World Military Spending

Global military expenditure stands at over $1.7 trillion in annual expenditure at current prices for 2012. It fell by around half a percent compared to 2011 — the first fall since 1998.

(1991 figures are unavailable. Chart uses 2011 constant prices for comparison.)

Summarizing some key details from the Stockholm International Peace Research Institute (SIPRI)’s Year Book 2013 summary on military expenditure¹:

• World military expenditure in 2012 is estimated to have reached $1.756 trillion;
• This is a 0.4 per cent decrease in real terms than in 2011 — the first fall since 1998;
• The total is still higher than in any year between the end of World War II and 2010;
• This corresponds to 2.5 per cent of world gross domestic product (GDP), or approximately $249 for each person in the world;

The USA with its massive spending budget, has long been the principal determinant of the current world trend, often accounting for close to half of all the world’s military expenditure. The effects of global financial crisis² and the post-Iraq/Afghanistan military operations have seen a decline in its spending, now accounting for 39% of spending in 2012.

SIPRI has commented in the past on the increasing concentration of military expenditure, i.e. that a small number of countries spend the largest sums. This trend carries on into 2012 spending. For example,

• The 15 countries with the highest spending account for over 81% of the total;
• The USA is responsible for 39 per cent of the world total, distantly followed by the China (9.5% of world share), Russia (5.2%), UK (3.5%) and Japan (3.4%)

Military spending is concentrated in North America, Europe, and increasingly, Asia:

But as recent figures have shown, there is a shift in expenditure — from austerity-hit Western Europe and reduced spending by the US, to increased spending in Eastern Europe and Asia.

The global financial and economic crisis³ resulted in many nations cutting back on all sorts of public spending, and yet military spending continued to increase. Only in 2012 was a fall in world military expenditure noted — and it was a small fall. How would continued spending be justified in such an era?

Before the crisis hit, many nations were enjoying either high economic growth or far easier access to credit without any knowledge of what was to come.

A combination of factors explained increased military spending in recent years before the economic crisis as earlier SIPRI reports had also noted, for example:

• Foreign policy objectives
• Real or perceived threats
• Armed conflict and policies to contribute to multilateral peacekeeping operations
• Availability of economic resources

The last point refers to rapidly developing nations like China and India that have seen their economies boom in recent years. In addition, high and rising world market prices for minerals and fossil fuels (at least until recently) have also enabled some nations to spend more on their militaries.

China, for the first time, ranked number 2 in spending in 2008.

But even in the aftermath of the financial crisis amidst cries for government cut backs, military spending appeared to have been spared. For example,

For many in Western Europe or USA at the height of the financial crisis, it may have been easy to forget the global financial crisis, was primarily a Western financial crisis (albeit with global reverberations). So this helps explains partly why military spending did not fall as immediately as one might otherwise think. As SIPRI explains:

• Some nations like China and India have not experienced a downturn, but instead enjoyed economic growth
• Most developed (and some larger developing) countries have boosted public spending to tackle the recession using large economic stimulus packages. Military spending, though not a large part of it, has been part of that general public expenditure attention (some also call this Military Keynesianism
• Geopolitics and strategic interests are still factors to project or maintain power: rising military spending for the USA, as the only superpower, and for other major or intermediate powers, such as Brazil, China, Russia and India, appears to represent a strategic choice in their long-term quest for global and regional influence; one that they may be loath to go without, even in hard economic times, SIPRI adds.

For USA’s 2012 military expenditure, for example, although there is fall, it is primarily related to war-spending (Iraq and Afghanistan operations primarily). But the baseline defense budget, by comparison, is largely similar to other years (marking a reduction in the rate of increased spending).

By contrast, when it comes to smaller countries — with no such power ambitions and, more importantly, lacking the resources and credit-worthiness to sustain such large budget deficits — many have cut back their military spending in 2009, especially in Central and Eastern Europe. (Perlo-Freeman, Ismail and Solmirano, pp.1 – 2)

Natural resources have also driven military spending and arms imports in the developing world. The increase in oil prices means more for oil exporting nations.

The natural resource curse has long been recognized as a phenomenon whereby nations, despite abundant rich resources, find themselves in conflict and tension due to the power struggles that those resources bring (internal and external influences are all part of this).

In their earlier 2006 report⁵ SIPRI noted that, Algeria, Azerbaijan, Russia and Saudi Arabia have been able to increase spending because of increased oil and gas revenues, while Chile and Peru’s increases are resource-driven, because their military spending is linked by law to profits from the exploitation of key natural resources.

Also, China and India, the world’s two emerging economic powers, are demonstrating a sustained increase in their military expenditure and contribute to the growth in world military spending. In absolute terms their current spending is only a fraction of the USA’s. Their increases are largely commensurate with their economic growth.

The military expenditure database⁶ from SIPRI also shows that while percentage increases over the previous decade may be large for some nations, their overall spending amounts may be varied.

(See also this summary of recent trends⁷, also from SIPRI. The latest figures SIPRI uses are from 2012, and where necessary (e.g. China and Russia), include estimates.)

In a similar report from 2004⁸, the SIPRI authors also noted that, There is a large gap between what countries are prepared to allocate for military means to provide security and maintain their global and regional power status, on the one hand, and to alleviate poverty and promote economic development, on the other.

Indeed, compare the military spending with the entire budget of the United Nations:

The UN was created after World War II with leading efforts by the United States and key allies.

• The UN was set up to be committed to preserving peace through international cooperation and collective security¹⁰.
• Yet, the UN’s entire budget is just a tiny fraction of the world’s military expenditure, approximately 1.8%
• While the UN is not perfect and has many internal issues that need addressing¹¹, it is revealing that the world can spend so much on their military but contribute so little to the goals of global security, international cooperation and peace.
• As well as the above links, for more about the United Nations, see the following:
  • This web site’s section on the United Nations and Development¹² looks at its role in fighting poverty and other issues, plus some of the problems it faces.
  • The United Nations web site¹³

At the current level of spending, it would take just a handful of years for the world’s donor countries to cover their entire aid shortfall, of over $4 trillion in promised official aid since 1970¹⁴, 40 years ago.

Unfortunately, however, as the BBC notes, poverty fuels violence and defense spending has a tendency to rise during times of economic hardship. The global financial crisis¹⁵ is potentially ushering in enormous economic hardship around the world.

The Global Peace Index¹⁷ that the BBC is referring to is an attempt to quantify the difficult-to-define value of peace and rank countries based on over 20 indicators using both quantitative data and qualitative scores from a range of sources. Here is a summary chart from their latest report:

Their introductory video also notes that peace isn’t just the absence of weapons; it is the result of an approach to development in general:

(The top ranking nations on the global peace index were, Iceland, Denmark, New Zealand, Austria, Switzerland, Japan, Finland, Canada, Sweden and Belgium. It is worth looking at the report for the full list of indicators used, which cover a mixture of internal and external factors, weighted in various ways.)

Generally, US military spending has been on the rise. Recent increases are attributed to the so-called War on Terror and the Afghanistan and Iraq invasions, but it had also been rising before that.

For example, Christopher Hellman, an expert on military budget analysis notes in The Runaway Military Budget: An Analysis²³, (Friends Committee on National Legislation, March 2006, no. 705, p. 3) that military spending had been rising since at least 1998, if not earlier.

The US Department of Defense provides a breakdown of military spending since 2001:

• Overall spending
• Defense budget vs War spending
• Raw data and sources

Overall spending

Defense budget vs War spending

Raw data and sources

US Defense Spending 2001-2014

Year	National defense budget ($bn)	War Supplemental($bn)	Other	Total military spending ($bn)
Source: Growth in U.S. Defense Spending Since 2001 24, US Department of Defense FY2014 Budget Request, April 2013. Note: Numbers may not add up due to rounding. Figures include Department of Defense spending (which includes non-war supplemental appropriations for some years) and the costs of the wars in Afghanistan and Iraq. Department of Energy’s nuclear weapons program are not included and typically range from $21bn – $25bn each year. FY14 figure is the requested budget. Other includes non-war supplemental appropriations, e.g. funding needed in base budget for fuel costs, hurricane relief, and other disaster relief. Laicie Olson from the Center for Arms Control provides further information and analysis25.
2014	527	88		615
2013	528	87	0.1	615
2012	530	115		645
2011	528	159		687
2010	528	162	1	691
2009	513	146	7	666
2008	479	187		666
2007	431	166	3	601
2006	411	116	8	535
2005	400	76	3	479
2004	377	91	0.3	468
2003	365	73		438
2002	328	17		345
2001	287	23	6	316

The decline seen in later years was initially mostly due to Iraq war reduction and redeployment to Afghanistan, followed by an attempt to scale down Afghanistan operations, too. The baseline budget, however, showed continued increase until only recently, albeit at a seemingly lower rate. In addition, the effects of the global financial crisis²⁶ has started to be felt now.

The frustration of confusing numbers seemed to hit a raw nerve for the Center for Defense Information, concluding

Using the SIPRI military expenditure database²⁹ we see the breakdown described earlier:

• As a pie chart
• Since 2001
• US vs. others
• Top spenders (and sources)

As a pie chart

The US alone accounts for over two-fifths (or just under half) of the world’s spending:

Since 2001

World spending has risen since 2001. Both the US and other top spenders have influenced that rise.

Spending since 2001

US vs. others

• US military spending accounts for 39 percent, or almost two-fifths of the world’s total military spending
• US military spending is almost 4 times more than China, almost 8 times more than Russia, and about 70 times more than Iran.
• US military spending is some 54 times the spending of Cuba, Iran, and Syria) whose spending amounts to around $12-13 billion, which is mostly Iran
• US spending is almost as much as than the next top 11 countries.
• The United States and its strongest allies (the NATO countries, Japan, South Korea and Australia) spend something in the region of $1.2 trillion on their militaries combined, representing over 70 percent of the world’s total.
• The Iran, Syria, Russia, and China together account for about $260 billion or 39% of the US military budget.

Top spenders (and sources)

Military spending in 2012 ($ Billions, and percent of total)

Country	Dollars (billions)	% of total	Rank
Source: The 15 countries with the highest military expenditure in 2012 30, SIPRI, 2013 Note: Due to rounding, some percentages may be slightly off. If you are viewing this table on another site, please see http://www.globalissues.org/article/75/world-military-spending31 for further details.
United States	711	39.0%	1
China	166	9.5%	2
Russia	91	5.2%	3
United Kingdom	61	3.5%	4
Japan	59	3.4%	5
France	59	3.4%	6
Saudi Arabia	57	3.2%	7
India	46	2.6%	8
Germany	46	2.6%	9
Italy	34	1.9%	10
Brazil	33	1.9%	11
South Korea	32	1.8%	12
Australia	9	1.5%	13
Canada	23	1.3%	14
Turkey	18	1.0%	15
Rest of world	321	18.2%
Global Total (not all countries shown): 1,753

Commenting on the earlier data, Chris Hellman noted that when adjusted for inflation the request for 2007 together with that needed for nuclear weapons the 2007 spending request exceeds the average amount spent by the Pentagon during the Cold War, for a military that is one-third smaller than it was just over a decade ago.³²

Supporters of America’s high military expenditure often argue that using raw dollars is not a fair measure, but that instead it should be per capita or as percentage of Gross Domestic Product (GDP), and even then the spending numbers miss out the fact that US provides global stability with its high spending and allows other nations to avoid such high spending.