ECONOMIC CONVERSION CRUCIAL TO CLAIMING PEACE DIVIDEND

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6:00 P.M. EDT
Saturday, June 16, 1990

ECONOMIC CONVERSION CRUCIAL TO CLAIMING PEACE DIVIDEND

As the Cold War recedes, the world has a unique opportunity to reap sizable peace dividend and to meet pressing social, economic, and environmental needs, according to a new study from Worldwatch Institute.

"To make disarmament a social and economic reward, not a penalty, a planned process of transferring resources from military to civilian purposes, known as economic conversion, is required," said Michael Renner, author of Swords Into Plowshares: Converting to a Peace Economy, and a Senior Researcher at Worldwatch Institute, a Washington, D.C.-based research organization.

Conversion planning entails identifying alternative civilian products, retraining employees, and refashioning production equipment. It also means finding new uses for military bases and personnel.

"Alternative use committees" composed of management and labor representatives from a military-relatod facility could be entrusted with mapping out a conversion strategy ready to be implemented once military contracts are terminated.

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Worldwide, some 16 million people are employed in arms production and almost 30 million in the armed forces, according to the report.

The widespread misconception that military spending makes good economic sense is a major barrier to conversion. Yet, the military pork barrel turns out to be empty for most communities. And military expenditures tend to create fewer jobs than civilian outlays do.

"Spending $1 billion on guided missile production creates about 12,100 jobs," Renner pointed out. "But, spending the same amount on pollution control yields 22,200 jobs and on educational services, 84,700 jobs."

The world has barely begun to consider alternatives to the arms race seriously. But in the wake of decreased East-West tensions, the political climate has become more conducive to conversion.

A decade ago, China decided to slash its military spending by onethird, demobilize 1.2 million troops, and increase its share of military factories' output devoted to the civilian market from 10 to 70 percent.

"The Soviet Union is now following a similar path," reported the author. "Defense spending and arms production are being reduced, troops withdrawn from Eastern Europe, and hundreds of military enterprises slated for conversion."

The top-down Soviet and Chinese approaches contrast sharply with the situation in the West, according to Renner. "No western government so far has pursued an active conversion policy. Instead, conversion demands are bubbling up from a vibrant grassroots movement."

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Much of the impulse has come from worker-initiated alternative use groups. Their product proposals range from broad conceptual ideas to almost blueprint-like plans. In addition, as the military boom has come to an end, local and regional governments have become increasingly concerned about a smooth transition to civilian use.

"Conversion is very much concerned with the kind of civilian economy to emerge," Renner said. "An inherent goal is the production of socially useful goods to satisfy unmet needs in housing, health care, environmental protection, transportation, and education. Producing more cars instead of tanks, for example, would simply exacerbate the environmental crisis. The features embedded in the conversion concept can help smooth the transition to a sustainable society."

Conversion writ large goes beyond the plant level, offering an opportunity to reexamine the fundamental directions in which society is moving. Seen in this wider dimension, conversion is a quest for achieving a greater degree of public accountability and democratic decision making applicable in both the military and civilian domain.

Local conversion campaigns have raised awareness of the adverse impact of military spending. But ultimately, according to the report, the success of grassroots initiatives depends on the passage of comprehensive national legislation that provides a mandatory framework for the transfer of resources from military to civilian applications. The Soviet parliament is currently considering a draft conversion bill, and legislation has been introduced in the United States, Canada, and Italy.

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"Neither unfettered private enterprise nor rigid central planning are likely to provide useful answers to the challenges ahead. To be effective, a conversion policy needs to be coordinated at the national level, yet also be tailored to the specific needs of the individual regions."

If it is to be geared toward socially useful and environmentally benign patterns of production and consumption, a conversion process must encompass imaginative approaches to macro-economic, employment, technology, and infrastructure policies.

"Although the political obstacles to conversion -- the vested
interests
of military bureaucracies and their contractors -- are formidable,"
concluded
Renner, "a coalition for building a peace economy could change the
equation.
The gathering pressure for disarmament suggests strongly that
conversion will
be a topic of growing importance during the nineties."
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