But the arms race may be over in Ecuador and Peru, whose presidents recently reached an agreement in a century-old border dispute and declared they would no longer spend their countries' resources on weapons. Instead, they hope to raise $3 billion to build and improve roads, bridges and housing.

Ecuador's president, Jamil Mahuad, has pledged to cut the country's military draft by 60 percent and convert a fourth of his country's 57,000-member armed forces into policemen. "Maybe if God permits I will be the first Ecuadorian president to have a full term without buying arms," he said.

Peruvian president Alberto Fujimori canceled plans to spend $1.5 billion on additional jet fighters, saying he would earmark the money for housing, education and improving the country's infrastructure. "Instead of an arms race, we are [starting] a disarmament race," he announced. (Source: Knight Ridder News Service.)