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Third-World Armies in Business for Themselves

THE United States today faces in several countries the involvement of the military in illicit activities. As a prime example, reports indicate that China's reluctance to make concessions on the issue of intellectual property stems from the People's Liberation Army's interest in factories pirating foreign CDs, software, and videotapes.

Such military entrepreneurship is not unique to China. As countries in Asia and Africa emerged into independence, the armed forces represented the new nations' best-trained and most-disciplined elements. In subsequent years, when civilian regimes were overthrown for corruption, the military emerged as an honest alternative. Armies and navies were encouraged to initiate factories and other civilian enterprises to stimulate development. In Indonesia, the ''dual function'' role of the armed forces has been part of the national philosophy.

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But in many such countries, the temptations for profit and advantage from the military's unique position in society over the years have proved too great. An equally corrupt military group often replaced a corrupt civilian regime.

Where military regimes are in place, national budgets are skewed to enhance the armed forces' power and opportunities. Substantial imports of weapons and equipment and, in some cases, local arms-manufacturing provide opportunities for lucrative commissions and profits. To widen their base of support, military rulers grant special benefits to fellow tribesmen or ethnic groups. Close links between armed forces, juntas, and conservative business groups are also common. And when normal bases for cooperation do not exist, the military pressures local businesses to grant it participation in profitable enterprises. Firms importing significant commodities such as building materials or fuel are particularly vulnerable to pressures. The efforts of Nigeria's current military regime to retain power do not arise from a strong sense of public service.

In nonmilitary dictatorships like the Philippines under Ferdinand Marcos, civilian leaders formed profitable partnerships with military elements on which they depended for power and security. Even in some partially democratic regimes, such as Thailand, military elements have sufficient influence to act independently of the government. Many reports link Thai military units with activities along Cambodia's border, including arms smuggling to the Khmer Rouge and drug importation. There and elsewhere in Southeast Asia, armed forces have gained profitable logging concessions.

Outsiders play a part, encouraging the military to buy equipment and services that the country cannot afford. Alliances are made with generals through promises of post-retirement employment. Foreign bank accounts are created. Although Americans are generally inhibited from more-open deals by the Corrupt Practices Act, other countries' merchants make profitable pacts with military rulers.

The problem is not confined to Asia. Observers say the benefits gained by Haiti's military fostered the Cedras regime's reluctance to step down. In Russia, military officers are linked to mafia-type elements controlling parts of the emerging private sector.

This military role in exploitative and often illegal enterprises has many ramifications. The pirated intellectual property in China illustrates a direct influence on efforts at fair world trade. The links between armed-forces companies and Asian loggers have resulted in the destruction of millions of acres of virgin tropical forests in Southeast Asia. The demands of military leaders for financial rewards and tight control over imports and exports impede foreign investment and development in countries such as Nigeria.

A military role in commercial enterprises can impede moves toward democracy and honest government. The military resists turning over control to civilians, a central requirement in working democracies. Too much may be revealed and curbed under the scrutiny of a democratic system.

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During the cold war, the US forged security arrangements with several countries where the armed forces dominated and were, reportedly, corrupt. Washington often looked the other way when confronted with the evidence. Today that evidence cannot be ignored if the US is to stand for freer trade, a safe environment, and progress toward democracy.

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