COVER STORY

The bomb and the economy

The nuclear weapons programme, which envisages the spending of staggering amounts of resources on it even as developmental and social spending is being cut back, is a devastating reminder of the misplaced priorities of the BJP-led Government.

JAYATI GHOSH

IT is an anniversary that would be best forgotten, if only the consequences were not so unnervingly unforgettable. Last year, when the Bharatiya Janata Party-led Government desecrated the day that marked the birth of Gautama Buddha by choosing to explode a series of nuclear devices at Pokhran, it did more than display an alarming and juvenile machismo. It effectively destabilised security in the whole Asian zone and instigated a fresh nuclear arms race which the people of the region simply cannot afford.

Because peace and security issues have dominated the subsequent discussion, the second aspect, that of the affordability of a nuclear programme, has not been adequately questioned. Indeed, the Indian political establishment has always managed to keep such issues of costs and necessity of defence expenditure outside the realm of democratic debate, by citing the need for secrecy and the ordinary citizen's lack of knowledge of the exact needs of defence. In the case of nuclear-based defence systems, these arguments become more compelling because the issues appear so esoteric and complicated. There is also a common perception that nuclear weapons are in fact less expensive than conventional arms, and therefore may even involve a net saving of resources for the economy.

This may be why even economists of the stature of Amartya Sen have suggested that the argument against nuclear weapons cannot be economic in content. Certainly it is the case that the essential critique of nuclear arms must be in terms of strategic and ethical considerations, and also of the lack of democracy inherent in the secrecy surrounding such programmes. But it would be wrong to conclude from this that there are no economic arguments against nuclearisation, or that the people of the country do not have the right to know the full economic opportunity costs of such a programme.

First of all, it is important to remember that nuclear weapons have always been treated as an addition to, rather than a replacement of, conventional weaponry. So it is pointless to argue that they are less expensive, when in fact they add significantly to total military expenditure. Second, it must be borne in mind that while the opacity surrounding such expenditure makes it difficult to calculate, that is no reason for not demanding greater public knowledge of the amounts involved and what they mean in terms of diversion of public resources away from other socially necessary expenditures, and asking for a public debate on whether such spending is desirable.

M. LAKSHMANAN
At a rally in New Delhi in May 1998 to protest against the Pokhran test. The huge amounts needed to maintain a nuclear weapons programme will mean that public resources will be diverted away from other socially necessary expenditures.

IN the Indian case, the task of working out what the nuclear programme has already cost the country, and what it may cost us in the future, is extremely difficult simply because such expenditures are not neatly placed under any one budgetary head, but come under a variety of categories and may even include certain "off-budget" expenditures by public sector units. Therefore, whatever estimates can be put together by independent analysts are necessarily prone to dispute, especially since the veil of secrecy allows officialdom to claim any other set of figures.

Nevertheless, there are some indicators that can be used in terms of the actual and potential future costs of a nuclear weapons programme. The most important of these come from the experience of other countries, most notably the United States for which an extensive independent study on costs, conducted in the Washington-based Brookings Institution, was recently published. This gives an idea of the various kinds of costs associated with any nuclear weapons programme.

It turns out that some cost categories are obvious: the expense of producing the fissile materials used in weapons; designing, testing and producing warheads; designing, building and deploying delivery systems such as missiles, planes and submarines. In fact, usually these are the only costs that are mentioned, especially by the military establishment.

But there are other categories that are less obvious: the expense of building and operating targeting programmes and command and control technologies; building and deploying reconnaissance satellites to locate and monitor "enemy" targets; ensuring security at nuclear facilities. Still other economic cost categories are only recently emerging: the expense of decontaminating and cleaning up radioactive sites; compensating victims of radiation experiments; health care expenses of afflicted workers within the nuclear complex and others involved in production of radioactive material.

THE study conducted for the U.S. ("Atomic Audit: The Costs and Consequences of U.S. Nuclear Weapons Since 1940", Brookings Institution Press, Washington, 1998, by Stephen Schwartz and others) was extremely revealing because it tried to take account of at least some of these direct and indirect costs, even though it could not estimate all such costs. The numbers that emerge are startling even to those who are used to large U.S. defence outlays.

From 1940 through 1996, the U.S. spent nearly $5.5 trillion on nuclear weapons and weapons-related programmes (in constant 1996 dollars). When the average estimated future-year costs for the dismantling of nuclear weapons and the management and disposal of nuclear waste are included, the total rises to more than $5.8 trillion. As Schwartz puts it, "that amount of money, represented as a stack of $1 bills, would stretch more than 459,000 miles, to the moon and nearly back again."

To put these numbers in perspective, they can be compared to other U.S. government expenditures. Nuclear weapons spending over this 56-year period exceeded the combined total federal government spending for all of the following categories: education; training, employment, and social services; agriculture; natural resources and the environment; general science, space, and technology; community and regional development (including disaster relief); law enforcement; and energy production and regulation.

On average, therefore, the study estimates that the U.S. has spent $98 billion a year on nuclear weapons over this entire period. Furthermore, the study emphasises that "this is the conservative estimate, a floor rather than a ceiling."

One important finding of the study relates to the structure of these costs. The major part of the funds was spent not on building the nuclear explosives themselves; in fact, that proved to be relatively inexpensive given the scale of the programme. The vast proportion of money went on the myriad delivery vehicles used to carry them to their targets. These included not only the well-known strategic bombers and ballistic missiles, but also artillery shells, depth charges, and nuclear landmines.

In fact, the cost of deploying offensive delivery systems to those of defensive weapons, along with the costs associated with targeting and controlling the arsenal (that is, building a variety of launch systems and ensuring that not only could they be fired when ordered to do so but, even more important, that they would not go off unless valid launch orders were issued), accounted for 86 per cent of the total expenditure.

Therefore, the U.S. experience shows that the most important element of the nuclear weapons establishment is command, control, communications and intelligence (C3I). This encompasses not only the equipment, personnel, and procedures needed to enable the use of nuclear weapons, but also the equipment and personnel needed to prevent their unauthorised use. In all probability, these costs would form an even greater proportion of costs in countries like India, given the high import-intensity of much of the material requirement for C3I.

ANOTHER major, and as yet inadequately estimated, element of costs comes from the environmental and other considerations resulting from setting up nuclear facilities. In all the nuclear countries, the nuclear weapons establishment created enormous long-term environmental liabilities without significant plans or funds to return the sites of weapons facilities to unrestricted use, if and when they were no longer needed.

In the U.S., the estimated cost of cleaning up these highly contaminated sites ranges from a low of about $200 billion, which would leave a trail of risks for future generations, to well over $500 billion. Even this is only a partial estimate, because not all facilities have been evaluated. The current projection is that in the end, the cost of environmental remediation and waste management will probably exceed the cost of building the nuclear warheads and bombs. And these do not include any provisions for meeting the long-term costs that local communities will face as a result of residual contamination or restrictions on site use, or corrective measures if waste disposal systems fail - as they occasionally have in the past.

THESE are important lessons for countries like India and Pakistan, which are now clearly embarked on programmes that will increase the size of their nuclear stockpiles. The issues are not just of costs but of the basic safety of the population, especially of those unfortunate enough to be directly or indirectly involved in working in such sites, or located near them physically.

The most costly tasks include converting liquid high-level waste to solid form and disposing of it, and managing a large inventory of deteriorating and highly radioactive spent fuel. The cost of the ultimate disposal of high-level waste is unknown. Decontaminating and decommissioning weapons production buildings is an expensive, long-term project. Long after their missions have ended, the structures remain hazardous.

In fact, no amount of money will return the land and water at such weapons sites to their original condition. Once radioactive wastes, which have a long life, are created, there is nothing practical that can be done to make them go away. Isolating them from the human environment for very long periods of time is generally the only feasible solution, but that is rarely possible or even attempted in poor and densely populated countries. In addition, a great deal of the existing soil and groundwater contamination is highly dispersed. Remediation may simply transfer contamination from one location to another.

The resources devoted to nuclear weapons are "sunk" costs. The inability to reuse these resources differs markedly from the ability to convert other military facilities to civilian purposes. And because these decisions are taken without public discussion or accountability, the citizens are never given the choice of whether they would prefer an equivalent amount of spending on, say, schools and health clinics, rather than on a new missile equipped with a nuclear warhead. Further, resources devoted to nuclear weapons impose unavoidable future costs on the economy in terms of clean-up expenditure. As a result, countries that currently spend the most for nuclear weapons will also incur the largest future costs.

Perhaps the largest of all management costs, and one of the hardest to pin down, is the cost of the elaborate secrecy and security measures used to prevent the dissemination of information about nuclear weapons and to protect the weapons themselves. These measures have direct and indirect costs, many of which may be immune to measurement.

In fact, the biggest and most far-reaching social costs are related to this. They are those associated with the excessive secrecy that has reduced public accountability and helped erode trust in government. That is why a nuclear weapons programme is fundamentally anti-democratic both in its nature and in its implications.

Such secrecy also has economic implications. In the case of the U.S. it has been pointed out that it meant much larger expenditures than were warranted. "For classification and political reasons, spending for nuclear weapons has not had enough public scrutiny and it cannot be fairly compared with other national spending. As a result, the levels of accountability demanded of most government programs have been largely absent from nuclear weapons programs... The results have been predictable. The allocation of resources to nuclear weapons has often had no discernible relationship to the levels of threat these weapons were supposed to counter and the costs of deterrence have been considerably and unnecessarily increased" (William J. Weida, "The economic implications of nuclear weapons", June 30, 1998, available at the Website of the U.S. Nuclear Weapons Cost Study Project).

It is now well-known that in the U.S. and the former Soviet Union, the strict secrecy surrounding these programmes increased the potential for officials to place production first, to cut corners, to look only at the perceived short-term gains of building nuclear weapons and ignore the very real and very dangerous long-term costs to the environment and to public health. Even the most optimistic of observers would accept that the Indian Government will not be immune to such tendencies either.

Research and development currently accounts for 7.8 per cent of India's military expenditure, a percentage exceeded only by Britain, France, and the U.S. The Government of India's funding of military research and development is extravagant by other measures as well. It constitutes 18 per cent of all government funds spent on science in India, a percentage surpassed only by the U.S., where military research and development comprises 20 per cent of national science efforts. If nuclear and space efforts are added to military research and development, the figure rises to 68 per cent of government science funds.

A study by the Ministry of Defence in 1985 estimated the cost of creating nuclear weapons which could be deployed at Rs.7,000 crores at that time. In terms of the domestic rate of inflation, such an amount would come to around Rs.18,000 crores at current prices. But a substantial part of the expenditure would involve imports, so if the change in rupee value (relative to the U.S. dollar) is taken into account, then this amounts to Rs.24,000 crores. If it is estimated that only around one-third of such expenditure involves imports, then the likely current cost works out to at least Rs.20,000 crores.

But of course, this involves only cost of the weapons per se, which typically accounts for less than 10 per cent of the total cost. The cost of the C3I systems which are absolutely essential to any weaponisation programme would be at least eight times that amount, based on past international experience. And since the import content of such systems is high, that could amount to even more in rupee terms as the rupee depreciates.

Compare these amounts - of Rs.20,000 crores plus for the weapons alone, and another Rs.160,000 crores for the related systems necessary for weaponisation, with the Government of India's total Plan outlay budgeted for the current year, which is only Rs.77,000 crores. Of course, these are stock costs, spread out over several years, but still the point remains. And then consider that these costs do not take into consideration the huge clean-up costs in future, or the likely escalation resulting from a nuclear arms race in the region.

These are staggering amounts of resources potentially being poured into a dubious programme of producing weapons of mass destruction, in conditions of such secrecy that the expenditures planned or already made are simply not known to the public. What is bizarre is that such spending can even be considered while "fiscal austerity" is the strict admonition when it comes to all forms of developmental and social spending.

The nuclear weapons programme is a devastating reminder of the misplaced priorities of the Government. It is now up to social pressure and action to ensure that these priorities are reset.