Military Spending in Guatemala: The Fiscal and Microeconomic Impact: 1969-1995 Thomas Scheetz
III. Some Final Reflections
The information presented in this study allows for some tentative conclusions. First, any country has the right and obligation to defend itself against external enemies, but excessive spending in the provision of this "insurance policy" tends to undermine the balanced development of a country, thus eventually damaging its future ability to defend itself. Government spending on education, health and other public investments contribute to security in the broadest sense of the word. The budget law, if not the most important annual government decision, is that which most clearly reveals the real priorities of the politicians--more than statements and promises to constituents. In this sense, the evolution of the Guatemalan budget reveals an intention to increase military spending to the detriment of social spending in the face of the country's clear social needs. The distribution of spending among sectors shows especially questionable priorities from 1980 to 1985.
Second, no public expenditure can be made without public revenues. Guatemala has an extraordinarily low tax burden, and the weight of military expenditures must be considered in relation to that small government income. While indeed Guatemalan defense spending has been low compared to other countries in the world, nonetheless it places a severe burden on the country's public finances. Moreover, when viewed in a public goods context, whatever Guatemala's tax burden might be, military spending needs to be seen as just one good alongside many others which a government has the obligation to provide to its citizens.
Third, there is a marked inequality in the salaries and benefits received by military personnel with respect to the rest of the public sector. This inequality reveals a bias in the distribution of power in favor of military institutions. This reality is hardly compatible with a democratic regime in which civilian authorities are supreme over the military.
Fourth, decisions regarding the distribution of tasks and resources among state institutions should increasingly focus on achieving a specialization of functions. From an economic perspective the military is only useful for the task of external defense of the nation and not for other missions, which should be carried out by cheaper and more efficient professionals in those areas. If it is not possible to define clearly an external defense mission for the armed forces, they probably have little or no reason to exist.
And finally, military conversion after the 1996 peace accord in Guatemala has to confront strong corporate military-bureaucratic interests. Mere compliance with the peace accord will not guarantee that military expenditures will be subjected to a cost/benefit analysis, nor that the armed forces or military personnel will lose their privileged place in the national budget. To achieve this task, Guatemalan politicians and civil society must guarantee compliance with the spirit, not just the letter, of stipulations of the peace accord regarding fiscal reform and the rationalization of government spending in favor of social spending over military expenditures.
Annex
Sources of the tables:
Table 1: United Nations Development Program, Human Development Report 1997 (Oxford, Oxford University Press, 1997), p. 126 (technical note, table 2.1).
Tables 2, 3, 4, 5 y 7: Dirección Técnica del Presupuesto, Ministerio de Finanzas de Guatemala, Liquidación de Balance Analítico de Saldos, several years; Asociación Guatemalteca de Investigadores de Presupuesto, Cifras Presupuestarias del Gobierno Central de Guatemala, Período 1971-1991; Dirección de Contabilidad del Estado, Ministerio de Finanzas de Guatemala, Cierre del Ejercicio Contable y Liquidación del Presupuesto de Ingresos y Egresos del Estado; Dirección Técnica del Presupuesto, Ministerio de Finanzas de Guatemala, Manual de Planificación y Programación Presupuestaria del Sector Público de Guatemala, 1989. The percentages were calculated by the author based on these sources.
Table 6: Ministerio de Finanzas de Guatemala, Presupuesto Analítico de Sueldos de Personal Permanente y por Contrato al Servicio del Estado. There are no specific data for the Ministry of National Defense. The figure on the number of posts in the Ministry of National Defense for 1995 was taken from the news magazine, "Crónica Semanal," Guatemala City, 22/2/96. The average labor costs per post were calculated by the author based on the sources cited for tables 2, 3, 4, 5 y 7.
The methodological notes on the development of the data base can be obtained from the author (see footnote 1).
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