ardship budgets have never been bigger. For example, our site cleanup program, now at $1.2 billion, has doubled in two years (FY 90 to FY 92). This is occurring in a period of extraordinary budgetary pressure.

Even though all this is true, DoD's influence on the private sector is declining. This is true generally, and I believe it is also true with regard to environmentally related issues.

Why is this the case?

It's true because for most sectors of the economy, DoD provides only a small percentage of sales. Defense business simply cannot carry most industry, whether it's for electronics or for recycling markets. We expect our defense budget to be only 3.6 percent of the GNP (gross national product) by FY 96, its lowest point in over 50 years. So our influence and capability to cause change in the economy is decreasing pretty dramatically.

DoD's ability to lead or influence markets is also influenced by how we are, and will, conduct the business of defense.

We have recognized the value of commercial practices, and some of our initiatives focus directly on adopting commercial ways of doing things. The revised DoD Directive 5000.1 and DoD Instruction 5000.2 that I mentioned earlier contain clear guidance on our preference for

commercial products and other non-developmental items and the means to acquire them.

I have already discussed our growing reliance on commercial standards and product or material specifications. We have three objectives: to use commercial products wherever they meet our requirements, to make procurement of commercial products themselves far easier and to adopt the commercial business practices that make sense.

That's where the future markets are. And with a strong commercial base, we will continue to have a strong defense base both for peacetime modernization and for any potential future situation where we need to expand our forces. To make sure that we improve our capability in this arena, our new acquisition policies integrate industrial-base planning directly into the acquisition process.

Just as we are increasing our investment in the environment, we are also emphasizing our research and development so that we will have the right technologies available when we need them. I might add that this includes environmental technologies.

This emphasis is a fundamental change in approach to R&D vis-a-vis procurement. Secretary of Defense (Dick) Cheney told Congress last winter that this

will be a decade of development, more than of production." While the overall budget is decreasing, we're preferentially protecting our science and technology accounts.

And while we are scaling back production, terminating some programs and starting development of few major new systems, the FY 93 RDT&E (research, development, test and evaluation) budget authority will, after inflation, be 10 percent above the FY 91 levels.

I need to be clear, however, we will focus only on technology needs for the defense mission not being addressed by the commercial sector. DoD will, for example, conduct R&D to develop new environmentally beneficial or protective materials, but only if it's in support of unique or important defense needs.

In closing, we are proud in the department of defense to be in the forefront of pollution prevention. We will also continue our efforts to make environment a part of every defense mission. We believe that defense and the environment are compatible.

For example, laser technology applied to paint removal will not only eliminate the use of toxic chemical strippers, but will reduce the workload of stripping a fighter from 11 to 12 people for six days to just two people in a half day.

We will continue to aggressively pursue changes to our systems and operations where they are cost-effective and result in improvements to our efficiency and performance.

Thank you for this opportunity to testify. ...

Published for internal information use by the American Forces Information Service, a field activity of the Office of the Assistant Secretary of Defense (Public Affairs), Washington, D.C. This material is in the public domain and may be reprinted without permission.

The nations of Eastern Europe now have freely elected governments. There is a freely elected president of the Russian Republic. Germany has been reunited. The Warsaw Pact has been dissolved. Soviet forces have withdrawn from Hungary and Czechoslovakia and have set a schedule for leaving Poland and Germany. And the Soviets have announced that they will withdraw some military forces from Cuba.

Some of my first international visitors as secretary of defense were from Latin America. I continue to meet with senior Latin American leaders, and I look forward to continuing this dialogue.

And let me say how much I've relied on the outstanding leadership of the U.S. Atlantic Command, under Adm. Bud Edney, and the U.S. Southern Command, under (Army) Gen. George Joulwan. They've done a superb job in their areas of responsibility.

The Southern Command, in particular, plays a key role in keeping the lines of communication open

with our friends in South and Central America. Gen. Joulwan is our point of contact for ensuring that our programs are run effectively. He will continue to lead U.S. efforts to meet our mutual security needs.

During my discussions with Latin American leaders, we have reviewed many issues: the changing world; the new security strategy of the United States; the triumph of democracy and the free-market economy; our interdependence as partners for security and economic growth; and how we can find ways to work together to make our democracies, our economies and our national and regional security stronger.

I would like to talk about these areas and seek your assistance as we work together for progress, development and peace in our hemisphere and in the world.

During my 2'h years as secretary of defense, we have witnessed some truly momentous events.

Spread of Freedom

These events highlight the spread of freedom and the hope of greater economic opportunity throughout the world. This is true for Latin America as well.

Today, all Latin American countries but two have presidents freely elected by their people. One of the exceptions is Cuba, where an isolated ruler continues to cling to a false dogma, and the other is Haiti, where the constitutional government has been temporarily suspended by a coup.

Latin American countries also joined the world in condemnation of the brutal Iraqi attack of Kuwait and, with the sole exception of Cuba, supported the worldwide coalition's landmark victory to restore Kuwait's independence. Your countries contributed through oil production, offers of military personnel and equipment and participation in regional peacekeeping operations after the liberation of Kuwait.

For example, Argentina sent ships to the Persian Gulf during Desert Shield and Desert Storm.

Chilean helicopters and crews and military personnel from Argentina, Uruguay and Venezuela now serve with United Nations Forces in Kuwait. These and the contributions of other Latin American countries to this successful example of international cooperation are deeply appreciated.

The Soviet Union's cooperation in condemning Iraq's aggression showed how much the international strategic environment has changed as a result of positive developments within that country. Those developments—towards more openness, democracy and a freemarket economic system-were accelerated with the failure of the hard-line coup attempt in August.

Even before the collapse of the coup, the United States had recognized the dramatic transformation taking place in the global strategic environment and had set in motion a review of existing strategy and a radical restructuring of our armed forces.

We have changed the assumptions that had driven force planning under our former strategy.

For 40 years following World War II, our military assumptions were geared to the threat of a massive, quick-thrust Soviet invasion into Western Europe, involving perhaps 100 divisions. Such a conflict could quickly go global and could perhaps involve the use of nuclear weapons. These were the assumptions that led to the force structure we maintained in the past.

nate multiple-warhead intercontinental ballistic missiles-the most vulnerable and unstable part of Soviet and U.S. nuclear forces-and to take immediate, concrete steps to permit the development of non-nuclear defenses against limited ballisticmissile strikes.

With the sweeping transformation of the former Soviet bloc, the old assumptions are obviously no longer valid.

Our new assumptions acknowledge the fact that we can plan on having significant warning time before facing a global conflict, time in which we could regenerate our force structure in response. Consequently, we can reduce our forces without sacrificing our security.

Our plans call for a 25 percent cut in our force structure. The U.S. Navy will lose over 100 ships; the Air Force will be cut by 10 tactical fighter wings; the Army will be cut six active divisions; and there will be proportional cuts in the Marine Corps.

We are also closing over 300 facilities and installations and making deep cuts in our defense budget. Between 1985 and 1996, we will have cut defense spending in real terms by more than one-third. By 1996, we will be spending a lower portion of the government's budget on defense than at any time since before World War II.

The failure of the coup in the Soviet Union offered us an opportunity to do more-an opportunity that President (George) Bush seized with his historic and bold initiative to unilaterally reduce the U.S. nuclear arsenal.

As a result of the president's initiative, we've begun steps to bring home and destroy our inventory of ground-launched, short-range nuclear weaponsover 2,100 warheads. We are also removing all tactical nuclear weapons from our surface ships and attack submarines as they return from deployment.

President Bush has asked the Soviets to move with us to elimi

Technology Issues

The spread of ballistic-missile technology is an area of great concern and one in which the countries of Latin America can help. Some 15 nations in the world have ballistic missiles now, and, in less than a decade, that number could grow to 20. In the gulf war, we saw the damage that even crude Scud missiles could do in the hands of a dictator.

Your countries can work with us to prevent the spread of ballistic-missile technology by observing Missile Technology Control Regime standards for exports. And although countries need to be able to meet their reasonable self-defense requirements by purchasing defense equipment, sales of other types of weapons to regions where tensions are high, such as the Middle East, should be limited.

There are other areas in which inter-American cooperation can pay dividends for all of our countries.

We recognize the contributions of Latin American military commanders, officers and enlisted personnel in supporting the democratic process, and we need to build on that progress toward a tradition of subordination to civilian authority. We are ready to work with you and your governments to strengthen the institutions of democracy and free-market economies and to promote peace.

Several areas where cooperation holds promise are worth mentioning:

First, peacekeeping. With restructured military organizations, many nations can play an important role in peacekeeping operations. These operations help prevent conflict and are valuable not only for the countries involved but for the entire world community.

Latin American countries have already shown their effectiveness in these kinds of operations, through their peacekeeping efforts in the Persian Gulf following the gulf war and elsewhere in Asia, Africa and this hemisphere.

Within Latin America itself, confidence-building measures between neighboring countries would contribute to regional peace and security. Such measures would promote trust and openness among the countries of the region. There is a great deal of experience in this area in Europe, where confidencebuilding measures are used by NATO nations and the countries of the former Warsaw Pact.

Lessons learned there can contribute to the security of democracy in the Western Hemisphere. War between countries of the Americas should be unthinkable, and conflict must be prevented.

Many of our countries are confronting an environment of constrained resources. Our reductions in the past have given us considerable experience in helping civilian communities adjust to the closure of U.S. defense bases, and we are putting that knowledge to use ourselves as we make the current reductions in our forces. We also have set up retraining programs to help people separated from the military find civilian employment.

The United States would be delighted to share new ideas and procedures for converting defense resources and industries to civilian ownership and use. And we may be able to provide technical assistance on specific industries, organizations or military force structure issues.

Using scarce defense resources effectively and effi

ciently will be a challenge for all of our countries. We are changing the International Military Education and Training program for Latin America to make specific training available to a broader group of peoplemilitary officers, civilian executive-branch officials, and legislators who must oversee defense budgets and strategies. Through the program, a range of assistance from discussions and orientations to actual training and education will be available.

Illegal Narcotics

Another area of major importance for continued cooperation is our counternarcotics effort. Illegal narcotics are a scourge that poisons both the countries where they are being produced and the countries where they are being used.

Those who produce, transport and distribute illegal narcotics are the source of violence and corruption that can inflict great injury to our citizens and grave damage to our political and economic systems. They are a threat to our families, our institutions of government and, indeed, our nations.

We have begun to work together, but there is much more to do. In the war against illicit drugs, all resources must be brought to bear. While counternarcotics operations are primarily a law enforcement mission, military organizations can provide unique skills to complement law enforcement efforts.

Military forces can provide transportation, security and logistics; control rivers, coast lines and national airspace; and move directly against major concentrations of traffickers and their laboratories. We would be pleased to lend our expertise to support your operations.

We recognize that the problem will not be solved unless we reduce demand in the United

States and elsewhere in the world.

Within the United States, the Department of Defense is the lead agency responsible for the detection and monitoring of the aerial and maritime transit of illegal drugs. We have established a vigorous program for spotting illegal narcotics entering the United States. We also provide training programs, personnel support and equipment to U.S. law enforcement agencies to help them combat drug trafficking.

Cooperative security efforts among the nations of the Western Hemisphere promote peace and stability. In a world in which global economic interdependence is a fact of life, peace and stability are the foundations of prosperity. The United States seeks to build on these foundations through a hemispheric free-trade partnership among our nations.

President Bush's Enterprise for the Americas Initiative has shown impressive results. After establishing a free-trade agreement between Canada and the United States, we are negotiating another free-trade agreement with Mexico.

The United States and the overwhelming majority of Latin American countries have signed trade and investment framework agreements under this initiative—the first step to freetrade agreements with the United States.

Through free trade and continued economic reform policies, we foresee economic progress for all of our countries.

Our national security goals for the Western Hemisphere are straightforward. We believe that free democratic institutions are the surest guarantee of human rights and economic and social progress for the peoples of the region. We believe that national

and regional security and economic security are indivisible.

Threats to democratic institutions and economies arise from aggression, coercion, insurgencies, terrorism and illicit drug trafficking. Cooperation among the countries of the region is the best approach to combating them.

Regional arms control agreements, appropriate restructuring of national forces, confidencebuilding measures and full adherence to the Treaty of Tlatelolco and International Atomic Energy Agency agreements can make this hemisphere a more secure and prosperous place for ourselves and our families. The economic system within our hemisphere must be open and expanding, conducive to a prosperous international economy with benefits for all nations.

The United States has already set a course to meet the security challenges of an international environment that is changing at a breathtaking pace. We have adopted a new defense strategy and have begun a major restructuring of our armed forces.

But some elements of our approach to national security remain constant. The United States has always looked to its friends and allies to meet threats to our mutual interest. This element of our approach has not been altered.

As partners in national, regional and international security, we will continue to work with you to promote peace, democracy and economic prosperity.

Thank you very much.

Published for internal information use by the American Forces Information Service, a field activity of the Office of the Assistant Secretary of Defense (Public Affairs), Washington, D.C. This material is in the public domain and may be reprinted without permission.