Oscar Arias has a modest proposal.

If Latin American governments want to keep spending taxpayers’ money on military equipment, the former Costa Rican president and Nobel laureate thinks they should at least disclose how much they are spending and why.

Most Latin American governments are, in fact, allocating a significant chunk of their budgets to defense—even though none of them is believed to be at serious risk of going to war. According to Arias, figures compiled by the United Nations indicate that Latin American governments spend, on average, 75 percent as much on defense as their counterparts in the industrialized world, measured as a percentage of overall public spending. By way of comparison, Latin America spends only 50 percent as much as the industrial world on public health.

Coming from the one country in Latin America that chooses not to have armed forces, Arias can be expected to take issue with these spending patterns. “When military budgets are disproportionately large in comparison to health budgets—as is the case in many of our countries—the poor are denied the opportunity to lead a healthy life,” he said during a recent speech at IDB headquarters in Washington, D.C. “When governments put more of a priority on barracks than on schools, they impoverish children’s future.”

But Arias is even more troubled by the fact that many of the region’s citizens have no idea of how much their governments are spending on defense. That is because "nearly half" of the region’s governments keep their military budgets secret, according to Arias.

Such secrecy is an affront to the financial transparency that Arias considers "one of the fundamental values of leadership" and an essential component of good government. "Secrecy is a form of corruption, even when it is not used to hide the illegal enrichment of people in government," he said in his speech. "I believe the attitude of governments that abuse power by keepingthe people in the dark as to the use of public funds is a corrupt attitude."

Without detailed information about military spending, citizens and their representatives in parliament cannot have a meaningful debate about whether such spending is "commensurate with security or self-defense needs, or whether it is actually excessive and is consequently diverting resources that should be dedicated to human development," Arias said.

Arias believes that multilateral institutions like the IDB, the World Bank and the International Monetary Fund should also be concerned about secrecy. "How can we be sure that resources intended for the development of the region’s countries will be used in the best possible way, if governments refuse to disclose how they use significant parts of their national budgets?", he asked.

While acknowledging that institutions like the IDB are barred from interfering in the internal policies of their member countries, Arias argued that the Bank’s commitment to improving "governability" and fostering social development in the region gives it a responsibility to speak out on the issue of military spending. In fact, he went so far as to propose that "the IDB loans be made conditional on the transparency with which manages its military budget, or better yet, on the transfer of a part of those resources to education and health."

Arias’ remarks come at a time when concern over a regional Latin American arms race is once again in the news, as the U.S. debates lifting restrictions on purchase of sophisticated combat aircraft and weaponry by the region’s governments.

To read a full-length version of Arias’ speech, in Spanish, click on the link at right.