Department of the Army Historical Summary: FY 1981

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Security Assistance

Security assistance programs are the means by which the United States government seeks to achieve national security and foreign policy objectives by enabling allied and friendly nations to acquire and maintain the capability to defend themselves. During fiscal year 1981, Army security assistance programs fell into four categories: Military Assistance Programs (MAPs), International Military Education and Training Programs (IMETPs), Foreign Military Sales Financing Programs, and Foreign Military Sales (FMS) programs. Eighty-three countries and international organizations, such as NATO, participated in at least one of these four programs during the year. The programs provided defense equipment, services, and training to foreign countries under the authority provided by the International Security and Development Act of 1980 (PL 96-533), which amended the Foreign Assistance Act of 1961 and the Arms Export Control Act.

In all four programs, six countries accounted for 75 percent of the open case value. Four of the six were located in the Middle East. The table below lists them and the value of their cases as of 28 September 1981.

* Includes CDE programs.

As of 28 September 1981, the end of the fiscal year, seventy-six countries and organizations, listed in the table below, were receiving materiel from either MAP or FMS.

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Grant aid under the Military Assistance Program has declined steadily since fiscal year 1977. In 1981 Congress authorized MAP programs for four countries: Portugal, Spain, Sudan, and the Philippines. The following table provides comparative data on MAP for the past three fiscal years:

Foreign governments find some pieces of American military equipment more useful than others. The table below lists the most popular items in demand by FMS and grand-aid customers. "Delivered" means actually shipped; "programmed" means that the Department of the Army had a firm commitment; and "planned" means that the Department of the Army has tendered or a foreign government has requested a letter of offer and agreement (LOA) or that a foreign government has requested price and availability or planning and review data. All the figures are as of 28 September 1981.

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The International Military Education and Training Program provided instruction to military and related civilian personnel of friendly countries. During fiscal year 1981 the program consisted of $13.8 million for fifty-six countries.

Eligible foreign governments make Foreign Military Sales purchases of defense articles, services, and training from the U.S. government. The total FMS program (open cases) amounted to $40.8 billion at the end of the fiscal year. The Army had delivered $19.2 billion worth of equipment and services as of 30 September 1981, leaving $21.7 billion yet to be delivered. The Foreign Military Sales Financing Program provided credit and loan repayment guarantees. FMS financing was provided to thirty-two countries during fiscal year 1981. The program involved a total of $3.1 billion, with $1.4 billion allocated to Israel.

Because of the sensitivity and importance of issues involved, the President often makes decisions in the security assistance area. The Secretary of State provides continuous supervision and direction of the Military Assistance Programs, the International Military Education and Training Programs, and sales and exports, including Foreign Military Sales and Grant-Aid Programs, in order to ensure that they are integrated with other aspects of U.S. foreign policy. The Secretary of Defense has the responsibility of determining the military equipment that a country needs, procuring it, supervising the training of foreign military and civilian personnel needed to operate and maintain it, and super-

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vising its transportation and delivery. As a consequence, the secretary must also set priorities for procuring, delivering, and allocating military equipment.

Acting under the policy guidance of the Secretary of Defense and the oversight of the Secretary of the Army, the Undersecretary of the Army develops doctrine, negotiates and prepares procedures to implement international agreements, and carries out approved and funded foreign security assistance programs. Other key civilians in the process include the Assistant Secretary of the Army for Research, Development, and Acquisition, who implements security assistance at the secretariat level, and the Assistant Secretary of the Army for Installations, Logistics, and Financial Management, who reviews and resolves customer problems in all phases of supply and financial management. The Vice Chief of Staff of the Army also plays an important role. He acts as cochairman with the Undersecretary of the Army on the Security Assistance Steering Group, which serves as the advisory body for the Secretary of the Army and the Chief of Staff on all security assistance matters. The steering group assesses and interprets security assistance policy originating in OSD and other federal agencies and provides guidance to the Army staff for developing Army security assistance policy, plans, and programs. The steering group also allows top-level exchanges concerning ongoing and anticipated security assistance actions and provides oversight on Foreign Military Sales transactions. It reviews and recommends Army policy on all security assistance matters that affect the Army and recommends Army positions for the Army Export Control Board. The members of the steering group, except for the cochairmen, consist of deputy chiefs of staff, the commanding generals of DARCOM and TRADOC, and other high-ranking officers. The steering group receives staff support from the Army Security Assistance Coordinating Group, which is chaired by the Assistant Deputy Chief of Staff for Logistics (Security Assistance) (ADCSLOG[SA]), and consists of representatives from the Army staff and the major commands. The coordinating group also ensures that there is cooperation between the various staff agencies on certain security assistance cases. This detailed oversight of cases in preparation stands in contrast to the function of the steering group, which serves as a mechanism for final review.

Security assistance involves a large number of staff functions. Consequently, the steering group and the coordinating group are both very large and somewhat unwieldy when all members are present. Without cataloging all the agencies involved, two ex-

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amples will convey the complexity involved. The Comptroller General, who is a full-time member of the steering group, provides overall supervision for "the budgeting, accounting, funding, and financial management for security assistance." The Surgeon General, on the other hand, only attends when the subject under discussion touches on medical matters. He exercises overall supervision, direction, and control on the Army staff concerning the provision of "medical materiel, training, and related services" to foreign governments. Three offices, because of their importance in the process, deserve more discussion: Office of the Deputy Chief of Staff for Logistics (DCSLOG), Office of the Deputy Chief of Staff for Operations and Plans (DCSOPS), and the Office of the Chief of Engineers (OCE).

The DCSLOG acts in security assistance matters primarily through the ADCSLOG(SA), who is aided by the Security Assistance Policy Coordinating Office (SAPCO). The Assistant Deputy Chief of Staff coordinates the development of all Army policies related to security assistance, including the preparation of Army regulations affecting the field. He provides guidance on policy to the commanding general of DARCOM, who is the executive agent for the Army in all security assistance matters. Acting in behalf of the Chief of Staff, the ADCSLOG issues directives to all major commands on the subject. He also acts as the appropriation director for the Foreign Military Sales budget and as the budget program director for supply operations of the Military Assistance Program. SAPCO is the primary Army staff element for coordinating the development of security assistance policy. It keeps the ADCSLOG(SA) and other key staff members informed of major security assistance issues and coordinates policy on processing export licenses for munitions and technology referred to the Secretary of the Army for decision.

The DCSOPS acts as the main point of contact on the Army staff for joint strategic objectives plans and force development for friendly and allied forces. His office assesses the political and military aspects of proposed security assistance projects and determines the Army's position regarding what level of readiness and what configuration a foreign army should seek in light of U.S. contingency plans. The DCSOPS informs the joint Staff about the levels of support-both equipment and training-which a foreign army requires, and recommends what priorities should be assigned to each army. Within ODCSOPS, the Security Assistance Division of the Strategy, Plans, and Policy Directorate contains area desk officers who review specific programs and cases, analyzing them from the standpoint of Army policy. The

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division may propose changes in legislation, Department of Defense policy, or State Department policy to bring them more in line with national objectives and with realities in the local countries.

The Chief of Engineers is in the same position as the Surgeon General; he attends meetings of the steering group only when the questions under discussion affect his areas of responsibility. The Chief of Engineers acts as the principal adviser and agent for design and construction of facilities in foreign security assistance programs and coordinates all activities associated with engineering.

When a foreign government wants military assistance, the procedures followed are similar whether the request is for equipment, training, or construction. Frequently, the foreign government applies for security assistance at the American embassy. After review and approval by the Department of State, the request goes to the Department of Defense. If design or construction of a facility is involved, OSD refers it to the Secretary of the Army, who sends it, after appropriate staffing, to the Chief of Engineers for study. The Corps of Engineers prepares a document, technically referred to as a case, that describes the services the Corps is requested to provide, the sources of funding, and the payment schedule. The Corps sends the case to the Secretary of the Army, who, after a review by the interested staff agencies, forwards it to OSD for decision.

During fiscal year 1981 the Army staff participated in the development and review of proposals for inclusion in the fiscal year 1982 legislation authorizing security assistance-the International Security and Development Cooperation Act of 1981. Policy issues supported by the Army included lifting restrictions on assistance to selected countries in Latin America, Africa, and Southwest Asia; establishing a Special Defense Acquisition Fund for advance procurement of military materiel for sale to foreign countries; and setting higher dollar thresholds for congressional review of Foreign Military Sales cases. The Army made a proposal to give the same concessionary sales terms and conditions to the Republic of Korea that Congress authorized in 1981 for NATO, Japan, Australia, and New Zealand. The Army also recommended establishing assistance training programs.

Congressional reaction in favor of the Special Defense Acquisition Fund became evident soon after the Reagan adminis-

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tration presented its legislative proposals. Congress had rejected similar proposals on two previous occasions even though the idea had received favorable reports from the armed services committees. Since 1974 the Army had urged that the Department of Defense include such proposals in security assistance legislation, which was addressed by the Senate Foreign Relations and the House Foreign Affairs Committees, rather than in the defense legislation, which was addressed by the armed services committees. During 1981, this approach seemed to be successful, although Congress had not completed final passage of the legislation by the end of the fiscal year. If created, the fund should have a positive impact on the readiness of the Army. The Department of Defense could use the military materiel procured with fund dollars to fulfill urgent or emergency foreign requirements, thus avoiding diversions or withdrawals of Army materiel.

During 1981, the Army participated in the development of the new administration's conventional arms transfer policy approved by President Reagan on 8 July 1981. This policy, drafted by the State Department, received several reviews by the Joint Chiefs of Staff with assistance from the military services. The philosophy underlying the new policy was that arms transfers are an essential element of U.S. defense posture and foreign policy. The new program took a more practical approach toward authorizing, managing, and controlling arms transfers to foreign countries. It allowed, for example, security assistance teams overseas to do force planning with the host governments, an activity not heretofore permitted. Until enactment of the International Security and Development Cooperation Act of 1980, the Department of Defense handled requests for assistance involving construction and those involving equipment as part of the same program. The new law separated the construction effort from normal Foreign Military Sales to cover the design, construction, operation, and maintenance of real property facilities. It also raised the dollar level of Foreign Military Construction Sales (FMCS) that require congressional review from $25 million to $200 million.

Training for foreign military students is funded from both the International Military Education Training Program and Foreign Military Sales. Over 6,000 of these students have received military training in the continental United States and overseas under U.S. Army sponsorship. The IMETP provided over $7

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million; FMS training exceeded $27 million. The Fellows Program at the Army War College is the most prestigious training available under Army auspices for foreign students. Established by the Chief of Staff, General Bernard Rogers, in August 1977, its objective is to create and maintain special relationships with officers from military organizations of selected foreign countries. During the 1981-1982 academic year, students participated from Australia, Egypt, Germany, Greece, Indonesia, Israel, Japan, Jordan, Korea, Mexico, Nigeria, the Philippines, Saudi Arabia, Senegal, Sudan, Sweden, Thailand, and Yugoslavia. Over a period of years the Army attempts to give as many countries as possible the opportunity to take part in the program.

The Army formally opened the NATO Nike Training Center (NNTC) on 29 September 1980 at Fort Bliss, Texas. It operates independently as a separate NATO Maintenance and Supply Agency (NAMSA) facility and provides maintenance training to NATO countries on the European configuration of the Nike-Hercules missile system. Belgium, Germany, Greece, Italy, the Netherlands, and Turkey decided to improve the Nike system at the same time that the U.S. Army decided to phase it out. These events created the need for the center. Until then the Army had provided Nike maintenance training for the NATO allies. Two hundred and eighteen students attended during fiscal year 1981, and Fort Bliss provided administrative and logistical support valued at $2.3 million. FMS reimbursed these overhead expenses.

NATO interest in security assistance was high in fiscal year 1981 as efforts continued to improve combat effectiveness significantly through the modernization of armaments. Fiscal year 1980 momentum continued because the alliance recognized that the Soviets were continuing to build toward military superiority and perceived that the impressive modernization programs already carried out by the Warsaw Pact had resulted in a relative diminution of NATO's strength. At the end, of the year NATO could look forward to some reinforcement as Spain prepared to join the alliance.

The U.S. commitment to weapon standardization and interoperability, along with increased host nation support, remained firm during 1981. Foreign Military Sales during the year were less significant than American cooperative initiatives and efforts for future arms development and production in three areas: (1) reciprocal procurement agreements among NATO countries to

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make the total NATO defense market available to the defense industries of all alliance partners; (2) plans for coproduction of armaments as development is completed so that the weapon systems of one NATO country are available to other NATO forces at a low unit cost; and. (3) "family of weapons" agreements for new development projects, so that new weapons systems incorporate modern technology from the NATO countries without duplicating research and development costs.

By the end of the year, the Army staff had identified four major trends regarding security assistance in the NATO region. First, allied efforts to assist NATO's two poorest members, Portugal and Turkey, had not produced the extensive modernization programs necessary. In the future the organization would have to increase its efforts to strengthen and modernize NATO's southern flank. Second, the Army would need to study future coproduction agreements very carefully with regard to their impact upon the U.S. production base and the accompanying release of sensitive defense technology. Third, the U.S. and the other member nations would continue to solicit their allies to purchase certain weapons in order to generate enough orders to keep production lines "warm" and, in some cases, to expand the production base. Long production lead-times frustrate modernization efforts even when funds become available. Finally, the basis for security assistance to some NATO allies required shifting from perceived relative formulas to recognized requirements. Negotiations throughout fiscal year 1981 moved in this direction by consistently pressing for "best effort" pledges rather than specific items of equipment or specific percentage formulas based on aid received by other nations.

Three European countries-Turkey, the Federal Republic of Germany (FRG), and Switzerland-participated in the Foreign Military Sales program to a significant extent during 1981. Turkey ordered, at a cost of $130 million, 348 kits for upgrading M48A1 tanks to the M48A5 configuration. Turkey planned to convert a total of 918 M48A 1 tanks to M48A5s. By 30 September 1981 Turkey had shown an interest in manufacturing many of the items needed for modernization. Additionally during September, planning began on forming a combined U.S.-Turkey Tank Modernization Office in Turkey sometime during calendar year 1982 to oversee the entire program. During 1981 the Federal Republic of Germany accepted a new Foreign Military Sales case for a two-week training course on the use of a computer program to determine the effects of explosives on targets. The Corps of Engineers' Waterways Experiment Station scheduled

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the course for presentation early in the first quarter of fiscal year 1982. In another Foreign Military Sales case the Corps of Engineers blew up a section of bridge construction to provide the German Army with information with which to evaluate the effect of explosives on bridges. Switzerland initiated a test program to select a new main battle tank in 1981. Two tanks, the U.S. M1E1 and the West German Leopard II, entered the competition. The Army leased two M1 tanks to the Swiss for a one-year technical test, and two more tanks for operational testing. The Swiss expected to complete their tests in the third quarter of fiscal year 1982 and make their selection during the fourth quarter. The Army staff was preparing a memorandum of understanding for Swiss acquisition and coproduction of the M 1E1 as the fiscal year ended.

Defense Requirements Surveys continued to provide the first step in initiating or expanding security assistance relations with countries in the Middle East and Africa. These surveys consisted of either an on-site study to determine the requirement of a foreign government for a particular American weapons system or a wide-ranging study, also on-site, to determine the materiel, organizational, doctrinal, and manpower needs of foreign governments in light of the threat posed by potential enemies. During 1981 the Army conducted surveys in Saudi Arabia, Jordan, Egypt, and Sudan. Seven countries in the Middle East qualified during 1981 for either FMS credits, IMET, or Economic Support Funds. These last are monies contributed by the U.S. as either a grant or a loan to support friendly governments which face particularly difficult external security threats. The funds, administered by the U.S. State Department, may be used only to bolster the local economy as an offset to the government's abnormally large expenditures on defense and may not be used to purchase defense or defense-related materiel. Egypt and Israel received the largest FMS credits, while Jordan was the largest IMET client.

The security assistance program for Saudi Arabia continued to be the Army's largest program during fiscal year 1981. Total program value stood at $22.7 billion. Construction projects accounted for $18.8 billion; $1.9 billion was for Saudi Arabian National Guard (SANG) modernization, and $2 billion for Saudi Arabian Land Forces (SALF) modernization. At the end of the fiscal year the Army was considering plans to expand the Two-

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Brigade Mechanization Program to include two additional brigades. In 1981 the Army and the Saudis drafted a Saudi Arabian Land Forces Aviation Master Plan which called for the procurement of 123 helicopters over the next seven years. The estimated cost exceeded $6.5 billion. The Security Assistance Division in the Office of the Deputy Chief of Staff for Operations and Plans expected that this program would be accepted and implemented during the first quarter of calendar year 1982. During 1981 the Saudi Ordnance Corps Program continued to improve the Saudi capability to maintain equipment provided under FMS.

On 24 August 1981 the United States and Saudi Arabia signed a six-year memorandum of understanding concerning the development of a comprehensive health care system for the Saudi Arabian National Guard. Since September 1979 when Prince Abdullah requested assistance from several countries, the U.S. has carried on negotiations with the SANG. The prince had asked for a complete health care system throughout his kingdom, to include construction and operation of hospitals and clinics, training programs, a logistics system, a field medical service, a medical records system, and a medical evacuation system. A team of Army Medical Department and Corps of Engineer personnel developed an intensive plan for accomplishing these objectives in August 1980. The Army provided the plan to the Saudi National Guard. Further discussions with Prince Abdullah revealed that his immediate interest was to open and have in operation two hospitals already under construction--one in Riyadh and one in Jidda.

Other countries expressed interest in the project and negotiated with the Saudi Arabian National Guard at the same time as the United States. In December 1980 the Saudis agreed that the British should operate the hospital in Jidda. Additionally, the Saudi National Guard and Great Britain entered into a memorandum of understanding for development and implementation of an entire health care system for the Saudi Guard. The following month the U.S. proposed that the U.S. operate and maintain the Riyadh hospital complex as a 200-bed acute-care facility. The Saudi Guard accepted the proposal, and the U.S. prepared an appropriate letter of offer and acceptance. However, the Saudi Guard wanted a memorandum of understanding similar to the one with Britain, addressing the entire medical project. Following detailed negotiations, the two countries signed the memorandum of understanding on 24 August 1981. The dollar estimates for a complete health care system were in the billions. For this reason there was considerable interest in and competition among U.S. health care corporations to obtain the contracts let by the U.S.

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government. For the same reason considerable rivalry had developed between the U.S. and Great Britain over the award of these contracts.

The Department of State sent the first letter of offer and acceptance for the operation and maintenance of the Riyadh hospital complex to Congress in April 1981. The U.S. anticipated that the Saudi Arabian National Guard would sign the letter early in the first quarter of fiscal year 1982. The Army Medical Corps will oversee the letting of contracts to U.S. health care firms and supervise their fulfillment.

In fiscal year 1981 the major portion of support provided by the Corps of Engineers for foreign countries went to Saudi Arabia, as it had in past years. The Corps provided design and construction support under four programs: the Engineer Assistance Agreement Program, the Saudi Naval Expansion Program, the Saudi National Guard Modernization Program, and the Peace Hawk-Peace Sun Program. In addition, the Corps continued to work with and assist the Saudi Arabian Army Ordnance Corps in managing a modern logistics system. During the year contractors completed projects let by the Corps of Engineers valued at $985.6 million. The Corps awarded construction contracts valued at $1.8 billion as well as design contracts and contracts for the modification of designs valued at $35.2 million. The U.S. government approved Foreign Military Sales cases, including amendments and modifications, totaling $1.528 billion for implementation by the Corps and canceled cases worth $1.491 billion. In addition the Corps prepared master plan estimates and design and construction schedules for army aviation facilities for the Saudis. The construction program, which will probably fall to the Corps, has an estimated value of $2 billion.

Also in the Middle East, the Corps provided support for the Israeli-Egyptian Peace Treaty. The U.S. Air Force acted as the Department of Defense project manager and the Corps of Engineers as the construction agent for the design and construction management of two air bases in the Negev Desert. The Department of Defense approved the program, which was estimated to cost $1.044 billion based on the amended plan of work. Funding for the initial phases of the construction program, some $2.58 million, came from the Israeli Foreign Military Construction Sales (FMCS) case. Construction continued throughout fiscal year 1981 at the Ramon and Ovda sites. In addition to the construction of the two Israeli air bases, the Corps of Engineers managed the design and construction of two base camps in the Sinai to support the Multinational Force and Observers Peacekeeping Operation.

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The Corps awarded the first increment of a contract on 2 September 1981. It expects the completed program to cost from $50 million to $100 million.

During 1981 the Corps continued its involvement in the construction and installation of equipment for the Jordan Armor Rebuild Facility (JARF). By the end of the year, construction was 50 percent complete and the rest was scheduled to be done by January 1983. The Corps also finished a management plan to guide the Jordanian armed forces in all actions necessary to start up and operate the JARF at its rated capacity. Total case value as of 30 September 1981 was $16.79 million.

As a result of the Syrian-Jordanian border crisis in December 1980, the Army expedited delivery of materiel provided by the Military Assistance Program and Foreign Military Sales to the Jordanian Army. Special airlifts delivered 1.13 million rounds of 5.56-mm. ammunition, 22,600 M67 hand grenades, 500 90-mm. high explosive tank cartridges, 2,000 81-mm. high explosive cartridges, 323 M60 machine guns, and 400 81-mm. illuminating cartridges. Jordan's largest purchase from the Army during fiscal year 1981 consisted of twenty-four AH-1S Cobra helicopters, which with support equipment totaled $2.1 billion.

During the fiscal year, Morocco, Tunisia, and Egypt were the most important FMS and IMET customers in northern Africa, with Egypt receiving the bulk of American attention. Egypt in 1981 continued to receive extensive Foreign Military Sales credits to finance security assistance programs begun in fiscal year 1980. The total program through fiscal year 1983 had a planned cost of $3.95 billion. The Army portion of the program was valued at $2.3 billion. The most significant items were 439 M60A3 tanks, 1,214 M113 vehicles, 12 Improved Hawk batteries, and an undisclosed number of I-TOWS. Security assistance provided during 1981 amounted to $900 million, with accelerated delivery of weapons receiving the greatest emphasis. These munitions included 128 M60A3 tanks, 105-mm. ammunition, M88A1 recovery vehicles, and associated spare parts and test equipment diverted from Army stocks to meet the early delivery dates. The Department of the Army in April 1981 directed the U.S. Army Training and Doctrine Command to send a fourteen-man mobile training team to Egypt to help the Egyptians incorporate fifteen CH-47 helicopters into their armed forces. The Egyptians had purchased the helicopters commercially. In addition to new equipment, Egypt benefited from twenty-eight Defense Production Assistance Projects, of which the Army had implemented twelve by 30 September 1981. The objective of these programs

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was to strengthen the capabilities of the Egyptian defense industry as well as the Egyptian economy. Representing the Army, Maj. Gen. Clyde W. Spence, the Assistant Deputy Chief of Staff for Logistics (Security Assistance), conducted the first management review of Egypt's entire program with his Egyptian counterpart in September 1981. They discussed the complete program, identified and reconciled differences of interpretation between the two services, and laid the groundwork for new initiatives.

The Army increased the number of mobile training teams in sub-Sahara Africa in 1981. A majority of the teams were equipment oriented. However, nation-building projects, designed to improve a country's technical infrastructure or economy significantly, also increased.

The slumlike conditions in which ordinary soldiers and their families lived contributed to the Liberian Army's lack of loyalty to the Tolbert regime and fanned the violence associated with the coup that brought Master Sergeant Samuel K. Doe to power in April 1980. During 1981, a mobile training team worked with the Liberian government on housing for its army, while a second team helped upgrade command and control. A technical assistance field team (TAFT) deployed to Nigeria for one year to help the Nigerian Army develop its physical training program. Also, a defense survey team traveled to Nigeria to study the question of expanding the training facilities of that country's army into five new regions.

The U.S. placed increased emphasis on security assistance to Sudan during fiscal year 1981. The Army played a key role in preparing a military options package for the country. As a result the American and Sudanese armies developed a ground forces package which consisted of M60A3 tanks, M88 recovery vehicles, M114 towed howitzers, heavy equipment transports, ground surveillance radars, and M125A2 (81-mm.) mortar carriers. The Army staff planned to accelerate delivery of this equipment to Sudan early in fiscal year 1982 by taking it from U.S. Army assets.

Sudan, Nigeria, and Kenya were the leading Foreign Military Sales and International Military Education Training Program customers south of the Sahara during 1981. The Army staff expected further expansion during fiscal year 1982.

Security assistance programs for the Pacific region and Asia during fiscal year 1981 continued to be affected by the instability

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in the Indian Ocean area which was caused by several factors: the Soviet invasion of Afghanistan and the possibility of further Soviet advances into Pakistan and Iran; the threat of a wider conflict in Southeast Asia arising from the occupation of Kampuchea by the Socialist Republic of Vietnam, coupled with Thailand's tacit allowance of anti-Vietnamese elements operating from inside Thailand; the unresolved internal problems in the Philippines; and the consolidation of power within Korea by the regime of President Chun Doo Hwan.

U.S. support of military equipment previously furnished to Taiwan continued. The Department of Defense announced in early January 1980 the sale of new materiel to the Taiwanese. Deliveries began during 1981. Army equipment included self-propelled 155-mm. and 8-inch howitzers, .50-caliber machine guns, and IHawk missiles. Under the 1981 Foreign Military Sales program for Taiwan, forty Taiwanese personnel-nineteen officers and twenty-one enlisted men-received U.S. Army training, most of it of a technical nature, in twenty-three courses of instruction.

The United States continued to contribute to South Korean security through the Mutual Defense Treaty of 1954, the maintenance of U.S. troops in Korea, an extensive Foreign Military Sales program, IMET training, and technical cooperation in the development of selected Korean defense industries. The Carter administration in the fall of 1977 decided to withdraw all U.S. forces from Korea over a five-year period. In July 1979 President Carter decided, on the basis of new intelligence information regarding troop and equipment levels in the north, to defer any more withdrawals for two years. President Reagan canceled plans to withdraw ground combat troops, although some withdrawal of ground support personnel and transfer of key items of military equipment continued as scheduled. During fiscal year 1981, the Army added ammunition valued at approximately $81 million to U.S. war reserve stocks in the Republic of Korea (ROK), which are designated for use by ROK ground forces in the event of war. The Army provided instruction during the same period to eighty ROK personnel-sixty-seven officers and thirteen enlisted men-in various professional development and technical training courses.

Japan continued to acquire military equipment, services, and training of a defensive nature from the United States in 1981. Japan also continued to conduct a vigorous licensed production program which enhanced its defense posture, expanded that portion of its industrial base capable of defense production, increased

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its self-sufficiency, and ensured interoperability with U.S. forces. Coproduction agreements with the United States involved the production of such systems as Nike and the IHawk. Discussions were held concerning coproduction of additional systems to include TOW, Copperhead, Stinger, the M 110A2 howitzer, and the AH-1S helicopter. During the year, thirty-two Japanese Ground Self-Defense Force personnel received professional or technical training in the United States, and 1,503 officers and men participated in IHawk and Nike annual service practice at Fort Bliss, Texas.

The threat of incursions across the Thai-Kampuchea border by forces of the Socialist Republic of Vietnam continued to stimulate Thai concerns and requests for security assistance. Air defense and additional armor rated high on the priority list for Thailand. The U.S. and Thai governments initiated bilateral logistical planning between their respective services in order to provide Thailand with the expertise needed for long-range planning.

The U.S. Army, Navy, and Air Force conducted discussions in Washington with a Pakistani defense group in mid July. The Army targeted its security assistance efforts on the deficiencies in Pakistani defenses and on the obsolescence of existing equipment. The Pakistani were mainly concerned with the early delivery of F-16 aircraft. However, armor, air defense, and other combat capabilities also received considerable attention. U.S. overtures to Pakistan, of which the Washington Security Assistance Conference was only one example, caused U.S. relations with India to cool during the year. India did not use all the IMET funds allocated to it during 1981, and the two governments did not conclude any major Foreign Military Sales arrangements.

Nineteen Latin American countries received FMS financing or training under the International Military Education Training Assistance Program. Countries which in previous years rejected U.S. security assistance or had their programs terminated by the U.S. government because of human rights issues did not receive funds during fiscal year 1981. Congress prohibited Nicaragua from receiving assistance during 1981.

El Salvador and Honduras became the major recipients of security assistance in 1981, with El Salvador receiving more attention because of the fighting in that country. The United States provided $25 million in FMS credits to El Salvador. In addition

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El Salvador received $25 million worth of security assistance by virtue of two decisions made by the President under Section 506 of the Foreign Assistance Act, which authorized him to increase assistance by one-fourth of the amount already approved by Congress without seeking additional authorization. El Salvador used $20 million of Section 506 authority to draw on Army stocks. Items provided included the lease of six UH-1 H helicopters. The U.S. gave another eight UH-1Hs to El Salvador outright. The Army also provided a variety of small arms, crew-served weapons, ammunition, clothing, and combat gear.

Relations between the U.S. Army and Latin American armies remained generally good throughout the year. The proposed personnel exchange programs with Argentina and Chile and the passage of the Yatron Amendment, which approved incremental costs for IMETP recipient countries, helped maintain good relations. Before 1981 the Army prorated costs among students, that is, foreign countries paid the average cost per student. The incremental cost approach presumes that the Army would teach these courses for its own personnel whether or not foreign students were present. The foreign country is charged, therefore, only the additional or incremental cost to the Army caused by the added students.

An officer who selects a foreign area officer military occupation specialty goes through rigorous training. After completing foreign area officer courses at the U.S. Army Institute for Security Assistance, Fort Bragg, North Carolina, the officer must obtain a graduate degree in international relations or regional studies. He or she spends one year in the area of specialization and learns one indigenous language. Only then is preparation complete. Until 1981 the Office of the Assistant Chief of Staff for Intelligence was responsible for the overseas training of foreign area officers even though the Office of the Deputy Chief of Staff for Operations and Plans was the proponent for the foreign area officer military occupation specialty (MOS). In the current fiscal year Lt. Gen. James M. Lee, the director of the Army staff, transferred the responsibility to ODCSOPS effective January 1982. In other developments in the foreign area officer MOS, the Security Assistance Division in ODCSOPS established a Foreign Area Officer Steering Committee as prescribed by the Department of the Army for all MOSS. The committee met on 16 July 1981, set up a series of topics that it planned to address

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including the structure of foreign area officer management, and broke up into working groups. At the end of the year the Army staff was working on the new joint Manpower Program for the Rapid Deployment Joint Task Force. The new program reflected a substantial increase in foreign area officer positions.

The personnel exchange program (PEP) expanded during 1981 from eighty-six positions in fifteen countries to ninety-four positions in sixteen countries. The expansion included an agreement with Honduras for an exchange program as well as an increase of two positions for Australia, two for Canada, one for New Zealand, and three for the United Kingdom. Exchanges with Australia, Canada, New Zealand, and the United Kingdom made up the bulk of the personnel exchange program in 1981-seventy-five of the ninety-four approved positions. At the close of the fiscal year the government was actively considering expansion of the program to Colombia, Venezuela, and Mexico; moreover, the Departments of State and Defense authorized the Army to begin exploratory talks with the armies of Argentina and Chile. To assist efforts in Latin America, ODCSOPS designated the U.S. Security Assistance Agency, Latin America, as the focal point for regional matters of the personnel exchange program. The most important unresolved question affecting the future direction of the program was a legal one. Some countries viewed congressional prohibitions concerning reciprocal arrangements for formal training and medical care as impediments to realizing the full potential of the program.

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