Military Expenditures Remain Near Peak

Billions of Constant 2011 Dollars Military Expenditures Remain Near Peak Michael Renner November 19, 2013 I n 2012, world military expenditures ran to $1,740 billion, expressed in constant 2011 dollars ($1,753 billion in current prices). 1 According to the World Military Expenditure Database of the Stockholm International Peace Research Institute (SIPRI), this is just slightly below the peak value of $1,749 billion in 2011, but still higher than in any other year since the end of World War II. 2 The A lack of transparency limits data availability for some countries. Excluding the four countries for which there are no consistent data over the years (Afghanistan, Honduras, Iraq, and Qatar), SIPRI offers a time series of global military spending for the past 25 years. After the end of the cold war, spending declined by about one third, from $1,613 billion in 1988 to $1,053 billion in 1996. 3 But it did not take long for budgets to bottom out and grow again. Starting in 1998 and particularly following the September 2001 attacks in the United States, military budgets were resurgent, expanding by 65 percent. 4 (See Figure 1.) A variety of factors drive military expenditures, although the precise circumstances and motivations differ substantially across the world. In some countries warfare against either a neighboring country or a domestic opponent is the key driver. Other countriess maintain considerable military establishments even though they face little prospect of attack. Deterrence is often invoked as a key reason, but some countries like the United States, the United Kingdom, and France routinely intervene in the affairs of other countries. 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Figure 1 World Military Expenditures, 1988 2012 1988 1991 1994 1997 2000 2003 2006 2009 2012 Source: SIPRI vitalsigns.worldwatch.org 1

Billions of Current Dollars 450.0 400.0 350.0 300.0 Figure 2 Sales by the World's 100 Largest Arms Manufacturers, 2002-2011 All Others Russia Western Europe United States 250.0 200.0 150.0 100.0 50.0 0.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: SIPRI The manufacturers of armaments producing anything from conventional weapons like tanks, missiles, and fighter jets to nuclear weapons and drones, as well as related services are powerful proponents of large military spending. In current dollar terms, sales by the world s leading 100 companies more than doubled in the last decade to $410 billion in 2011, but after inflation they rose by 51 percent. 5 (See Figure 2.) In 2011, U.S. companies accounted for close to 60 percent of these sales; West European firms had 29 percent of sales and Russian firms had 3.5 percent, with companies from all other countries (except China, for which comparable and accurate information is not available) contributing just 7.8 percent ($31.3 billion). 6 During 2012, military budget trends varied widely among different countries and regions. In absolute terms, Russia (spending $12.3 billion more than in 2011), China ($11.4 billion), and Saudi Arabia ($5.7 billion) revved up their budgets the most. 7 Also prominent among the countries that increased their expenditures were Oman ($2.2 billion), Indonesia ($1.3 billion), and Colombia ($1.1 billion). 8 By contrast, the biggest decrease in expenditures occurred in the United States ($42.6 billion less). 9 A large number of European countries cut their budgets due to economic distress, including Italy ($2 billion), Spain ($1.8 billion), the Netherlands ($900 million), and Portugal ($800 million). 10 Among the other significant cutters were India ($1.4 billion) which reversed its previously rapid pace of increased spending Australia ($1.1 billion), and Canada ($900 million). 11 But in relative terms, other countries stand out. Zimbabwe raised its military spending by 53 percent, followed by Oman (51 percent), Paraguay (42 percent), Venezuela (39 percent), and Kazakhstan (30 percent). 12 The biggest cutters were Uganda ( 57 percent), South Sudan ( 42 percent), and Hungary ( 20 percent). 13 vitalsigns.worldwatch.org 2

Billions of 2011 Dollars Figure 3 Countries with Largest Military Expenditures, 2012 (Billions of US Dollars) United States China Russia United Kingdom Japan France Saudi Arabia India Germany Italy Source: SIPRI For the past quarter-century the United States has been the world s military colossus. During those years, it routinely accounted for more than 40 percent of global expenditures, but in 2012 that figure declined to 39 percent. 14 Nonetheless, no other country comes even close. At $682.5 billion in 2012 (current dollars), the United States spends as much as the next 11 countries combined ($683.4 billion), with the rest of the world beyond these 12 accounting for a comparatively small $387.3 billion. 15 (See Figure 3.) $700.00 Figure 4 U.S. Military Expenditures, 1950-2012 $600.00 $500.00 $400.00 $300.00 $200.00 $100.00 $- 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Source: DOD vitalsigns.worldwatch.org 3

In 2012 governments spent on average $249 on weapons and soldiers for each person on the planet. Following the United States, the largest spenders are China at an estimated $166 billion, Russia ($91 billion), the United Kingdom ($61 billion), Japan ($59 billion), France ($58 billion), Saudi Arabia ($57 billion), India ($46 billion), Germany ($46 billion), Italy ($34 billion), Brazil ($33 billion), and South Korea ($32 billion). 16 So large a spender is the United States that the reduction in its 2012 budget was almost equal to the entire military budget of the ninthlargest spender, Germany. 17 Since the end of World War II, U.S. military spending has gone through tremendous up and down swings, with peaks marked by wars in Korea and Vietnam in the early 1950s and late 1960s, followed by a buildup near the end of the cold war in the late 1980s, and most recently the massive expansion undertaken in the name of the war on terror and the invasions of Afghanistan and Iraq. 18 (See Figure 4.) Unparalleled in the world, the United States maintains bases or has some other military presence in almost every country. As of July 2013, the country had about 164,000 soldiers stationed abroad, in addition to 1.2 million military personnel at home and in U.S. territories. 19 (See Table 1.) Close to 140,000 people were involved in contingency operation deployments related to the wars in Afghanistan and Iraq as of mid-2013. 20 Countries in conflict-ridden areas are among those that spend the most on the military relative to their economic means. Saudi Arabia tops the list with 8.9 percent of gross domestic product (GDP) absorbed by military budgets in 2012, with South Sudan and Oman (each at 8.4 percent) and Israel (6.2 percent) close behind. 21 The United States and Russia both spend 4.4 percent of their GDP on the military, whereas India (2.5 percent) spends at the global average level. 22 SIPRI estimates China s share at 2 percent. 23 At a time when endemic poverty, mass unemployment, health epidemics, and the looming threats of climate change cry out for greater attention, the continued largesse for military purposes in many countries reflects a troubling set of priorities. 24 In a world where 2.4 billion people struggle to survive on $2 per day or less (hardly changed from 2.6 billion in 1981), in 2012 governments spent on average $249 on weapons and soldiers for each person on the planet. 25 The $1,234 billion that high-income countries spent on military programs in 2012 is more than nine times the $133.7 billion they allocated for development assistance. 26 As rich-poor divides widen in wealthy countries, military priorities there deserve greater scrutiny. According to the Friends Committee on National Legislation, 37 out of each dollar of U.S. federal government spending in 2012 went to pay for past and current wars. 27 By contrast, 19 went to health care, 15 to anti-poverty efforts, 6 to jobs and economic development, 3 to energy, science, and environment, 2 to education and social programs, and another 2 to diplomacy, international aid, and support for the United Nations and other international agencies. 28 Although it may now have peaked, the surge in military budgets is part of a larger worrisome trend toward increasing spending on a wide range of measures undertaken in the name of security and on closely entwined issues such as counter-terrorism and anti-narcotics campaigns. This includes vitalsigns.worldwatch.org 4

expanding internal security bureaucracies (such as the Department of Homeland Security in the United States), the militarization of civilian police departments, and ever-expanding intelligence and surveillance efforts directed at political adversaries, economic competitors, and civilian populations alike. For most countries, and especially for Russia and China, there is no publicly available information about intelligence budgets and similar measures. But the United States likely devotes the most resources of any country to such purposes. The country s 16 intelligence agencies requested a combined budget of $52.6 billion for 2013, down from the 2011 peak of $54.6 billion. 29 The agencies employ more than 107,000 people (including about 84,000 civilian government employees and more than 23,000 military personnel) and almost 22,000 private contractors. 30 A Washington Post investigation found that some 854,000 people have top-secret government security clearances in the United States and that analysts publish as many as 50,000 intelligence reports each year. 31 Governments have created a large and well-funded apparatus of security agencies, but in numerous ways have failed to address many of the underlying reasons for the world s conflicts and instabilities. Table 1. U.S. Military Deployments Worlwide, July 2013 Region Military Personnel United States And Territories 1,208,083 Europe 69,065 East Asia and Pacific 51,259 Undistributed * 37,352 Middle East and North Africa 4,389 Central and South America 1,788 Sub-Saharan Africa 269 Former Soviet Union 78 South Asia 51 Total 1,372,334 *Afghanistan, Iraq, Kuwait, South Korea, and undisclosed locations. Source: U.S. Departmetn of Defense, at www.dmdc.osd.mil/appj/dwp/reports.do?category=reports&subcat=milactdutreg. Michael Renner is a Senior Researcher at the Worldwatch Institute Vital Signs Online provides business leaders, policymakers, and engaged citizens with the latest data and analysis they need to understand critical global trends. Subscribe now for full access to hard data and research-based insights on the sustainability trends that are shaping our future. Worldwatch Institute 1400 16 th St., NW, Suite 430 Washington, DC 20036 Phone: 202.745.8092 vitalsigns.worldwatch.org vitalsigns.worldwatch.org 5

Notes 1 Unless otherwise noted, all monetary terms are expressed in constant 2011 dollars. Stockholm International Peace Research Institute (SIPRI), SIPRI Military Expenditure Database, at www.sipri.org/research/armaments/milex/milex_database. 2 Ibid. 3 Ibid. 4 Ibid. 5 Susan T. Jackson, Key Developments in the Main Arms-Producing Countries, 2011 12, in SIPRI, SIPRI Yearbook 2013: Armaments, Disarmament and International Security (New York: Oxford University Press, 2013), p. 206; Figure 2 compiled from ibid. and from earlier SIPRI Yearbooks (2005 to 2012 editions). 6 Ibid., p. 228. 7 SIPRI, op. cit. note 1. 8 Ibid. 9 Ibid. 10 Ibid. 11 Ibid. 12 Sam Perlo-Freeman, Carina Solmirano, and Helén Wilandh, Global Developments in Military Expenditure, in SIPRI, op. cit. note 5, p. 131. 13 Ibid. 14 Ibid., p. 133. 15 Calculated from SIPRI, op. cit. note 1. 16 Ibid. 17 Calculated from ibid. 18 U.S. Department of Defense, Office of the Underscretary of Defense (Comptroller), National Defense Budget Estimates for FY 2014 (Washington, DC: May 2013). This publication reports budget figures in constant 2005 dollars, which have been translated into constant 2011 dollars to make them more comparable with the SIPRI data. 19 U.S. Department of Defense, Defense Manpower Data Center (DMDC), Active Duty Military Personnel by Service by Region/Country, as of 31 July 2013, at www.dmdc.osd.mil/appj/dwp/reports.do?category=reports&subcat=milactdutreg. 20 Ibid. 21 SIPRI, op. cit. note 1. 22 Ibid. 23 Ibid. 24 A list of various global social problems, with estimates for the number of people affected, has been compiled by Anup Shah, Poverty Facts and Stats, Global Issues, last updated 7 January 2013, at www.globalissues.org/article/26/poverty-facts-and-stats. 25 World Bank, Poverty Overview, at www.worldbank.org/en/topic/poverty/overview; Perlo- Freeman, Solmirano, and Wilandh, op. cit. note 12, p. 125. 26 High-income countries military spending from Perlo-Freeman, Solmirano, and Wilandh, op. cit. note 12, p. 129; development assistance data from Organisation for Economic Cooperation and Development, Net ODA from DAC Countries from 1950 to 2012, April 2013, at www.oecd.org/dac/stats/data.htm. 27 Friends Committee on National Legislation, Where Do Our Income Tax Dollars Go? at fcnl.org/assets/flyer/fcnl_taxes12.pdf. 28 Ibid. 29 Scott Shane, New Leaked Document Outlines U.S. Spending on Intelligence Agencies, New York Times, 29 August 2013; comparison to countries military budgets from SIPRI, op. cit. note 1. vitalsigns.worldwatch.org 6

30 Wilson Andrews and Todd Lindeman, $52.6 Billion: The Black Budget, Washington Post, 29 August 2013. 31 Dana Priest and William M. Arkin, A Hidden World, Growing Beyond Control, Washington Post, 19 July 2010. vitalsigns.worldwatch.org 7