Unrealistic Use of Loans To Support Foreign Military Sales
ID-83-5
Published: Jan 19, 1983. Publicly Released: Jan 19, 1983.
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Highlights
GAO reviewed the security assistance programs to determine whether these programs are tailored to the ability of recipient countries to pay for their military imports.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| Congress should: (1) place the entire foreign military sales program on-budget in the International Affairs account to reflect true budgetary costs; and (2) provide funds to the Guaranty Reserve Fund that establishes a level based on the nature and size of its current contingent liability covered by the Fund. | When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. | |
| Congress should: (1) approve a flexible security assistance financing program that recognizes the potential financial burden placed on the economies of developing countries by military imports; and (2) amend the Arms Export Control Act to allow for low-interest direct loans to have maturities up to 30 years for those countries facing short- and medium-term economic problems. | When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. |
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Topics
BudgetingDeveloping countriesExportingForeign military assistanceForeign military salesInterest ratesLoan defaultsLoansLoan guaranteesBudgets