Global Military Spending: An Analyses

The Stockholm International Peace Research Institute (SIPRI) report released on 27 April 2020 indicates that the global military spending has hit new highs reaching $ 1917 billion in 2019.  The total represents an increase of 3.6 percent from 2018 and the largest annual growth in spending since 2010. The five largest spenders in 2019, which accounted for 62 percent of expenditure, were the United States, China, India, Russia and Saudi Arabia. This is the first time that two Asian states have featured among the top three spenders. The comprehensive annual update of the SIPRI Military Expenditure Database is accessible at http://www.sipre.org.

          The global military spending in 2019 represented 2.2 percent of the global gross domestic product (GDP), which equates to approximately $249 per person. ‘Global military expenditure was 7.2 per cent higher in 2019 than it was in 2010, showing a trend that military spending growth has accelerated in recent years,’ says Dr Nan Tian, SIPRI Researcher.

          Military spending by the United States grew by 5.3 percent to a total of $732 billion in 2019 and accounted for 38 percent of global military spending. The increase in US spending in 2019 alone was equivalent to the Germany’s total military expenditure for that year. ‘The recent growth in US military spending is largely based on a perceived return to competition between the great powers,’ says Pieter D. Wezeman, Senior Researcher at SIPRI.

          China and India were, the second and third largest military spenders. China’s military expenditure of $261 billion represented a 5.1 percent increase. India’s grew by 6.8 percent to $71.1 billion. ‘India’s tensions and rivalry with both Pakistan and China are among the major drivers for its increased military spending,’ says Siemon T. Wezeman, SIPRI Senior Researcher.In addition, Japan at $47.6 billion (ranked 9th) and South Korea at $43.9 billion (ranked 10th) were the other big spenders of the region. Saudi military spending represents 8 percent of the GDP, higher than all the major powers.

          Germany at $49.3 billion had an increase of 10 percent. This was the largest increase in spending among the top 15 military spenders in 2019. Germany has an increased threat perception from Russia. NATO’s total military spending reached $1.035 trillion in 2019. In 2019 Russia was the fourth-largest spender, and at $65.1 billion had an increase of 4.5 percent. Despite its stagnant economy, at 3.9 percent of its GDP, Russia’s military spending burden was among the highest in Europe in 2019,’ says Alexandra Kuimova, Researcher at SIPRI. Its soured relationship with the U.S. and NATO is the main factor driving Russian rearmament. There was practically no increase of  military spending by France and UK.

          Military expenditure in South America was relatively unchanged at $52.8 billion, with Brazil accounted for 51 percent of total military expenditure in the sub-region. The combined military expenditure of states in Africa grew by 1.5 percent to an estimated $41.2 billion in 2019. Military spending in South East Asia increased by 4.2 percent to reach $40.5 billion largely due to fears of Chinese expansion in the South China Sea.

          The average military spending was 1.4 percent of GDP for countries in the Americas, 1.6 percent for Africa, 1.7 percent for Asia and Oceania and for Europe and 4.5 percent for the Middle East.

          Clearly USA and China appear to be in an arms race, and together the two represent 52 per cent of global spending. Chinese defence spending has closely followed its rapid economic growth in last 25 years, and its ambition of a “world-class military”. They have openly stated their desire to one day surpass the United States. In the past year, China also surpassed Russia to become the world’s second-largest arms exporter, the Nezavisimaya Gazeta newspaper reported, citing SIPRI’s figures. As per Russian Deputy Defense Minister Alexander Fomin, Moscow’s weapons sales totaled $15 billion in 2019 and some 50 countries purchased Russian arms and military equipment last year, despite Washington warning that countries trading with Russia’s defense and intelligence sectors would face automatic sanctions under the U.S. law known as Countering America’s Adversaries Through Sanctions Act (CAATSA).

          India’s defence expenditure grew by 259% over the 30-year period of 1990–2019, and by 37% over the decade of 2010–19. However, as percentage of GDP, it fell from 2.7% of GDP in 2010 to 2.4% in 2019. India’s defence allocation in the 2020-21 budget is just Rs 3.37 lakh Crore, excluding defence pensions, and this amounts to just 1.5 percent of the country’s GDP, the lowest in recent times. In comparison, Pakistan’s military expenditure in 2010-19 decade rose by 70 percent to reach $10.3 billion. As percentage of GDP it rose from 3.4 percent in 2010 to 4.0 percent in 2019. Pakistan today is at 24th position in military spending. India is caught up between to hostile neighbours Pakistan and China. Also India is concerned with greater Chinese assertiveness in Indian Ocean region, and aggressive posturing on the land borders. Saudi Arabia has domination issues and has to balance Iran and Israel.

          With the still very active COVID 19 pandemic, and the severe economic fallout, the military spending growth trend may get reversed. With the world facing a recession, military spending would have to be weighed against other sectors, such as healthcare and education. However, considering the known rivalries, and beginning of a fresh Cold War, this reversal, if any, may not last long. Even after the financial crisis of 2008, when military expenditure dropped in many countries, but subsequently picked up in 2-3 years.