During the late 1980s, the increased threat to national security posed by renewed guerrilla activities and the growing power of Colombian narcotics traffickers provided the rationale for considerable increases in military expenditures. In 1987 the armed forces budget stood at US$274 million, an amount nearly twice the spending level set a decade earlier. This amount represented nearly 15 percent of the federal government's total public expenditures for 1987, making military spending the second highest item after education in terms of official budgetary priorities. This proportion of spending was comparable to expenditures in the mid-1960s, a period when the armed forces were involved in an intensive effort to defeat the country's domestic insurgents. The proportion of government expenditures on defense in 1987 represented a significant increase over allocations approved during the early 1980s. At that time, military spending ranged from 7 to 10 percent of central government expenditures. In comparison, during the mid-1950s the Colombian armed forces received about 20 percent of the government's budget.

Military expenditures for 1987 represented only an estimated 1 percent of the gross domestic product (GDP--see Glossary). As a proportion of GDP, this level remained relatively constant throughout the 1980s, but it reflected a decline from an average of 1.7 percent of GDP during the 1970s. As a proportion of the gross national product (GNP--see Glossary), military spending also remained relatively constant through the mid-1980s. In 1985 military expenditures as a percentage of GNP were estimated at 1.2 percent, a level of spending proportionate to that maintained a decade earlier.

In 1987 the Ministry of National Defense estimated that the military's spending needs for the following year--which included plans for substantial equipment purchases--would total close to US$1.5 billion. Had this requested spending level been authorized, it would have been equivalent to roughly one-third of the Colombian government's total expenditures. The Colombian Congress, however, approved only US$313 million for the 1988 military budget, an amount that reflected an increase of 14 percent over the previous year's spending level. This approved increase in spending was insufficient to enable the armed forces to keep pace with inflation (see Inflation and Unemployment , ch. 3).

Nevertheless, in recognition of the country's security needs, the president and the legislature during 1987 devised alternatives to raise additional public funds for the armed forces without compromising government programs in other high-priority areas. One such effort was a presidential decree, issued in mid-1987, that exempted arms purchases from customs tariffs and duties. In September, Congress approved a measure providing for the issuance of special government bonds that would be sold to firms and individuals whose taxable profits were above 5 percent of 775 f annual income. Analysts anticipated that the sale of the compulsory bonds would raise as much as US$40 million in additional monies for defense.

United States military assistance represented an important source of funds for the Colombian armed forces. Funds scheduled under the Military Assistance Program (MAP) for fiscal year (FY-- see Glossary) 1986 included US$20 million in Foreign Military Sales (FMS) credits and US$950,000 provided under the International Military Education and Training (IMET) Program. The FMS credits were to be used for the purchase of replacement parts for vehicles and aircraft, infantry weapons, vehicles, construction equipment, and helicopters. Monies provided during FY 1987 included US$3.5 million in MAP funds and nearly US$1.5 million for the IMET program. At the beginning of FY 1988, according to one United States government report, Colombia owed no monies for credit financing that had been provided under the MAP.

Data as of December 1988