Tuesday, August 26, 2014

Global Military Spending

There are several ways to consider and compare global military spending. The most obvious way is to calculate total military spending and convert to US Dollars. Another important measure is to consider the level of spending as a percentage of a country's GDP. We start with the second way first. (See the end of the post for a definition of military spending)

I constructed this from a World Bank database (based on SIPRI Stockholm International Peace Research Institute figures). Comparing military spending as a percentage of GDP allows us to consider how much of economic growth is taken up with military expenditures.

While the United States has the world's largest military by far it ranks only 13th on the level of spending as a percentage of GDP. Importantly SIPRI doesn't construct figures for North Korea. Estimates for North Korea range from 20-33 per cent of GDP.


Rank Country            2013
1 Oman 11.48
2 Saudi Arabia 8.99
3 Afghanistan 6.24
4 Israel 5.63
5 Angola 5.01
6 Algeria 4.95
7 Azerbaijan 4.68
8 Lebanon 4.36
9 Russian Federation 4.19
10 Armenia 4.10
11 Yemen, Rep. 3.93
12 Morocco 3.90
13 United States 3.81
14 Bahrain 3.77
15 Jordan 3.56
16 Mauritania 3.56
17 Iraq 3.54
18 Colombia 3.44
19 Pakistan 3.39
20 Singapore 3.27
21 Kyrgyz Republic 3.24
22 Namibia 3.15
23 Ecuador 3.11
24 Swaziland 2.96
25 Ukraine 2.93
26 Zimbabwe 2.78
27 Georgia 2.74
28 Sri Lanka 2.71
29 Korea, Rep. 2.60
30 Brunei Darussalam 2.56
31 Greece 2.46
32 India 2.45
33 Turkey 2.33
34 United Kingdom 2.30
35 France 2.24
36 Burundi 2.24
37 Vietnam 2.18
38 Portugal 2.17
39 Serbia 2.17
40 Uganda 2.16
41 Lesotho 2.15
42 China 2.05
43 Botswana 2.02
44 Tunisia 2.01
45 Chile 1.96
46 Estonia 1.96
47 Kenya 1.95
48 Uruguay 1.87
49 Timor-Leste 1.81
50 Poland 1.79
51 Zambia 1.69
52 Egypt, Arab Rep. 1.67
53 Croatia 1.66
54 Australia 1.63
55 Cambodia 1.60
56 Paraguay 1.60
57 Bulgaria 1.58
58 Italy 1.58
59 Montenegro 1.57
60 Malaysia 1.55
61 Thailand 1.52
62 Bolivia 1.45
63 Nepal 1.43
64 Peru 1.42
65 Norway 1.41
66 Burkina Faso 1.41
67 Mali 1.41
68 Brazil 1.40
69 Congo, Dem. Rep. 1.40
70 Denmark 1.38
71 Bangladesh 1.37
72 Malawi 1.36
73 Belarus 1.35
74 Fiji 1.34
75 Germany 1.34
76 Cameroon 1.34
77 Romania 1.33
78 Gabon 1.32
79 Albania 1.30
80 Netherlands 1.29
81 Philippines 1.28
82 Finland 1.27
83 Kazakhstan 1.25
84 Honduras 1.24
85 Macedonia, FYR 1.24
86 Venezuela, RB 1.21
87 South Africa 1.17
88 Sweden 1.17
89 Tanzania 1.15
90 Bosnia and Herzegovina 1.13
91 Rwanda 1.11
92 El Salvador 1.10
93 Czech Republic 1.08
94 Guyana 1.07
95 Belize 1.04
96 Belgium 1.04
97 Benin 1.04
98 Seychelles 1.03
99 Canada 1.01
100 New Zealand 1.00
101 Japan 0.99
102 Spain 0.94
103 Indonesia 0.90
104 Jamaica 0.85
105 Ethiopia 0.82
106 Switzerland 0.78
107 Austria 0.78
108 Nicaragua 0.76
109 Liberia 0.75
110 Argentina 0.74
111 Mexico 0.62
112 Dominican Republic 0.61
113 Papua New Guinea 0.57
114 Ireland 0.55
115 Ghana 0.53
116 Madagascar 0.51
117 Luxembourg 0.51
118 Cabo Verde 0.50
119 Guatemala 0.48
120 Nigeria 0.47

US military spending has declined over recent years, whilst China's has increased. Since 2004 Chinese military spending has increased by 170 per cent, whilst its GDP Has increased by 140 per cent. Still China only spends 2.05 per cent of its GDP while the US spends 3.81 per cent. Japan, due to its pacifist constitution still spends just under 1 per cent. 

The table below constructed from SIPRI databases shows basic measure alluded to above of total military spending converted to US Dollars. It shows the top 60 military spenders in the world (New Zealand comes in at 60). 

Figures are in US$m. at 2013 prices and exchange rates. 

RankCountry 2013 
1USA                           640221
2China, P. R.                  188460
3Russia87836
4Saudi Arabia                  66996
5France                        61228
6UK                            57891
7Germany                       48790
8Japan                         48604
9India                         47398
10Korea, South                  33937
11Italy                         32657
12Brazil                        31456
13Australia                     23963
14Turkey                        19085
15Canada                        18460
16Israel                        16032
17Colombia                      13003
18Spain                         12765
19Taiwan                        10530
20Algeria                       10402
21Netherlands                   10328
22Singapore                     9759
23Poland                        9257
24Oman                          9246
25Iraq                          7896
26Indonesia                     7840
27Mexico                        7838
28Pakistan                      7641
29Norway                        7235
30Sweden                        6519
31Angola                        6095
32Greece                        5939
33Thailand                      5891
34Kuwait                        5815
35Chile                         5435
36Ukraine                       5338
37Venezuela                     5313
38Belgium                       5264
39Switzerland                   5053
40Malaysia                      4842
41Portugal                      4784
42Denmark                       4553
43Argentina                     4511
44Egypt                         4255
45South Africa                  4108
46Morocco                       4064
47Philippines                   3472
48Azerbaijan                    3440
49Viet Nam                      3387
50Finland                       3262
51Austria                       3230
52Peru                          2865
53Ecuador                       2803
54Kazakhstan                    2799
55Romania                       2521
56Nigeria                       2411
57Myanmar                       2211
58Czech Rep.                    2149
59Lebanon                       1936
60New Zealand                   1833


In terms of total military spending the US still dominates with 37 per cent of the total compared to China's 11 per cent. This means that China's spending is about 30 per cent of the US figure. 







Note that these figures are measured in US dollars meaning they are subject to the same problems of measurement outlined in How Big, How Rich, How Developed. Constructed on a PPP basis, Chinese military expenditure would be more substantial as a percentage of the total.

The table from the PDA (Project on Defense Alternatives) below shows different measures for military spending from SIPRI and IISS (International Institute for Strategic Studies).


What this table makes clear is that how we measure military expenditure matters for our perceptions about China's rise and US relative decline. However, it also seems reasonably clear that the US retains an overwhelming military dominance regardless of the measure. 

Australia, despite significant declines in spending as a percentage of GDP ranks as the 13th largest military spender. 




Given the Abbott government's focus on the seriousness of the Islamic terrorist challenge and promises made, it seems clear that military spending will rise in coming years as will expenditure on domestic policing and surveillance. 



Military expenditures data from SIPRI are derived from the NATO definition, which includes all current and capital expenditures on the armed forces, including peacekeeping forces; defense ministries and other government agencies engaged in defense projects; paramilitary forces, if these are judged to be trained and equipped for military operations; and military space activities. Such expenditures include military and civil personnel, including retirement pensions of military personnel and social services for personnel; operation and maintenance; procurement; military research and development; and military aid (in the military expenditures of the donor country). Excluded are civil defense and current expenditures for previous military activities, such as for veterans' benefits, demobilization, conversion, and destruction of weapons. This definition cannot be applied for all countries, however, since that would require much more detailed information than is available about what is included in military budgets and off-budget military expenditure items. (For example, military budgets might or might not cover civil defense, reserves and auxiliary forces, police and paramilitary forces, dual-purpose forces such as military and civilian police, military grants in kind, pensions for military personnel, and social security contributions paid by one part of government to another.)
Stockholm International Peace Research Institute (SIPRI), Yearbook: Armaments, Disarmament and International Security.

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