 1500 arm's factories go
bankrupt. This would release the industry's highly skilled personnel
to find employment in other sectors. The physical conversion of
military power to economic power is horrendously expensive and difficult
to achieve.
Iraq is a country that was able to transfer much of its economic
wealth earned largely from oil revenues into building its military
power. However Iraq's attempt to use this military power to further
increase its economic power was a complete diaster. Its invasion
and incorporation of Kuwait were swiftly condemned by the nations
of the world who defeated Iraq and threw its forces out of Kuwait.
Apart from the obvious material loss and infrastructure damage severe
economic sanctions were placed on Iraq. These sanctions continue
to this day and include oil, Iraq's main foreign currency earner.
The result has been a near collapse in the Iraqi economy. Iraq's
blatant use of its military power in an attempt to gain additional
economic power backfired dramatically placing its economy in ruins.
North Korea is another state that has pursued military power at
the expense of economic power. In North Korea's case it has almost
completely failed to convert its military power into economic power.
According to Lee Ki-Tak, an expert on North Korean affairs the North's
development of heavy industry for military purposes has ensured
the agriculture and consumer products industries are virtually non
existent. This lopsided development has forced thousands in the
country to die of starvation. The northern government has also had
to approach its previously sworn enemies, South Korea and the U.S.
for humanitarian aid. North Korea's military build up and subsequent
military power has been of no use in curing the countries economic
woes.
Japan has taken the opposite path since World War Two. Using its
growing economic power to build the second most advanced military
force in the world. Throughout this period Japan has been able to
keep its defence expenditure around or below one percent of gross
national product. In comparison the U.S. spends upwards of six percent
of its G.N.P. on defence and most European countries around three
to four percent. Remarkably during this period Japan has also been
able to increase total defence expenditure by an average of six
percent per year. Hence Japan's increasing economic power has allowed
it to rapidly increase its military power without causing cut backs
in other areas. Japan is now in the enviable position of spending
a larger amount on defence than every other state bar the U.S. with
a relatively smaller drain on its economy.
For years China has maintained the world's largest standing army
but has had relatively little military power. For as the size of
its military has been large the quality and technology of its equipment
has been low. In the last two decades as the expansion of the Chinese
economy has grown pace the government has begun to modernise its
military forces. Modern fighter aircraft, submarines, air-to-air
missiles, ground attack missiles and supersonic anti-ship missiles
are being added to the Chinese military arsenal. These advanced
weapons are costly and China purchasing them would have been unthinkable
before its economic resurgence. China is using its growing economic
power to increase its military power.
While it is possible to convert military power back into economic
power peacefully, the cost is largely prohibitive. Forceful use
of military power to build economic power is extremely risky and
can have counter productive side effects in the form of economic
sanctions. Military power is also extremely difficult to sustain
without corresponding levels of economic power. For it is economic
power that allows military power to be built up in the first place.
Bibliography
Interview with Lee KiTak Business Korea January 1998
Bobrow, Davis 'Eating your cake and having it too: the Japanese
case', in Steve Chan and Alex Mintz (eds) Defense Welfare and Growth.
London Routledge 1992 p. 81-99
Edgar, Alistair and David Haglund 'Japanese Defence Industrialisation',
in Ron Matthews and Keisuke Matsuyama (eds) Japan's Military Renaissance?.
London The MacMillan Press Ltd 1993 p. 137-163
Fisher, Richard 'How America's Friends are Building China's Military
Power' The Heritage Foundation November 5 1997, http://www.heritage.org
Hoadley, Steve 'From Military Conflict to Economic Rivalry' Lecture
13 April 12 2000
Hoadley, Steve 'The Theory of Sovereignty, Power and the Balance
of Power' Lecture 2 March 1 2000
Nelan, Bruce 'The New Russia: The Military' Time Magazine December
7 1992
Papp, Daniel. Contemporary International Relations. Needham Heights,
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Van Voorst, Bruce 'The Ploy that Fell to Earth' Time Magazine August
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