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Volume 4, Issue #2January 2, 2000

TABLE OF CONTENTS


Getting the Threats and Priorities Straight
Colonel Dan Smith, USA (Ret.), Chief of Research, dsmith@cdi.org

Ever since 1823 and the Monroe Doctrine, America has considered -- and treated -- Latin America as its own backyard. But it was not until the turn of the 20th century that America's declaration was backed by sustained, direct involvement. The stage was set in the Spanish-American War (1898-1899) when America's military forced Spain from Cuba. A few years later, the U.S. supported Panama's independence from Colombia, chiefly as a calculated prelude to building the Panama Canal.

The intervening century did not lessened American interest in nations to our south. As late as 1989 (Operation Just Cause) U.S. military forces compelled a change in Panama's government. The imminent threat of U.S. military action in Haiti in 1993 succeeded in restoring that country's elected president. On December 31, 1999, even as the U.S. relinquished control of the Canal Zone and the waterway to Panama, it still reserved the right under terms of the transfer agreement to reoccupy the Zone to keep the Canal open.

Ever since President Carter agreed in 1977 to return the Canal to Panama, prophets of doom and gloom have predicted dire consequences for U.S. interests and security. The latest "evidence" is contained in a heavily censored, unclassified intelligence assessment of Chinese activities that originated from the U.S. Southern Command in whose area of responsibility Panama falls.

But those who might read this October, 1999 report as evidence of a threat to U.S. security will being drawing the wrong conclusions. The world of intelligence, as I know from my own career in the field, is more often one of raising possibilities rather than probabilities and, at the extreme, of probabilities more often than actualities. Intelligence assessments describe what can go wrong and rarely if ever provide a window on what can go right. In this instance, the assessment notes the presence at each end of the Canal of shipping and cargo handling facilities owned by a Hong Kong businessman with close ties to Beijing's leadership. Its conclusion is that these facilities might provide Beijing with sufficient economic clout to compel Panama, for instance, to withdraw diplomatic recognition of Taiwan.

Even if Beijing had this leverage and chose to try to exercise it, the conclusion that Panama's stance on Taiwan directly affects U.S. national security is a stretch. The U.S. does not recognize Taiwan and has embraced since President Nixon's day the "one China" policy. In fact, the estimate very carefully avoids saying that Chinese activity in Panama and elsewhere in the western hemisphere constitutes an immediate, direct threat to U.S. security or to open access to and safe operation of the Canal. The prospective "threat" possibilities mentioned are so peripheral that many other failures in U.S. export policies and technology controls must occur for these threats to begin to materialize.

One does not need either a crystal ball or an intelligence assessment to grasp the more probable and the actual threats to U.S. security stemming from Latin America. A January 11, 2000 White House fact sheet outlines a five point proposal to assist Colombia's efforts to strengthen its economy and democratic institutions and fight narcotics trafficking. The U.S. will spend $1.6 billion (an increase of almost $1.3 billion above current funding levels) over the next two years training Colombian counter- narcotics battalions, paying for 63 Blackhawk and Huey helicopters, and proving other assistance to special military units, National Police, and the judiciary. And judging from past experience, we may achieve more substantive results from the aid that is directed to fostering democracy and the rule of law, distinctly non-military concerns.

The other imminent threat (also non-military) to the U.S. is less tangible but -- given our high-handed interventionist history in Latin America -- just as critical. We are in danger of losing every bit of good will recently garnered by our relief efforts in the area and, more particularly, the return of the Canal. As part of the Canal treaty, the U.S. was to have cleaned up unexploded ordinance on firing ranges. Numerous reports claim and pictures document that the U.S. has left significant areas uncleared; the U.S. maintains that less than 15 percent -- about 8,000 acres -- remain uncleared, and this because to do so would involve severe environmental damage. Yet other reports suggest that the U.S. started too late to complete the job by December 31 and didn't allocate enough money. But the U.S. says it has complied with the standard specified: to remove hazards to the extent "practicable."

If Southern Command believes that outside (specifically Chinese) influence could eventually pose a threat to U.S. interests in Latin America, it would seem that one way to preclude the growth of such influence is to deal with Latin American nations on the basis of sovereign equality. Even the perception that we are unwilling to carry through with agreements can be enormously damaging, whether the issue is unexploded ordnance or the provision of equipment and non-military support to advance specific U.S. policies. (And the equipment must be usable, which was not the case in previous equipment transfers to Colombia and Mexico.)

Clearly, Southern Command has a responsibility to identify and discuss possibilities. But in receiving these assessments, policy makers have an equally serious responsibility to balance other considerations that lie outside the military ones. In this way, the nation has a better chance of putting threats in perspective and getting priorities straight.


Administration Announces Across-the-Board Spending Cuts
Christopher Hellman, Senior Analyst, chellman@cdi.org

This week the White House announced spending cuts totaling $2.4 billion in the Fiscal Year 2000 budget adopted last October. The reductions, known as "rescissions," are the result of language included by Congress in the final version of the annual spending legislation which called for an across-the-board cut of 0.38% in all discretionary programs. The cuts are necessary to make total FY'00 discretionary spending comply with the caps set by the 1997 Balanced Budget Act. For the Pentagon, which accounts for roughly 50% of all discretionary spending, this means a cut of roughly $1 billion.

Originally, Congress had included a 1% across-the-board cut, applied equally to all programs. The Administration objected, saying that the cuts were too deep, and did not provide adequate safeguards for high priority programs. After negotiations between White House officials and congressional leaders, the cuts were reduced to 0.38%, with each federal department given flexibility to determine which programs to cut, provided that an overall reduction of 0.38% was achieved and that no single program was cut by more than 15%.

In addition to the 15% cap on program cuts, Congress also insisted that the Pentagon's pay and benefit accounts be exempted from the reductions. These provisions were included to ensure that the changes in the military retirement program and the 4.8% military pay raise enacted by Congress were fully funded.

The restrictions on how the across-the-board cuts were implemented have several implications. First, by taking funding for military pay and benefits "off the table," other areas of the Pentagon's budget had to absorb a greater percentage of the reductions to make sure that the Department's overall reduction meet the 0.38% target. In fact, the Operations and Maintenance (O&M) account, which makes up 50% of the remaining Pentagon budget, was hit for $500 million of the proposed $1 billion reductions. And while the White House lists in its press release announcing the rescissions that "Military Recruiting and Readiness" are among those programs "fully protected by the Administration," it is the O&M account that is most closely associated with military readiness and training.

This situation was further aggravated by the 15% cap on reductions for any single program, which made it impossible for the Administration to kill a program. Thus, while the Office of Management and Budget (OMB) indicated that "earmarks" -- specific programs funded by members of Congress and often not requested by the Administration -- were priority targets for cuts, "the law did not permit an entire program to be eliminated in order to count toward the savings necessary for a given department." In fact, OMB estimates that congressional earmarks were generally reduced by 7 percent to 8 percent.

This "salami-slicing" approach may actually end up costing the Pentagon -- and thus taxpayers -- more in the long run. For example, the Administration recommended a 5 percent cut in the $375 million added by Congress last year as the down payment on an LHD-8 amphibious assault ship for the Navy. The $1.5 billion ship is to be built by Ingalls Shipbuilding in Mississippi, Senate Majority Leader Trent Lott's home state. While this cut will save $19 million in FY'00, the ship will still be bought, and delays in the program which result from the funding reduction could well drive up the overall cost of the ship.

The proposed rescissions may well cause some minor difficulties for the military, but the Pentagon is much better positioned to absorb the cuts than other federal agencies. For while Congress reduced the FY'00 appropriation for every other federal funding account -- although certain specific programs were protected -- members added over $7 billion to the Administration's spending request for the Pentagon.


The Plight of Chechen Civilians Turns From Bad to Worse
By Tomas Valasek, Research Analyst, tvalasek@cdi.org

As the nature of the war in Chechnya changes from a conventional war to a guerilla conflict, the Russian military is taking increasingly repressive measures against the civilian population. Because the guerillas derive their support from and hide among the civilian population, Russia will find it difficult to continue its Chechnya campaign without controlling the movement and freedom of the civilian population. The past few days have provided a glimpse of possible future tactics of the Russian forces in Chechnya.

Last week, Russian forces came under attack in three major towns -- Shali, Gudermes, and Argun -- which were previously declared to be under Russian control. "It is not clear where they came from," said General Sergei A. Makarov, the commander of the Eastern Group of Russian Forces in Chechnya, referring to the fighters. "They just popped up among the civilians." In response, the Russian military banned men between the ages of 10 and 60 from traveling to and from Chechnya. The Russian military has already been detaining and searching men for signs that they may have taken part in fighting, such as bruises from rifle recoil, or gunpowder residue. Now the Russian military commander in the Caucasus, Gen. Victor Kazantsev, said that "filtration camps" will be set up to screen Chechen males.

The Chechen fighters, pushed out of most Chechnya except the capital of Grozny (Djohar) and mountains in the south and east, will likely resort to more and more acts of sabotage and isolated attacks on Russian troops. Against a numerically superior enemy, their best chance is inflict casualties on Russian troops that the public in Russia will find unacceptable. If they succeed in provoking Russia into retaliation against the civilian population, such as the latest ban on movement or the killing of 41 civilians in Alkhan-Yurt last month, the still high public support for the war in Russia may dissipate.

Already, the prominent Nezavisimaya Gazeta newspaper lamented that "for the first time this new war recalls the events of 1994-96," referring the first Chechen war which ended in Russian defeat and withdrawal. The daily Segodnya warned that "Chechnya is turning into a minefield for Russian politicians." Acting President Vladimir Putin has staked his reputation on a Russian victory in Chechnya.

The civilian population in Chechnya -- both Chechens and ethnic Russians -- will suffer the most from the latest turn of events. The Russian media reports that the Chechens are using civilians as live shields in Grozny. As the Chechens rely more and more on hit-and-run guerilla tactics, the Russian military is responding by denying civilians the chance to escape the fighting and by detaining males of fighting age. As the Russian march in Chechnya turns into protracted fighting over the urban and mountainous areas, the outlook for ordinary Chechens is bleak indeed.


CDI's "Briefing Room"

New Threats Require New Methods of Fighting -- Retired Army General Patrick Hughes, former head of the Defense Intelligence Agency, says that new kinds of threats will require smaller, more capable military units which can adapt to meet a range of situations. According to Gen. Hughes, "the changing nature of war will mean more non-traditional warfare, war in urban environments, and weapons of mass destruction;" situations for which heavy armored units, large naval groups and thousands of aircraft high-tech aircraft are poorly suited.

Together, at Last -- In a rare show of unity, representatives of all but one of the main Yugoslav opposition parties signed a joint declaration calling for early elections in April. The document demands that the government of Slobodan Milosevic stop "state terrorism" and abolish repressive laws on media and universities. The opposition leaders also agreed to cooperate before, during, and after the elections. Differences within the opposition have so far stymied efforts to capitalize on popular disenchantment in the wake of the Kosovo war and reform the Yugoslav government.

Testing Funds for F-22 Must be Increased -- Philip Coyle, the Pentagon's Director of Operational Test and Evaluation, believes that the current cap on testing funds for the F-22 must be raised to avoid scrimping on testing of the controversial aircraft. Congress has capped the testing phase of the F-22 program at $18.8 billion. "You can be against a cost cap at a certain point in the program,"said Coyle, "but you finally get to a point where you hit up against the ceiling, and [it] causes you to make decisions which are not good for the program."

Boeing to Acquire Hughes? -- Boeing Corporation is reportedly negotiating to acquire the satellite manufacturing operations of Hughes Electronics Corporation, a move that would make Boeing a dominant force in the satellite industry. Hughes currently holds roughly 40% of the commercial satellite industry. Boeing would reportedly pay $4 billion in the deal, which would reduce its dependency on commercial airliner sales, and position it better to compete in the growing international aerospace market.

Pentagon to Purchase C-130Js -- In a move that apparently surprised Air Force officials, the Pentagon announced that they will purchase 24 C-130J cargo aircraft from Lockheed Martin Corp. over the next five years, even though the service had earlier determined that there currently wasn't a requirement or sufficient funding for the aircraft. Deputy Defense Secretary John Hamre said that the decision did not represent a "bailout" of the company, which has suffered some financial setbacks recently, but that it was an effort to avoid costs associated with restarting the production line at a later date. CDI places the value of the deal at almost $1.5 billion.


This week on America's Defense Monitor: "The Cuban Military: An Economic Force"

Cuba's military, once known for "exporting revolution," has undergone a transformation since the end of the Cold War. Its new mission is the fight for Cuba's economic survival. The military is now deeply involved in national development, from hotels to agriculture to business ventures with foreign companies. How will this affect Cuba's future? Join America's Defense Monitor for a behind-the-scenes look at the evolution of one of the world's last communist militaries.

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