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mm, .-4J Vol. III, No. 20 7I a 1 u -iG (202) 659-3800 JEWISH INSTITUTE FOR NATIONAL SECURITY AFFAIRS 1100 Seventeenth St. N.W., Suite 401, Washington, D.C. 20036 £TTEGI April 1983 and past year (1983 and 1982). This is appropriate because many defense programs are funded over several years. For example, a major Naval vessel requires many years to build and while the funds may be appropriated in the first year, expenditures will occur over five or six years. Procurement of aircraft also is accomplished over a period of several years, with both appropriations and expenditures being made annually. The budget is so vast and complex that it is not possible to provide a complete description in this brief article. Instead, the overall rationale behind the budget and some of the major programs being recommended by Defense Secretary Weinberger will be outlined and discussed. markets and overseas resources in order to maintain the strength of the United States... Pursuant to these foreign policy objectives, the U.S. has certain military objectives which are identified in the report. These are: I) To deter military attack on the United States, its allies and other friendly countries, and to deter or counter the use of Soviet military power to coerce or intimidate our friends and allies. 2) In the event of an attack, to deny the enemy its objectives and bring conflict to a rapid end, on terms favorable to U.S. interests; and to maintain the political and territorial integrity of the United States and its allies. The report News Briefs NEW US MISSILE: A new US missile, the HBM, is being developed to increase the effectiveness of the Cobra helicopter against Soviet radar-guided anti-aircraft missiles. Presently, the Cobra is using TOW missiles, which have a response time too long to be effective. The HBM will be aimed and launched in 4 seconds, facing the Soviet IKOS-23-4 antiaircraft guns, which require 10 seconds for launch. The HBM will be relatively inexpensive at $5000 each. It will have a range of 5 kilometers and weigh approximately 2 Kg. Each of the 28 warheads it carries will weigh 2.3 Kg. Produced in three versions, it will be launched both by aircraft and ground vehicles. The airto-ground version will be guided by an infrared system, and the ground launched version wilt be laser-guided and mounted on armored vehicles. NEW ISRAELI VEHICLE RELEASED: Israel Aircraft Industry has announced the production of a new armored fighting vehicle called the Re'em. The vehicle possesses high penetrability and defense measures for the troops inside. The Re'em is the only fourwheeled fighting vehicle used by the Israel Defense Forces and can reach speeds of 90 kmh. The Re'em's major features are its small size and low profile; it carries three machine guns and six fighters. In addition, an RPG and mortar can be affixed to it as well as two antiaircraft 20 mm cannons and a TOW missile launcher. ISRAELI PYTHON-3 MISSILE DISCLOSED: Refa'el (the Israeli Armaments Development Authority) has revealed the existence of a new Israeli manufactured air-to-air missile, the Python-3. The missile has a range of 15 km and it operates by memorizing the location of the target before it is launched. It can be used from all directions against enemy aircraft, in comparison to the older Shafrir missile which could only be fired from the rear. The Python-3 was used in Operation Peace for Galilee when it was successful in downing enemy aircraft. WITH US OR AGAINST US?: A recent analysis of UN voting records has revealed some interesting lessons for the US as to where our friends lie. Israel was the country that sided with the US the most-86.2%o of the time. Among NATO countries, Great Britain voted with the US 80.1070, West Germany 76.6% and France 68.8%7o of the time. Among our "moderate Arab friends" in the Middle East, Egypt cast votes with the US 26.2% of the time, Saudi Arabia a mere 24%7o and Jordan 20.80o. ARABS BUY ISRAELI COOLING INSTRUMENTS: A businessman from Saudi Arabia and one from the Sudan recently signed agreements in Eilat for the purchase of Israeli cooling instruments manufactured by an Eilat company. Despite the lack of diplomatic relations between Israel and these countries, the instruments will be shipped to the businessmen's respective countries for $7.5 million. Iraqi and Libyan representatives have already purchased these instruments through another company abroad with the mediation of foreign sources. The company's owner has met with a businessman from another country in Switzerland to discuss future dealingswith Saudi Arabia and the Sudan. ISRAELI FIELD FORCES COMMAND TO BE ESTABLISHED: Israeli Defense Minister Moshe Arens is planning to establish a field forces command in the IDF which will combine and unite all the ground forces under one body, which will be a change in the IDF's current organization. Mr. Arens has already informed the new Chief of Staff, Moshe Levy, that he will be organizing the command. This is not a new idea, but when it was considered earlier, former Chiefs of Staff Mordechai Gur and Rafael Eytan both rejected it. Now, however, many generals who formerly opposed the command believe that, in view of Operation Peace for Galilee, the field forces command should be established since it will result in great integration and centralization, leading to increased power of the IDF's field units. POSSIBLE DEFENSE PACT BETWEEN LEBANON AND US: According to a Beirut newspaper, AL-ANBA', the Government of Amin Jemayyel is considering asking the United States for a defense pact in the event that an agreement with Israel cannot be reached. The government is apparently considering an agreement of understanding for 2 or 3 years to obtain guarantees for Lebanon's security, if the US cannot assure the withdrawal of all foreign troops. It is also hoped that such a pact will assure Israel of its security on its northern borders. SAM-5s MAY BE DEPLOYED IN GDR: A West German newspaper has reported that the Soviet Union is completing the construction of a site for SA-5 Gammon surface-to-air missiles 10 km south of Rostock, a city in East Germany that is about 90 km east of the inter-German border. The missile is the (continued on page 6) Special Report The 1984 Defense Budget by Leon Sloss Ed Note: Mr. Sloss is a consultant in defense affairs, and a Contributing Editor to our Newsletter. Introduction The Defense Budget for Fiscal Year 1984 requests appropriations from the Congress of S274 billion and projects expenditures of $239 billion. This is the largest peace-time budget in U.S. history, and represents a 30%o increase in appropriations over Fiscal Year 1982. Furthermore, the five year defense program projects further increases in real defense spending (that is after taking account of inflation) through 1988. In that year expenditures are estimated to be $377 billion and new budget authority $425 billion. These are massive figures, difficult for even the experts to comprehend. Not only are the total figures immense, but the budget is composed of literally thousands of programs. Some argue this is far more than we need or can afford. Others contend that even those sums will be inadequate to provide for our security. How is the average citizen to make a judgment? The purpose of this assessment is to provide a general framework for thinking about the adequacy and affordability of our defense budget. In the process we will briefly address and discuss the following questions. I) What is U.S. defense policy? What is this budget attempting to accomplish? 2) What are the threats to U.S. interests that require these outlays? 3) How is the government proposing to deal with these threats? 4) Where is the money going? What are the major programs? 5) What impact will this budget have on the economy? This assessment is based on an examination of the Annual Report to Congress by the Secretary of Defense., The Defense Report is not only a summary of defense programs, it is also a statement of U.S. defense policy and strategy. Furthermore, it covers not only the coming Fiscal Year, which begins on October 1, 1983, but includes projections for five years into the future. These projections are rather general, but there are specific figures for Fiscal Years 1984 and 1985 and for the current ' The Annual Report to the Congress of the Secretary of Defense. U.S. Government Printing Office, February 1983. Principalforeign policy goals are: to preserve ourfreedom...protect the territory of the U.S. and its citizens...foster (a supportive) international order...protect access to foreign markets and overseas resources. The Secretary's annual report to Congress contains: 1) an explicit rationale for the defense programs; 2) a detailed description of these programs for the coming five years; and 3) the summary budget figures reflecting those programs. This year it also discusses the effect of defense spending on the U.S. economy. For those seeking an understanding of our Nation's defense policies and programs, the defense report is "must" reading. The prospective reader should be warned that this is not light entertainment, but it is highly informative. Defense Policy-The Rationale for notes that this capacity to deny also contributes to deterrence. 3) To promote meaningful and verifiable mutual reductions in nuclear and conventional forces through negotiations.. .and to discourage further proliferation of nuclear weapons. 4) To inhibit further expansion of Soviet control and military presence and to induce the Soviet Union to withdraw from those countries, such as Afghanistan, where it has imposed and maintains its presence and control by force of arms. 5) To foster a reduction in the Soviet Union's overall capacity to sustain a military buildup by preventing, in concert with our allies, the flow of militarily significant technologies and materials to the Soviet Union and by refraining from actions that serve to subsidize the Soviet economy. This latter objective has been given renewed emphasis by the Reagan Administration. Threats to U.S. Security Objectives. The report emphasizes the divergent trends in military spending between the U.S. and Soviet Union over the past two decades. The Soviets, according to this report, devote 15.9% of their GNP to defense, while the U.S. spent 5.9% in the 1970's and will be spending 6.5% in 1983. Although the American GNP is (continued on page 3) the Fiscal Year 1984 Budget. The Secretary's report begins with a description of U.S. defense policy. As has been pointed out in previous reports, defense policy is designed to support our foreign policy. This year's report mentions four principal foreign policy goals. These are: I) To preserve our freedom, our political identity, and the institutions that are their foundation... 2) To protect the territory of the United States, its citizens, and its vital interests abroad from armed attack... 3) To foster an international order, supportive of the interests of the United States through alliances and coc.j . ative relationships with friendly nations... 4) To protect access to foreign April 1983 Page 2 EDITORIALS NEWSLETTER Editor's Note: Events in Beirut as we went to press preempted our editorial "Half a Mission for the Marines," but the thesis of that piece is relevant to the catastrophe in our Embassy. Our Marines were deployed in Lebanon with the single mission of keeping Israeli forces on their side of an arbitrarydemarcation line. They had no order to halt PLO or other infiltration into their sector. We wrote: Why are our Marines not confronting the (terrorists) now in their sector? If our political leaders have not decided where the threats to Lebanon lie, why are the Marines there? In the present configuration they are prime targets... Thus it is... absurd to focus on incidents between the Marines and the Israelis-everyonegets excited and no one gets hurt. These incidents may prove to some that the Marines are not there on behalf of Israel. But Lebanese, and ultimately US, interests would be better served by facing the real threat. It was not the Marines who were the target but our Embassy, and the results were even more revolting than we had imagined. state as Israel. Hussein (like some Israelis) may have decided that long-term security is based on less territory and fewer hostile residents. Even if a deal could be made with Yasser Arafat, Hussein understands that Arafat controls only a portion of the Palestinian national movement and none of the fundamentalist groups. AU the F-16s and I-Hawks in America couldn't protect Hussein from those enemies. The immediate lesson for the United States is that there are people in the region who cannot be dealt with and who will not help us. We must cast the actors in their proper roles: the Saudis will not help; the Jordanians will not help; Arafat will not help; the Lebanese are of only limited help; and the radicals and fundamentalists, backed by the Soviet Union, will do what they can to destroy us. Israel, and Israel alone, shares our basic strategic perspective. It is only with Israel that the United States can fashion broad outlines of regional policy resulting in mutual benefit. It is with Israel that we must stand, and insist that Arab recognition of the legitimacy of Israel precede any other agenda item (including a settlement freeze). And if recognition is not forthcoming, we must be prepared, with Israel, for a long wait. Pursuing illusory cooperation with those who cannot or will not come forward with an honest negotiating position will produce nothing but failure for the United States. The Jewish Institute is committed to explaining the link between U.S. national security and Israel's security, and assessing what we can and must do to strengthen both. Board of Advisors Senator Rudy Boschwitz Lt. Gen. Devol Brett (Ret.) Paul S. Cutter The Honorable Jack Kemp I.L. Kenen Professor Walter Laqueur Max M. Kampelman Ivan Novick Professor Eugene V. Rostow Edward Sanders Lt. Gen. Eugene Tighe (Ret.) Jacques Torczyner General John Vogt (Ret.) Gordon Zacks Admiral Elmo Zumwalt (Ret.) Board of Directors Saul 1. Stern, President Herbert A. Fierst, Chairman of the Board Elliot H. Cole, Vice President Nathan Golden, Vice President Lyle Ryter, Vice President Seymour S. Abensohn, Treasurer Stephen Rosen, Secretary Stanford Adelstein Rabbi Leon Adler Morris J. Amitay Phillip Aronoff Herschel Auerbach Stanley Baruch Stanley Berenzweig Diane Blumberg Marvin Blumberg William Bryen Clement Caditz Alvin S. Cohen Brant Coopersmith Jerome J. Dick Howard 1. Friedman Norman 1. Gelman Leon Genet Dr. Leon Gerber Douglas Glant Robert Goldmann Carl Henry Harlan Hockenberg 1. Samuel Kaminsky Marvin Klemow Leo Kramer Michael Ledeen Rabbi Shmucl Lefkowitz Richard Levy Bryan Littlefield Robert B. Meyersburg Myron Milder Alfred H. Moses Dr. Herbert Paper Rabbi Stanley Rabinowitz Susan Rolnick Betty Sachs Richard Schifter Marvin Selig Professor Seymour Siegel Cecile Shure Samuel Stroum Dr. George Tievsky Dr. Bruno Weinschel Robert 1. Widder Leonard A. Zax Marc Zell Harriet Zimmerman Time to Change Course The bombing of our Embassy in Beirut is a gruesome reminder that the cauldron of hate and violence that is Lebanon has not been purged of radical elements. But this is just the most dramatic and tragic of many incidents proving that US preoccupation with the Israeli side of the Lebanese problem ignores the far more serious and ultimate threat to Lebanon and to US interests in the Middle East. We are outraged by the violence that has claimed the lives of American civilians and military personnel in the service of their country, and the lives of innocent Lebanese. We commend President Reagan for his firmness in saying that the cowardly acts of terrorists "will not deter us from our goal of peace." but if he fails to make the proper course adjustments now, we will have failed to learn a lesson taught in the blood of our own citizens. The first adjustment must be to disengage the problem of Lebanon from that of the West Bank. Lebanon is far more important to US interests at the moment, and should receive our undivided attention. Our goal should be to reduce the manipulation of that country by the PLO, Syria, Iran and the USSR. The Administration has generally referred to all of the "foreign forces" as equally misplaced occupiers. They should differentiate between those who have spent eight years undermining Lebanon (the PLO, Syria, et. al.) and Israel, which alone has a stake in a central Lebanese government capable of securing its own borders in the future. If we pressure Israel into a precipitous withdrawal, the Syrians and others will have no incentive ever to leave. The pro-Western forces must present a united front toward the pro-Soviet factions. This requires coordination between the US and the parties who have invested heavily in our policies-Israel and Lebanon. Beyond that, the next adjustment should be recognition of the failure of our longstanding policy of waiting for Saudi Arabia to use its leverage with the Palestinians to produce a negotiating partner for peace talks with Israel. The Saudis have not produced and never will. Their money over the years has not bought leverage for the purpose of negotiations; it is blood money to keep the Palestinians from destroying the fragile House of Saud. The PLO spent the money on its revolution and that of the fundamentalists, and today the Saudis have only rapidly diminishing assurances that they are themselves safe. The third adjustment is to stop trying to bribe King Hussein with an American arsenal. It won't work because it doesn't address the King's real concerns: revolution in Jordan and his own assassination. (Uneasy Lies the Head is the revealing title of his autobiography.) And his concerns are valid. While President Reagan was pushing him to negotiate with Israel even without some form of PLO mandate, Issam Sartawi's assassination was a warning that Hussein can neither expect a mandate nor negotiate without one. It was never clear that Hussein wanted the West Bank back in any event. It would be the first step toward the dissolution of the Hashemite Kingdom in favor of a PLO state on both sides of the Jordan River. According to the PLO, Jordan is as much a bastard Perchance to Dream Deterrence and Mutual Assured Destruction (MAD) are unpleasant military doctrines. They presume a fear of nuclear war and a tenuous agreement between adversaries to hold each other hostage. In order for deterrence to work, the enemy must believe you would use the weapons in your arsenal (including the strategies for "limited nuclear war") with the expectation that someone will win. These are uncomfortable thoughts, which have helped give rise to the nuclear freeze movement here and in Europe. "Abandon deterrence," say freeze advocates. "Abandon MAD and limited nuclear wars which no one will win." They are dreamers, living in an illusory world in which the Soviet Union will agree to truly verified arms reduction and abandon its export of ideological and armed terrorism. A world in which we could maintain our Western political and social framework over time even if the Soviets point missiles at Europe and we plan no countermeasure. With all of its psychological and military pitfalls, deterrence has worked for thirty-five years. But because freeze proponents are not in power here or in Europe, they are allowed the luxury of dreaming about the world that might be. Those in power have no such luxury. If the President of the United States envisions a world without the need for assured destruction, or one in which deterrence is based on defensive rather than offensive capability, the skeptics are standing by with a quick splash of cold water. This may be for the best. Perhaps we would be worse off if idealists and dreamers occupied the seats of power. Perhaps we should consider the limitations of technology and decide that we may have exhausted our resources. Perhaps in this particular case, a leakproof ABM system is so far out of our grasp that we shouldn't count on it even for the next century. Perhaps some who opposed the deployment of Pershing Ils in Europe will be so horrified by the idea of beam weapons in space that they will take a second look at practical matters on the ground. If the President accomplished the last, he has done well. Even according to Mr. Reagan, neither he nor many of us will see this ABM system, if it can be developed. Certainly this is not the time to reduce our determination to deploy the Pershing 11, or cancel plans for nuclear and conventional deterrence. The skeptics can take comfort from the possibility that the President's idea is "pie in the sky", to make a pun. Over time, scientists will decide the practicality of this particular endeavor. But there is also a principle at stake: if those in power cannot be permitted to see the forest on occasion, if they cannot try new approaches to the evils that confront us, we will live with those evils for the forseeable future-and beyond. Staff Shoshana Bryen, Executive Director, Managing Editor Frank Hoeber, Contributing Editor Leon Sloss, Contributing Editor April 1983 Page 3 Budget (continued from page 1) more than two times the Soviet, in the area of military investment-weapons system research, development and procurement-they have outspent the U.S. by a factor of two to one for at least the last decade. (A recent CIA study suggests that recent growth in Soviet military spending may have slowed somewhat, but this is a matter of dispute among the experts.) The report also compares defense spending of the U.S. and its allies against that of the Warsaw Pact, pointing out that the Soviet Union and its allies have been outspending the United States and its allies over the past two decades in the vital areas of military research and development and weapon systems procurement. The report also stresses the changing nature of Soviet capabilities as a result of this buildup in forces. Soviet forces are increasingly structured for offensive use and for use beyond their borders. This has made it possible for the Soviet Union to extend its armed strength and political influence more broadly around the world. The Soviet geographic presence has been expanded. The reach of their military forces has been extended. And their potential ability to attack on a variety of fronts has improved markedly. For example, it is noted that the port of Aden in the former British protectorate of South Yemen on the Indian Ocean is now a Soviet base. In Ethiopia, where the U.S. once had military facilities, the Soviets now have forces and bases. In Libya, where the U.S. Air Force once had important facilities, that country is, in effect, a potential forward depot for large amounts of Soviet military equipment. And in Vietnam, the former U.S. air and sea facilities at Cam Ranh Bay are now used to extend the reach of Soviet armed forces into Southeast Asia and the Pacific. The report also notes other threats to international stability that exist quite apart from the Soviet Union. These include the growth of terrorist activities and the global diffusion of technological, industrial and military skills which is creating new military powers around the world. The report suggests that while the facts of growing Soviet strength are clear enough, there is a resistance, both in the U.S. and among our allies, to accept the real meaning of these facts; because to do so is to accept the need for a major sustained response. Secretary Weinberger says, "Confronted as we are by all manner of other real or apparent needs, there is a temptation to argue away even the most overwhelmiug evidence, with misplaced hope that we can continue as usual, putting off or canceling unpopular military necessities, and increasing our spending on more politically popular domestic programs. Instead, the regrettable fact is that, in view of the threats posed to our national security, this course is no longer open to us." I Patriot air-defense missile blasting out of its launcher-container. He states three principles which should guide our strategy: * First, that it is defensive. The Secretary notes that this presents certain problems for U.S. defense planning, because a defensive strategy assumes that our adversaries will have the initiative. * Second, the primary aim of our strategy is to deter aggression. For deterrence to be effective, our forces must demonstrate that they could survive a first strike with sufficient strength to threaten losses that would outweigh any gains a potential adversary might expect from that initial attack. Our threatened response to counter-attack must also be credible; it must be sufficiently plausible so the potential aggressor believes we would carry it out. * Finally, the boundary between peace and aggression must be sharp and clear; it is noted that formal treaties and agreements between the U.S. and its allies serve an important function of clearly defining those limits. The Secretary's report also discusses three instruments for carrying out U.S. defense strategy. These are: I) collective defense, 2) forward deployment, and 3) a flexible force structure that will give us a variety of options. The report stresses the need to build toward long-term improvement in our security posture. This must include increased efforts to prevent the proliferation of nuclear weapon capabilities. Turning to the requirements for conventional forces, the Defense report emphasizes three essential force characteristics. These are: a) Readiness, or the ability to fight today. This requires improvements in training and the quality of personnel, for example. b) Sustainability, or the ability to fight for a period of weeks or even months. Among other things, this requires more stocks of ammunition and spare parts. c) Modernization, or the application of technological developments to the production of the most effective, efficient weapons and equipment. It is noted that all of these force characteristics have been neglected over the past decade, and thus, we do not have the luxury of concentrating on one or another. We need to simultaneously rebuild the capabilities of our conventional forces in all three areas. The report also stresses, more so than in the past, the role that modern technology can play in making conventional forces more effective. In discussing the role of nuclear weapons, the Secretary reemphasizes the need to reduce dependence on nuclear weapons. In building our strategic forces, he stresses the importance of exploiting America's comparative advantages in technology. Weinberger explicitly rejects the concept of assured destruction as the basis for our nuclear strategy on the grounds that such a concept is not credible as a deterrent. There is a discussion of the linkage between strategic and (what are now called) "nonstrategic" forces (rather (continued on page 4) M-X missile U.S. Defense Strategy. In light of these trends, Secretary Weinberger contends that the U.S. must devise a long-term defense strategy that responds to the challenge, and suggests what the main components should be. In this report, more explicitly than ever before, the Secretary of Defense states that we can no longer rely as heavily as we have in the past on nuclear weapons. He does not suggest that nuclear weapons can be eliminated, but that we must attempt to reduce our reliance on them by building greater non-nuclear strength. one of two battleships to be refurbished for the Navy. April 1983 Page 4 Budget (continued from page 3) than "theater nuclear" forces). The report points out that, while the main objective of our nuclear forces is deterrence, we must think about and plan against possible failures of deterrence. To that end, we must plan for flexibility in our nuclear forces and in our response options, so that there will be the possibility of terminating a nuclear conflict and reestablishing deterrence at the lowest possible level of violence. Secretary Weinberger suggests that the past two decades have taught us two central lessons with respect to nuclear policy. First, if our retaliatory threat is to be seen as credible, we must be able-and be seen to have the means-to respond appropriately to a wide range of aggressive action. If our threatened response is perceived as inadequate or contrary to our National interests, it is likely to be judged bluff. Second, deterrence is a dynamic effort, not a static one-in order to continue to deter successfully, our capabilities must change with the evolving threat. The report stresses that the purpose of what are now called "nonstrategic" nuclear forces in Europe also is deterrence, and that they are not there primarily to fight a nuclear war, but to deter both nuclear and conventional attack against our allies and U.S. forces. The report also stresses that nuclear arms control remains an important objective of the United States and points to the important initiatives that the U.S. has taken in the START and INF negotiations. It also repeats the oftstated position of the Administration that if arms control negotiations are to be successful, the U.S. must pursue parallel programs to modernize our nuclear forces in order to persuade the Soviet Union that they truly stand to gain by limiting armaments. Where is the Money Going? In this article, it is impossible to detail the thousands of programs which make up the defense budget. The following brief summary will give some sense of how the Defense Department proposes to spend $274 billion and emphasizes the major weapons programs which will require more than a billion dollars of new funding in Fiscal Year 1984. Many other programs, not mentioned, amount to hundreds of millions. 1. The ground forces. By the end of 1984, the ground forces will be composed of 29 divisions. Nineteen of these divisions will be active (16 Army and 3 Marine), and 10 will constitute reserve components. Consistent with the objective of sustainability mentioned above, the Army plans to increase stocks of ammunition toward a long-term objective of 60 days. Items of Army equipment for which there arc more than a billion dollars in the FY '84 budget include the Ml (Abrams) tank, of which 720 are to be procured in FY 1984; a new attack helicopter (the AH-64); and the Patriot Advanced All-Altitude Air Defense Missile System for which funding of more than a billion dollars is proposed in both FY '84 and FY '85. 2. Naval Forces. Naval forces continue to build toward a target of more than 600 major combatant units. Most of the funding authorization for the 600-ship Navy has already been proposed and approved for prior years. For example, the Fiscal Year 1983 budget included $6.5 billion for two new aircraft carriers. The additional funding requested in Fiscal Year 1984 is less than $100 million for these carriers. The Navy plans envision over 500 major vessels by the end of Fiscal Year 1983. This compares with 479 in 1980. The goal of a 600-ship Navy is expected to be reached by the early 1990's, under the present building program. In addition to the major procurement of carriers authorized last year, the most costly Naval program is the Aegis Cruiser; 3 of these ships are to be initiated in each of the fiscal years 1982 through 1985. The Aegis Cruise, of which 24 are to be in the force by the early 1990's, will substantially increase the air defense fire power of carrier battle groups with a highly sophisticated, modern air defense system. The FY '84 Navy budget also includes more than $2 billion for the initiation of procurement of three additional attack submarines (SSN-688). This is part of a five-year program in which the Navy is requesting the construction of 21 submarines, in addition to the 41 authorized through Fiscal Year 1983. Another major procurement item is amphibious ships. The 1984 budget funds the first new multi-purpose amphibious assault ship, one of three to be procured in the current five-year program. The total five-year program for 1984 sophisticated electronics. Each aircraft costs well over $10 million. The AV-8B light attack aircraft is also budgeted for more than a billion dollars. A major effort is devoted to enhancing electronic warfare and sophisticated means to attack air defenses with new missile systems and electronic jamming capabilities. 4. Rapid Deployment Forces. The budget includes more than $2 billion in FY '84 for the Rapid Deployment Force, a force to be moved rapidly to potential trouble spots such as the Middle East. Some $600 million is specifically related to Southwest Asia. The total Fiscal Year '84-88 five-year program includes $13.5 billion for the Rapid Deployment Force. This will increase the size of the force, improve their support, and enhance strategic mobility. Funds are also programmed to improve command, control, communications and intelligence (C31) support for the Rapid Deployment Force and to assure access to forward facilities. Over the next five years, the forces available for rapid deployment contingency planning will grow. In M-1 Abrams Tank 7> AH-64 Apache attack helicopter, carrying eight Hellfire antitank missiles. through 1988 includes 124 new vessels and 21 conversions. Among the 124 new vessels are five Trident ballistic missile submarines, 21 attack submarines, 14 guided missile cruisers, 3 aircraft carriers and 2 battleship reactivations. 3. Air Force. The tactical air force now consists of 25 active wing equivalents and the equivalent of nearly E Fiscal Year 1984, the force available will consist of 3 and one-third Army divisions, plus their combat service support, and I and one-third Marine amphibious forces, for a total of 4 and two-thirds division equivalents. The Army forces, however, will also continue to simultaneously support NATO commitments. 5. Mobility Forces. A considerable effort is being made to expand and improve both air and sea lift forces.. .the aircraft and vessels that transport troops and supplies. In the FY '84-88 program, airlift capability will be expanded with additional C-5 and KC-10 aircraft. The latter can operate as either a tanker or an "airlift" aircargo aircraft. Four additional C-5's are proposed for FY '82 at a cost of $1.4 billion and 10 for FY '85, costing $2.4 billion. The KC-10 program provides for 8 new aircraft in FY '84 and 8 more in FY '85 at a cost of $800 million and $700 million respectively. Other elements of the mobility program include the procurement of fast sealift vessels and the prepositioning of additional equipment in Southwest Asia, both at sea and on land bases. 6. Nuclearforces. The FY '84 budget includes $3.4 billion for development and $2.9 billion for procurement of the MX intercontinental missile system. The Trident program includes a budget of $2.5 billion for procurement of one additional Trident submarine, $600 million for 52 Trident-I missiles and $1.5 billion in development funding for the longer-range and more accurate Trident-lI missile. The largestnsingle-ine item in.the budget, $6.2 billion, is for ten B-I strategic bombers. An additional 34 -oFfhese-aifcraTt'fe 'pranned for procurement in 1985 at a cost of $8 billion. The budget incorporates a growing level of funding for research and development on ballistic missile defense; $700 million in FY '84 and $1.6 billion in FY '85. Theater nuclear force modernization includes some $400 million in FY '84 for the Pershing-2 medium-range ballistic missile and $600 million for the ground-launched cruise missile, both of which are planned for deployment in Western Europe. 7. Command and Control. As in the last two years, the budget includes very substantial funding for command, con- , 12 Air National Guard and Air Force Reserve Wings. Each wing typically . _ contains three squadrons of 24 aircraft . each. The major objectives of the five- ~ \: ' year program are improvement of the combat readiness and sustainability of K\m7 \\.......: tactical air forces by increasing stocks of weapons, munitions and spare parts, as well as training. Both the active and reserve components of the Air Force and Naval Aviation are to be modernized with F-15, F-16, F-18, and AV-8 tac: tical aircrafts, as well as newer air-to-air and air-to-ground weapons. Other major programs will enhance electronic warfare and air defense suppression capabilities and improve target acquisition, surveillance and reconnaissance capabilities. - A N N\ Major items of procurement in the FY '84 budget include more than $2 billion each for the F-15 and F-16 aircraft for the Air Force; and over $1 billion for the F-14 aircraft, and more than $2.5 billion for the F-18 aircraft for the Navy. These are all high performance tactical fighter aircraft of advanced design and employing Improved Hawk air-defense missile fired from a wheeled launcher. April 1983 Page 5 Egyptian Agriculture/U.S.Aid By Yakov Ravid Editor's Note: In assessing the utility of US Foreign Aid, it is important to understand the result of agricultural and economic aid, as well as that of military aid. In the case of Egypt, the question arises as to whether the agricultural sector is able to absorb all of the money the US allocates, and how such aid might be better directed. Recognition by Egyptian officials that agricultural production was not keeping pace with demand led to an agreement between President Mubarak and President Reagan in February, 1982, under which a special American mission would examine strategies for accelerating agricultural development in Egypt. The mission, headed by Dr. E.T. York of the State University of Florida, arrived in Cairo on I March 1982 and remained until 15 April 1982. Its primary objective was to provide a comprehensive assessment of the realistic potential for significantly increasing production in the Egyptian agricultural sector, and to review Egypt's ability to overcome many of the problems currently constraining production. The York Report concluded that there is potential for expansion, and the gap between production and consumption of food commodities could be reduced. There is also potential for expansion into export markets for those commodities in which Egypt enjoys a comparative advantage. However, the Report further concluded that the program of increasing Egyptian agricultural production is unlikely to succeed unless the Egyptian government lowers food subsidies and raises food prices as incentives for farmers. The US has been unwilling to press the Egyptian government for such policy changes, and the Egyptians, for their part, have little incentive to take the politically unpopular step of raising prices and cutting subsidies when large amounts of US aid appear guaranteed regardless of development results. Finally, according to the York Report, aside from the virtual guarantee of US aid, there are many constraints upon expansion in the Egyptian agricultural sector. The Report grouped these into categories of policy, resources, technology and institutions, each of which will be dealt with below. The Current Situation Egypt is becoming increasingly reliant upon food imports to meet its food demands, and upon foreign assistance to finance these imports. Per capita consumption of many agricultural commodities has increased significantly since 1974, due to factors including a high rate of population growth, a shift in population from rural to urban areas, increasing income and substantial government subsidies for food. Selfsufficiency in food production fell from 94.507% in 1960 to 53.6°70 in 1980. While the value of Egypt's agricultural imports is growing, the value of its three most lucrative exports-cotton, rice and oranges-declined over the last decade. In 1981, the value of agricultural imports exceeded exports by some S3 billion. In view of the current food deficit, the rapidly increasing per capita consumption of food and the rapid increase in the number of consumers of food, the Egyptian administration has become concerned whether Egypt could sufficiently marshal its resources to meet its food needs during the next decade. Failure to implement programs aimed at reducing the rapidly widening food gap could have critical economic, social and political consequences. Compared to other sectors, agriculture has shown the slowest growth: increasing only 2%76 annually between 1975 and 1980, while the services and petroleum sectors have grown 8% and 30%0, respectively. Policies The government has maintained prices for many agricultural commodities in Egypt fixed at low levels relative to market prices and international prices. These price regulations agricultural output and input prices to move toward world price levels, creating an incentive for farmers to re-allocate resources between crops and adopt yield-increasing technologies. The government should also give priority to the production of commodities in which Egypt holds a comparative advantage for exports. The possibility exists for exporting at least enough to pay for those items which must be imported. Resources The amount of arable land is a key constraint to increasing agricultural production in Egypt. The agricultural land area is limited mainly to the Nile Valley and Delta, with a few oases and some arable land in Sinai. Given the nature of the soil and other topographical constraints, appropriate soil that could be developed at reasonable cost is extremely scarce. Consequently, the Mission was pessimistic about the shortrange potential for increasing "new of lands." The cultivated area is 3%7o the total land area and the potential for bringing new land into production (horizontal expansion) is not nearly as encouraging as the prospect for increasing productivity on existing cropland (vertical expansion). Egypt's high quality water, enhanced by the deep, rich alluvial soil throughout the Nile River and Delta area, and the optimal climatic conditions of the area, make the potential for further augmenting output on existing land enormous. Since Egypt falls far short of producing enough food to meet human needs, and given the limited availability of arable land, the mission questioned the present level of resources devoted to animal production and the Egyptian desire to expand meat production. The mission suggested priority be given to production of staple food commodities which would generate the most energy and provide the best nutrition for the population. The commission recommended that the Egyptian government: concentrate on producing those commodities in which Egypt has a comparative export advantage, and import the meat and animal products the country wants and can afford; and preserve for agricultural use all arable land by enforcing laws to protect arable land from nonagricultural use. The Report also mentioned that a lack of appropriate agricultural machinery and support services, as well as lack of medium- and long-term credit to farmers, are restraining production. Technology Because of its particular circumstances, Egypt is perhaps more dependent upon improved agricultural technology than many other countries. However, thus far, funds have been primarily for infrastructure improvements (including the Aswan Dam, irrigation canals and drainage facilities) while at the farm level relatively little investment in new technology has occurred. The mission indicated that application of appropriate technology and suitable management could increase long-range production potential as much as 20007o. Therefore, they recommended strong technical agricultural research and extension programs specifically tailored to Egyptian conditions. Institutions and Organizations The mission found that the institutions and organizations related to the agricultural sector are extremely complex. Four Ministries are directly involved in various aspects of food production which result in overlapping duties and (continued on page 6) (Increases are) unlikely to succeed unless the...government lowers food subsidies and raises prices. have been a serious disincentive for farmers to increase production in regulated commodities. The limited profitability of farming has discouraged farmers from saving or investing in their fields. The York mission recommended that the Egyptian government permit trol, communications and intelligence (C31). This includes systems for strategic and non-strategic nuclear force management, theater and tactical force management, electronic warfare and command-con trol-com mu nications countermeasures, defense-wide information and communications systems and intelligence programs. The total funding for such programs in FY '84 is J31.5 billion. This includes funding for a new satellite communications system, the E-3A airborne warning and control aircraft, a new "ground-wave" communications network for the National Command Authority, an "extremely low frequency" (ELF) network for submarine communications, and a multitude of other systems. 8. Mobilization. The report notes the great importance this administration places on the capability of the U.S. to mobilize its vast resources promptly and effectively. Funds are included for the expansion of mobilization planning and exercises to support the requirement for increased readiness. The Impact of the Defense Budget on the U.S. Economy Finally, in setting the framework within which U.S. defense programs must be considered, the report discusses the defense budget in relationship to the total Federal budget and the U.S. economy. As previously noted, the Administration is requesting S274 billion in budget authority for Fiscal Year 1984 as compared with $240 billion in 1983. This represents an increase of more than 10 percent in current dollars, and slightly under 10 percent in constant FY 1984 dollars. In terms of budget outlays, which have the most immediate impact on the economy, the FY '84 budget amounts to $238 billion, as compared to $209 billion in FY '83 and S183 billion in FY '82. Clearly, the trends are sharply upward. Nevertheless, the overall impact of the defense bulge±Uon the economy has changed only modestly. For example, the DOD budget will represent 26 percent of the total Federal budget in T9831 as conpared with -2 percent in 1980. It will represent 6.5 percent of the tfLctal Gross National Product as compared with 5.2 percent in 1980. Perhaps most significantly, wh li the defense budget does increase as a percent of the Gross National Product, so does the non-defense budget-from 17.3 percent in FY 1980, to 18.9 percent in FY 1982. Thus, the total Federal budget is increasing from 22 percent of GNP in FY 1980, to 25 percent in FY 1983, the highest level in more than three decades. What Does It All Add Up To? The defense budget is large and growing. But the defense effort of our principal adversary, the Soviet Union, is growing more rapidly, and has been for at least the past two decades. Furthermore, it is apparent that the Soviet Union is flexing its newly-found muscle to influence and coerce others, including allies and friends of the U.S. Historically, democracies tend to relax their defense efforts when there is no war. The United States has done this. Now we are paying the price of attempting to catch up. Few doubt that catching up is necessary. The present effort began in the Carter Administration, and is being continued by the Reagan Administration. The main debate-and clearly one is forming-is not basically about whether such an effort is necessary for our security. It is more over how fast this effort can progress and is symbolized by a few specific, highly-visible, controversial weapons systems-e.g., large carriers, the MX missile a~nTdtncsr-J bomber. The d-R41-is ifso about the degree of reliance we wish to place on nuclear weapons in our overall security policy and the extent of our overseas commitments. However, if we wish to reduce reliance on nuclear weapons, surely we must do even more to strengthen non-nuclear forces, already stretched thin abroad, or we must cut back on our overseas commitments. Withdrawing from some of these commitments is clearly an option, but would the U.S. feel more secure without our major allies? Would the defense of the nation actually prove less expensive in the long-run if we retreat to a Fortress America? Is it possible to withdraw or reduce commitments selectively-e.g., from Asia or Europe, without there being real pressures to fall back from other commitments-e.g., in the Middle East? Certainly, it should be possible to find economies in a budget of almost $300 billion. Such savings should be sought vigorously. But experience shows that major savings result only if major programs are cut. Can we afford the cost? A nation as large and wealthy as the United States must be able to allocate 6 or 7%7o its of GNP to its own defense, if a small state such as Israel spends almost 50° %of-its GNP for ;hispurpose. It depends n whether we believe the threat to our mmmw"o F-16XL security to be real. In a very recent publication the Defense Department details the Soviet threat, which is evidenced by a relentless and well-financed military build-up which has proceeded for twenty years. All arms of the Soviet defense forces are being modernized. The accumulation of military power clearly is a top-priority Soviet objective. That power is being used today to support wars of liberation (as in Afghanistan), and to threaten, more subtly, free nations around the globe. If we, as a nation, ignore this very clear challenge, it will be at our peril. April 1983 Page 6 Egypt (continued from page 5) conflicting policies. The Report suggested that if the agricultural sector is to meet future goals in production, a holistic framework for planning and executing national programs is necessary. A broad array of efficient agriculturerelated businesses and industries is also needed. At present, established public sector groups do not provide the assistance required, while the general economic climate and many government policies discourage private sector investment. The Report recommended substantial efforts to encourage development of appropriate businesses and industries to bring about and sustain growth. The marketing of agricultural products in Egypt presents a generally bleak picture. Large quantities of food are never consumed because of spoilage and other losses. Markets and processing facilities are inefficient. As a result, the quality of food is frequently poor when it reaches consumers. More competition is needed through encouragement of cooperative and private sector marketing while government involvement is reduced. The universities are awarding large numbers of degrees in agriculture. However, many students receive little laboratory or field training, and labs are generally overcrowded and poorly equipped. Many more agricultural graduates than can be effectively used are now employed within the government. The York Report suggests that under present circumstances it would be better to provide an improved university education for fewer students in agriculture than to try to accommodate the number currently enrolled. Conclusion The York Commission concluded that the potential exists to reduce the production/consumption gap to manageable levels during the next two decades only if the Egyptian government is prepared to make extensive changes in agricultural policy. Increasing production will not be sufficient. It is imperative that the Egyptian government initiate immediate actions aimed at reducing the rapidly growing demand for agricultural commodities, which it has thus far encouraged with extensive government subsidies. A second stage in reducing increased demand for agricultural products, according to the Commission Report, is the establishment of effective programs for family planning to reduce the rate of population growth. News Briefs (continued from page 1) Soviet Union's primary high-altitude air defense weapon; it was recently deployed in Syria, the first time it was deployed outside Soviet territory. According to Western experts, the Gammon has a range of 250 km and is effective up to 95,000 feet. An SA-5 battery in East Germany could provide the Soviets with air dominance over southern Sweden, the entire western Baltic, most of Denmark and northern West Germany. SPAIN RULES OUT EARLY NATO WITHDRAWAL: Spanish Prime Minister Felipe Gonzalez has promised not to hold an early popular referendum on Spain's continued membership in NATO because of the state of tension between the West and the Soviet bloc. During his tenure as an opposition leader and during his campaign for the premiership, Gonzalez criticized the former government's decision to join NATO. However, last December, he did freeze negotiations dealing with Spain's role in the alliance's military command strucTbre. He is also standing firm on his refusal to let any NATO missiles be deployed in Spain, but says that he will not take sides over deployment in other Alliance countries. KHADDAFI HAS NEW ANTISHIP WEAPONS: Muammar Khaddafi, the ruler of Libya, has apparently acquired an improved version of the doublebarrelled Soviet Styx anti-ship missile launchers. The missiles have a range of 50 to 60 miles and will have the capability of attacking any American warships that enter the Gulf of Sidra. Khaddafi is also trying to purchase French Otomat antiship misfiles that have a range of 100 miles. US analysts have observed that a Soviet command, control and communication ship has been stationed near the missile launchers for two months. GERMAN FISHERMAN HOOKS SOVIET SUB: A West German fisherman, trawling in the Baltic, radioed to the Danish Navy when a Soviet or Polish whiskey-class submarine became entangled in his nets. The situation became more involved when the trawler was surrounded by Warsaw Pact warships on maneuvers in the area. A Danish helicopter was sent to the scene, but the submarine's crew disengaged themselves from the nets without further incident. BELGIUM CANCELS PURCHASE OF PATRIOT: The government of Belgium has informed NATO that because of its high cost, it will not purchase Patriot missiles, which is seen to be NATO's main air defense systems of the late 1980's. The surface-to-air missile will replace low-altitude Hawks which are currently deployed along the East-West divide and the Nike-Hercules system. The Patriot can carry either nuclear or conventional warheads. Because of the change in plans, Belgium's role in NATO's air defense system may be revised and the government is hoping to retrieve some of its Hawk missiles now deployed in West Germany. WHAT THEY ARE SAYING GEORGE SHULTZ (US Secretary of State, commenting on the PLO mandate to represent the Palestinians): "We have a saying in America: 'Use it or lose it!"' AMIN GEMAYEL (President of Lebanon, in his telegram to President Reagan after the bombing of the US Embassy in Beirut): "I am confident that your initiative will continue despite the threats and blackmail. I was severely hit by this criminal act. "The Lebanese people and myself express our deepest condolences to the families of US victims. The cross of peace is the burden of the courageous." (18 April) KING HUSSEIN (concerning his refusal to join President Reagan's peace initiative): "Mr. Arafat assured us he would act to secure the support of the (Palestinian National) Council for the envisaged joint political action, on whose basic elements we agreed, pending their developments in the Palestinian National Council by declaring confederate-union relationship between Jordan and Palestine... "A delegate was sent by the PLO executive committee chairman to Amman, to convey to us new ideas and to propose a new course of action that differed from our agreement and that did not give priority to saving the land, thus sending us back to where we were in October, 1982. "In the light of this, it became evident that we cannot proceed with the course of political action which we had planned together and to which we had agreed in principle and in details, in answer to our historic responsibility to take the opportunities made available by Arab and international initiatives and save our land and people. "...Accordingly, we leave it to the PLO and the Palestinian people to choose the ways and means for the salvation of themselves and their land, and for the realization of their declared aims in the manner they see fit. "We in Jordan, having refused from the beginning to negotiate on behalf of the Palestinians, will neither act separately nor in lieu of anybody in Middle East peace negotiations." (10 April) PRESIDENT REAGAN (concerning the delay of the F-16 sale to Israel): "You must realize that under the law-the law exists now-those weapons must be for defensive purposes. And this is again one of the obstacles presented by the stalemate in Lebanon. While those (Israeli) forces are in the position of occupying another country.. .we are forbidden by law to release those planes.. .and it's as simple as the other forces returning to their own countries and letting Lebanon be Lebanon." (31 March) (concerning King Hussein's statement on the Middle East): "Some radical elements of the PLO have introduced changes in the proposals that have been made and the policy we have been trying to follow with regard to Middle East peace. "Those changes are unacceptable to King Hussein; they're unacceptable to King Fahd; they're unacceptable to me. And I have been in touch with King Fahd and King Hussein and am going to be in touch with other Arab leaders about this. "We feel that the changes that were suggested would impede the efforts we've been making toward negotiated peace in the Middle East, peace for Israel, peace for all of the countries there." (10 April) BUTRUS GHALI (Egyptian Minister of State for Foreign Affairs, concerning the Palestinian-Jordanian talks, before the announcement of King Hussein's decision not to join in negotiations): "We hope that agreement can be reached between the PLO and the Jordanian Government to allow negotiations to begin. We believe that if the negotiations do not proceed now, and if we do not exploit the US Government's willingness to play a part, within the context of the Reagan initiative, then, with the initiation of a US election campaign, the issue might be postponed until 1985...What is desired is a JordanianPalestinian move within the framework of the Reagan initiative despite its negative aspects. Movement in itself constitutes positive action capable of maintaining the dynamics of negotiation and dialogue and preserving international interest in the Palestinian cause." (I April) YASSER ARAFAT (Chairman of the Palestine Liberation Organization, concerning President Reagan's peace initiative): "They speak about settlement plans. Reagan's plan. Last week, before the meeting of the Higher Military Council, one of our friends from the USSR came to me and asked if it was possible to listen to him. We hear many things. I told him: I can give it to you in a few words. Some people wish the PLO would say yes to Reagan's plan so that they can say it was a traitor. Others wish us to say no so that they can say: Thank God you said it rather than me. However, I told him that the revolution's position is firm: What they failed to achieve through war they cannot take from us through peace or maneuvers." (31 March) YITZHAQ SHAMIR (Israeli Foreign Minister, concerning the Israeli position on Major Sa'd Haddad, as reported in the Jerusalem Domestic Service): Major Sa'd Haddad and his forces' stay on Lebanese soil, where they are, is in Israel's interest and.. in the absence of a guarantee on this matter, no agreement will be possible. Maj Sa'd Haddad had for years proved his competence in combatting the terrorists, and Israel has learned how to work on collaboration with him, and has full confidence in him, Minister Shamir added that the Lebanese Government cannot ignore Israel's security needs along its northern border, and must therefore establish cooperation between the Lebanese Army and the IDF in order to prevent the return of the PLO to southern Lebanon. (27 March) _ . . .1 0 * *, c A.c z 0o .s i. E- c No: X - .