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What’s in a Name? Developing Countries and Security Cooperation

September 26, 2018

This post comes from Dr. Fabiana Sofia Perera, Assistant Research Fellow at the William J. Perry Center for Hemispheric Defense Studies and a 2016 alumna of Bridging the Gap’s New Era Workshop.

Defense Secretaries from the countries of the western hemisphere will convene in Cancun, Mexico next month to talk about the most pressing issues facing defense and security institutions in the Americas. The biannual meeting presents an important opportunity for the US to engage with Latin America as the hemisphere continues to try to work together to address the humanitarian crisis in Venezuela and other challenges. After the underwhelming Summit of the Americas, defense seems like a promising avenue for cooperation. Secretary Mattis already met with a number of his counterparts during his first trip to the region in August promising a closer relationship between the US and Latin America.

Security cooperation between the US and Latin America, however, faces one important obstacle: the definition of developing country. Though scholars think of the region as part of the developing world (studies of Latin American countries are routinely featured in journals and conferences focusing on development), most countries in the hemisphere are middle income. Trinidad and Tobago, and Estonia, for example, have about the same GDP per capita; Uruguay is nearly on par with Croatia; Costa Rica and China are within a few dollars of each other. This is where the US runs into difficulties for carrying out cooperation activities.

US Code, Title 10, Section 312 provides that security cooperation money “may be used only for the payment of expenses of, and special compensation for, personnel from developing countries.” US Code further stipulates that the term “developing country” “has the meaning prescribed by the Secretary of Defense [in] the National Defense Authorization Act for Fiscal Year 2017.” The current iteration of that meaning is that countries are considered “developing” if they are not “high income” on the World Bank classification of countries. Argentina, Barbados, Chile, and Trinidad and Tobago are all “high income” this year.

The World Bank’s definition is not the only option, and may not be the best one for US purposes. In fact, the Bank’s current approach only dates to 2016, when it abandoned its dichotomous categorization of countries as “developed” or “developing” but maintained country groupings by income (lower income, lower middle income, upper middle income and high income). Two other multilateral institutions, the International Monetary Fund and the United Nations, both treat “developing” as a residual category. The IMF defines “emerging and developing countries” as a category made up of countries that are not “advanced.” The United Nations has no established rule for determining whether a country is a developing country or not. It considers Europe, North America, Australia, Japan and New Zealand as “developed” and all others as “developing” or “in transition.” (Both systems are explained in an IMF working paper available here.)

Adopting a wider definition of “developing country” might give the US more leeway in implementing security cooperation in Latin America. In particular, given that many US partners in the region are middle-income countries it is important for the Department of Defense to adopt a definition that would include them. The hardest tests for this definition are Chile and Mexico, both key partners in the region as Secretary Mattis highlighted in his recent visit. Chile and Mexico are both middle-income countries and members of the Organization for Economic Cooperation and Development, another standard sometimes used in classifying countries as “developed” and “developing.” (Mexico joined in 1994 and Chile in 2010.)

Given that the intent of US security cooperation is to build the capacity of foreign partners to respond to shared challenges, it is important that DoD adopt a definition that effectively allows it to work towards this goal. One of the broadest possible groupings would be to adopt the World Trade Organization’s definition. The WTO doesn’t have criteria by which to classify countries and instead relies on each member state to announce for themselves whether they are a developing country are not. Some of the results are odd: Turkey and South Korea are developing countries in the WTO. Yet results might be beneficial for the US relationship with Latin America as Mexico and Chile also announce themselves as “developing” in this forum. Since the ultimate goal of defining developing countries for US security cooperation is to scope out who wants and needs financial assistance, it might make the most sense to adopt the WTO’s definition, which was also driven by a need to distribute benefits.

These definitional challenges will be familiar to scholars, who adopt myriad definitions of “developing country” in their research and often don’t specify what the criteria were for including certain countries in the analysis but not others. Even journals specialized in the study of these cases, such as the Journal of Development Studies, do not provide definitions of what the term means. While adopting one universal definition of “developing country” seems unlikely, moves in this direction would make it clearer to whom research findings apply, in that way perhaps facilitating the use of these findings in the policy world. The case of US security cooperation suggests why these issues matter, and should encourage both scholars and policymakers to think carefully about the definitions they choose.

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