INTERNATIONAL Monetary Fund statistics show military spending in the world, excluding the countries of the former Soviet Union, fell from 3.9 per cent of global gross domestic product (GDP) in 1986 to 3.1 per cent in 1992. The fund predicts a further decline to 2.3 per cent of global GDP by 1998, with an especially sharp drop of 40 per cent in US military expenditure.

The IMF research shows such spending cuts initially reduce economic growth, but big gains accrue in the long term to the entire global economy.