PRESS CONFERENCE ON MISSILE DEFENCE COSTS

A “layered” or comprehensive missile defence system, such as the one favoured by the United States Government, could cost between $800 billion and $1.2 trillion, far more than the $60 billion estimated during the previous United States administration, according to a new study released at a Headquarters press conference this morning.

The report, entitled “The Full Costs of Ballistic Missile Defence”, was authored by Economists Allied for Arms Reduction and the Center for Arms Control and Non-Proliferation.  Comprehensively examining United States Defense Department and Congressional Budget Office figures, it finds aspects of the proposed system –- containing ground, sea, air and space-based elements -- not reported upon and the cost of those that were analysed seriously understated.  In addition, the report includes the cost of maintaining the system over its lifetime, projected at approximately 35 years.

The Center, established in 1980, is based in the United States and examines government actions, expenditures, policies and laws as they relate to weapons of mass destruction.  The economist’s group is a worldwide professional organization united in the belief that the economic dimensions of wars, civil conflict, armament and violence should be examined, measured, and exposed to scrutiny.  Richard Kaufman, of the group, and Laurence Klein, Nobel Laureate, briefed correspondents, following an earlier presentation to the Secretary-General’s Advisory Board on Disarmament Matters.

Mr. Kaufman told correspondents that the report had reconstructed the land-based figures from the United States Congressional Budget Office, and their $60 billion came to more than $100 billion.  Once operating and support costs were added in, the amount came to $182 billion on the high side.  In addition, the calculations assumed that the United States administration would also build a flexible, sea-based adjunct to the land-based missile defence, at a cost of $95 billion.  Altogether, those two parts came to $277 billion.

If just those two elements cost $277 billion, it didn’t take much of a stretch to reach $1 trillion, he continued.  So, the full cost of missile defence over the life cycle of most of the major systems would range from

$800 billion to approximately $1.2 trillion.  The report analysed every one of the systems of components and explained the methodology used to construct the figures.

Mr. Klein added that the report was not easy reading, but it was worthwhile reading.  He had felt comfortable analysing the system from an economic point of view and its influence on the American public.  Using data from the Congressional Budget Office had given the report a mark of authenticity and authority.  Given the pressures that would be borne by the calculations being discussed today, including the public deficit that would be generated, policy adjustments would have to be made.

In such uncertain times, he said, there had been a great shift in the past two to three years away from an economy that was balanced and then in surplus, at the federal, state and local levels.  Now, everybody was in trouble.  To add

another trillion dollars, which had not yet been factored in, even spread over a number of years, was “a very big order and very difficult to digest”, he said.  It would mean diverting spending from job training, environmental and social assistance programmes, and military spending that was not part of the missile shield.

Apart from the cost, Mr. Kaufman said that the use of weapons of mass destruction was a much greater threat to the United States than the threat of a missile being fired against it, so the pace of development of a ballistic missile defence system should be slowed and the money saved should be used to counter much greater and more immediate priorities.

Moreover, he continued, the ballistic missile defence system was envisaged against the threat that someday the “rogue” nations or those in the “axis of evil” might someday have long-range missiles.  That raised a question about whether the programme was intended to defend against Chinese and Russian missile capabilities.  The administration says no, but once the layered program was in the field and fully deployed “in all its glory” -- from the land, air space, under and over sea, and so forth -- the question was whether it would be perceived by China and Russia as a threat against their deterrent capability. 

In that context, he drew attention to another study being released today entitled “United States Missile Defence, a Russian Perspective”.  It analysed the possible Russian response to the programme as it went forward.  He projected as the most likely Russian response as an increase in its offensive capability to penetrate missile defences and ensure that the deterrent value of its offensive capabilities was not completely negated.

Asked if the report had considered policy implications, Mr. Klein said that, no, it did not change monetary policy or the tax system, but it came to a very important conclusion, namely that taking into account all of the technical details of the programme, another burden would be added to the deficit.  Then, the question would have to be asked, what would be done to close the gap?  Perhaps taxes would have to be raised, with a policy today of trying to lower them, and perhaps total government spending would have to be cut, either non-military spending or military spending that was not part of the missile shield. 

He added that there had been a small-scale version in the 1980s under President Reagan, known as “star wars”.  That was very expensive, but not nearly on the magnitude of the total umbrella being planned today.  Then, there had been a cutback in social services.  The homeless population grew almost overnight and all kinds of “other ugly things”.

Replying to a question about how ballistic missile defence was defined, particularly whether their definition had included America’s support for similar programmes in Israel and other allies, Mr. Kaufman said the administration’s definition included freedom missile defence systems.  Only the Clinton administration tended to differentiate between theatre missile defence and strategic missile defence, which referred to the United States homeland.  That differentiation had now been erased.  So, protection of United States’ forces and allies overseas from long- or medium- or short-range missiles was included in the administration’s progamme.

To a follow-up question about whether the space–based aspect of the programme was still the emphasis as it was under President Reagan, Mr. Kaufman said that, yes, star wars had indeed attracted most of the attention, and there were still space-based components to the current programme.  There was the space-based laser system, for example, which was intended as a boost-phase weapon to attack offensive missiles on the launch pad or shortly after launch.  There was also a space-based kinetic-type of weapon system, which under President Reagan, had been called “brilliant pebbles”.  That was a system of satellites, which housed warheads that could be fired off at various targets.  Those warheads contained nuclear and other types of explosives.  Those were now called kinetic-type weapons because they crashed into their target.

Asked how he costed technologies that did not yet exist, Mr. Kaufman said there were many areas where the technologies were not yet effective, but there were technologies in all areas, effective to varying degrees. 

So, at this stage, he was costing, at about $1 trillion, systems and technologies that did not work? the correspondent asked in a follow-up.  “I couldn’t have said it better myself”, Mr. Kaufman replied.

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