Wasted ‘Peace Dividend’ Spurs U.N. Agency to Make Sweeping Proposals : Development: It recommends international taxes to aid the Third World.

The main U.N. agency for economic development, despairing over the waste of almost a trillion dollars of “peace dividend,” set down sweeping proposals Wednesday--including an international tax--for expanding assistance to a third of the world in such “abject poverty . . . that words simply fail to describe it.”

The proposals, to be taken up next year at the United Nations’ World Social Summit conference in Copenhagen, form the centerpiece of the U.N. Development Program’s annual report on worldwide human development.

The report, as always, includes the United Nations’ annual rankings of countries on a development index based on wealth, education and health. Canada, which was second in the world last year, now ranks first, followed by Switzerland, Japan (last year’s leader), Sweden and Norway. The United States, sixth-ranking last year, has fallen to eighth.

But the agency report was less concerned with these rankings than with the possibilities of the social summit scheduled for March.

This conference, a pet project of former Chilean President Patricio Aylwin that has won the endorsement of the United Nations, is expected to attract scores of heads of state and government, including President Clinton.

Aylwin insists the summit is needed because the post-Cold War world--while it has largely adopted democracy for its politics and the free market for its economics--has failed, so far, to come up with a philosophy to deal with its social problems.

“There is one golden and, I fear, fleeting opportunity to bring the rich and the poor together, to make the compacts and to forge the partnerships that are needed to achieve sustainable human development in all countries, north and south, and that is the social summit,” James Gustave Speth, administrator of the U.N. agency, told a news conference in Washington.

In the report, largely written by Mahbub ul-Haq, former Pakistani minister of finance, the Development Program concludes that global military spending has declined $935 billion since 1987. “Unfortunately,” the report says, “this peace dividend has not been used to finance the world’s social agenda.”

The agency, the United Nations’ main engine for Third World development, acknowledges there has been considerable improvement in world development in recent years. “While 70% of humanity survived in abysmal human conditions in 1960 . . . only 32% suffered such conditions in 1992,” it states.

But the agency takes little solace in this. “Despite all our technological breakthroughs,” the report goes on, “we still live in a world where a fifth of the developing world’s population goes hungry every night, a quarter lacks access to even a basic necessity like drinking water, and a third lives in a state of abject poverty.”

To deal with these problems, the U.N. agency proposes what it calls “fundamental changes . . . in the present framework of development cooperation.” Some of the most sweeping include:

* “A serious search . . . for new sources of international funding that do not rely entirely on the fluctuating political will of the rich nations.” The report notes some possibilities, such as a global tax on the use of gasoline and other non-renewable energy sources and a small tax on transactions of speculators dealing in foreign exchange. A tax of $1 on every barrel of oil (or its equivalent in coal) would bring in $66 billion a year.

* Compensation by rich countries to poor countries for services such as pollution control that benefit humankind and for damages caused by market barriers such as restrictions on migration of labor.

* Allocation of 20% of the peace dividend in rich countries and 10% in poor countries to a new “global human security fund” that would pay for such projects as controlling drug trafficking, international terrorism and nuclear proliferation. If military spending drops by only 3% worldwide in the next five years, there would be a saving--the peace dividend--of $460 billion more, the report says.

* Creation of an Economic Security Council to deal with issues such as unemployment, poverty and food shortages in the same way the U.N. Security Council deals with threats to peace and security.

The U.N. Development Program report stresses that wealth and human development do not always go hand in hand.

Ecuador and the Congo, for example, each have a per capita gross national product of a little more than $1,000 a year. Yet because of its high life expectancy and literacy rates and its low infant mortality, Ecuador ranks 74th in the worldwide Human Development Index, while the Congo ranks 123rd.

“Much depends on how the fruits of economic growth are shared--particularly on what the poor get--and how much the additional resources are used to support public services, particularly primary health care and basic education,” the report says.

The U.N. Development Program, measuring the health of nations, also discusses the concept it calls human security. Under this concept, countries are in crisis if they measure poorly on indicators of food supply, jobs, human rights, sharing of wealth, ethnic conflict and an overemphasis on military spending. Using these, the report names eight countries in crisis: Afghanistan, Angola, Haiti, Iraq, Mozambique, Myanmar, Sudan and Zaire.

The report expresses disappointment with the continued spending for arms in the Third World, despite the Cold War’s end. In South Asia and sub-Saharan Africa, it says, “armies continued to flourish in the midst of human misery.”

Citing figures over a period from 1988 to 1992, the agency says that the five largest exporters of arms to the Third World were the five permanent members of the Security Council: Russia, the United States, France, China and Britain. The five largest importers of arms in the Third World during this period were: India, Saudi Arabia, Afghanistan, Turkey and Iraq.

The report calls on the World Social Summit to endorse the principle “that no nation should spend more on its military than on the education and health of its people.”

Although much gloom edged the pages of the report, the U.N. agency had positive news as well. A number of countries have managed to increase their standing in the Human Development Index markedly in the last three decades. The countries that increased their development the most were Malaysia, Botswana, South Korea, Thailand, Syria, Turkey, China, Portugal and Iran.

Rich and Poor

The Human Development Index ranks 173 countries based on life expectancy, education and income.

TOP 10

‘94 rank ’93 rank 1. Canada 2. 2. Switzerland 4. 3. Japan 1. 4. Sweden 5. 5. Norway 3. 6. France 8. 7. Australia 7. 8. United States 6. 9. Netherlands 9. 10. Britain 10. BOTTOM 10 164. Guinea-Bissau 164. 165. Somalia 166. 166. Gambia 167. 167. Mali 168. 168. Chad 165. 169. Niger 169. 170. Sierra Leone 172. 171. Afghanistan 171. 172. Burkina Faso 170. 173. Guinea 173.

Source: U.N. Human Development Index