China, Russia, Saudi Arabia Boosted Defense Most as U.S. Cut

[Khalid Newazi]

Chinese, Russian and Saudi Arabian defense spending increased the most last year, while U.S. expenditures declined, according to a report by the Stockholm International Peace Research Institute.

China’s defense spending rose 9.7 percent from a year earlier to $216 billion, and Russia’s increased 8.1 percent to $84.5 billion, the research group said in its annual report on global defense spending adjusted for inflation. Saudi Arabia had the biggest percentage increase among the top 15 spenders worldwide, rising 17 percent to $80.8 billion.

While the U.S. remains by far the world’s largest military spender, its expenditures in 2014 dropped 6.5 percent to $610 billion, reflecting a 20 percent decrease since 2010, according to the report.

The figures reflect intensifying global turmoil. Russia’s March 2014 annexation of Crimea sparked a conflict in Ukraine, and tensions simmer over territorial disputes in the East China Sea and South China Sea. Saudi Arabia continues to arm militants in Syria, joined a U.S.-led coalition against Islamic State, and last month launched airstrikes against Iranian-backed rebels in Yemen.

The data don’t reflect the sharp fall in oil prices in late 2014, and it’s unclear what effect that may have, the institute said in the report.

Many oil-producing countries in the Middle East such as Saudi Arabia are expected to be able to withstand any impact thanks to the “strong financial reserves” they accumulated during several years of high oil prices, according to the report.

Russian Economy
That’s not the case for Russia, which planned its spending boost before the start of the crisis in Ukraine. The Kremlin already has cut its planned expenditures for this year in consideration of its battered economy, the institute said.

“Falling oil and gas prices and economic sanctions have reduced state income dramatically and led to a major devaluation of the ruble,” the group said in a fact sheet on the impact of the Ukraine crisis on defense expenditures in Europe. “As a result, the initial defense budget for 2015, which was 4.2 trillion rubles ($69 billion), was cut by around 5 percent in the revised budget presented in March 2015, which made cuts to almost all budget lines.”

NATO Versus Russia
Russia still expects to have a substantial increase in total military spending for 2015 —- about 15 percent in real terms —- to 4 trillion rubles, according to the fact sheet. It said that almost all of the boost “is earmarked for procurement, which is set to increase by over 60 percent in 2015 and to remain at this higher level in 2016 and 2017.”

By contrast, North Atlantic Treaty Organization nations are unlikely to increase their spending to meet the required target of 2 percent of GDP, according to the fact sheet. Most of Western and Central Europe will see a downward trend from continued austerity policies while Baltic, Nordic and Eastern European countries that border Russia boost expenditures to withstand the Russian threat.

China’s military spending has generally kept pace with its economic growth rate, remaining a fairly steady share of GDP of 2 percent to 2.2 percent over the past decade, Sipri said.

Sipri’s estimate for China was about 66 percent above the official Chinese number of 808.2 billion yuan ($130.2 billion) for the year. Sipri has said in the past its figures take into account items including military research and development, arms imports, military construction and People’s Liberation Army pension costs that aren’t included in the official budget.

Japan spent about the same amount it did in 2013, dropping in rank to the world’s ninth-largest spender, according to the report. India took Japan’s place last year as the seventh-largest.

China, Russia, Saudi Arabia Boosted Defense Most as U.S. Cut - Bloomberg Politics

 

[Khalid Newazi]

Ukraine crisis impacts spending in eastern part of Europe

The conflict in Ukraine is prompting many European countries near Russia, in Central Europe, the Baltics and the Nordic countries, to increase military spending, often revising previous plans and reversing falling trends. However, there is less sign of a similar trend in the rest of Western Europe, despite the North Atlantic Treaty Organization (NATO) asking its member states to spend 2 per cent of GDP on military spending. The five biggest spenders in Western Europe—France, the United Kingdom, Germany, Italy and Spain—have all budgeted for further cuts, albeit mostly small, in 2015. However, Germany has announced the intention to increase spending in the medium term.

Ukraine increased spending by over 20 per cent in 2014 and plans to more than double
spending on the armed forces in 2015. Russia is also budgeting for increased spending in 2015, but this was planned before the Ukraine conflict. In fact, the original Russian military
budget for 2015 has been reduced by 5 per cent due to decreased revenues from the fall in
oil prices in late 2014. Still, the revised budget is a significant increase on spending in 2014.

‘The Ukraine crisis has fundamentally altered the security situation in Europe, but so far the impact on military spending is mostly apparent in countries bordering Russia. Elsewhere, austerity remains the main driver of downward spending trends’, said Dr Perlo-Freeman.



China’s increase leads Asian trend

Military expenditure in Asia and Oceania rose by 5 per cent in 2014, reaching $439 billion. The increase is mostly accounted for by a 9.7 per cent increase by China, which spent an estimated $216 billion. Among the other major spenders, Australia increased its spending by 6.7 per cent, with smaller increases by South Korea and India of 2.3 and 1.8 per cent, respectively, while Japan’s spending remained steady. Viet Nam, which has had tensions with China over territorial disputes in the South China Sea, increased its spending by 9.6 per cent. Conversely, Indonesia, a fellow South China Sea-littoral state, broke its trend of several years of increases with a 10 per cent cut in 2014.



Other notable developments

• In Latin America, Brazil’s spending fell slightly due to economic difficulties, while crisis-hit Venezuela had the largest fall in the region of 34 per cent. Meanwhile, Mexico increased its spending by 11 per cent due to the ongoing war with drug cartels.

• The economic burden of military spending has increased in some regions, with the number of countries spending more than 4 per cent of their GDP on the military increasing from 15 to 20 in 2014. Only three of these countries have functioning democratic systems of government.

• Military spending in Africa increased by 5.9 per cent, with the top two spenders Algeria andAngola, both major oil producers, increasing their spending by 12 and 6.7 per cent, respectively.

• It is unclear what impact the sharp fall in the price of oil in late 2014 may have on the large rises in military spending that have taken place in many oil producing countries in the Middle East, parts of Africa and Asia, and Russia among others. While some producers, such as Saudi Arabia, have built up large financial reserves that will enable them to withstand lower prices for some time, others may be more affected, and indeed Russia has already cut its military spending plans for 2015 as a result.

13 Apr. 2015: US military spending falls, increases in eastern Europe, Middle East, Africa and Asia says SIPRI — www.sipri.org

 

[Bornubus]

Wow

KSA Def Budget is $80 Billion and 10% of the GDP and still need others support to fight Local Militia

while India spends $40 + 10 = 50 ~ Billion, around 2% ~ of GDP and we have to prepare for a two front war

 

[Khalid Newazi]

Wow

KSA Def Budget is $80 Billion and 10% of the GDP and still need others support to fight Local Militia

while India spends $40 + 10 = 50 ~ Billion, around 2% ~ of GDP and we have to prepare for a two front war

Your defence spending is 2.4% and the difference between India and Saudi Arabia is Saudi Arabia need to hugely rely on equipment at war and their Military lacks the proper training and incentive to fight.

BTW 2 front war is a theoretical scenario, nothing real.