|
Ecuador DEFENSE BUDGET
A series of unfavorable economic developments in the second
half of the 1980s, beginning with the decline in oil revenues in
1986 and a devastating earthquake in March 1987, curtailed national
government outlays, including spending on the armed forces. The
precipitous drop in the value of Ecuadorian currency meant an
escalation of the cost of imported weapons, on which the armed
forces almost entirely depended. In September 1988, the new
administration of Rodrigo Borja Cevallos (1988- ) cancelled a
US$106-million contract with Argentina for the purchase of armored
vehicles and other equipment. Even prior to this, other planned
procurements, such as the purchase of planes for an additional
fighter squadron, had to be postponed.
In 1987, the most recent year for which such data were
available in late 1989, the Ecuadorian government reported that
defense expenditures totalled 32.0 billion sucres--equivalent to
US$188 million at the prevailing rate of exchange (for the value of
the
sucre--see Glossary).
The defense budget for 1987 did not
reflect the cut that followed the earthquake. The corresponding
figure for defense in 1986 was 20.4 billion sucres, equivalent to
US$166.2 million.
Although defense expenditures apparently declined after the end
of military rule in 1979, it was difficult to draw conclusions
about trends in defense spending owing to a number of factors,
including variations in the dollar-sucre exchange rate. Analysts
believed that the true cost of defense exceeded the officially
budgeted figures by a considerable amount because of unreported
nonbudgetary spending. The armed forces covered these costs, which
observers believed to have been as high as the official defense
expenditures in some years, through profits from business
enterprises owned by the military and receipts from the sale of
petroleum abroad. A portion of revenues from petroleum production
above a stipulated level was allocated to a special military
account, but the amount involved and the formula by which it was
calculated remained confidential. Low oil production levels and
depressed prices in the late 1980s necessitated a sharp curtailment
of imports of military equipment.
The United States Arms Control and Disarmament Agency (ACDA)
estimated Ecuador's military expenditures at US$250 million in
1987. ACDA noted, however, that this estimate omitted most arms
acquisitions. According to ACDA, annual defense spending had risen
over a ten-year period from US$150 million in 1978. If defense
expenditures for 1978 were converted to 1987 dollars, however, they
would come to US$245 million--nearly equal to the 1987 expenditures
in purchasing power. The lowest levels of defense spending during
the decade were in 1983 and 1984, when military outlays fell below
US$160 million, calculated in 1987 dollars.
According to ACDA's analysis, based on 1987 data, Ecuador's
annual defense expenditures of US$25 per capita were lower than the
average for Latin America as a whole (US$36 per capita), although
well above comparable figures for Brazil and Colombia. The defense
budget of its larger neighbor and rival, Peru, was four times as
great per capita. The number of persons in military service per
1,000 population (4.4 in 1987) almost mirrored the average for
Latin America as a whole, although it was higher than the figure
for Brazil or Colombia and lower than that for Peru. Military
expenditures constituted 15.3 percent of central government
expenditures in 1987 and 2.6 percent of gross national product
(GNP--see Glossary).
These ratios compared to 10.4 percent of
central government expenditures and 2.0 percent of GNP for Latin
American countries as a whole, but were again well beneath the
corresponding figures for Peru.
Data as of 1989
|
