This fall follows drastic budget cuts undertaken by the United States and the European Union. It is, however, partially offset by the increase in military spending by rising powers such as Russia and China.
The economic downturn has forced the US and Europe to tighten their budgets and as a result involvement in military conflicts has been scaled back, specifically in Iraq and Afghanistan. The United States and its allies withdrew from Iraq more than a year ago and the same process is underway in Afghanistan, and is scheduled to be completed in late 2014.
Samuel Perlo-Freeman, director of SIPRI’s Military Expenditure and Arms Production Programme, suggested the trend should continue: “All the indications are that world military spending is likely to keep falling for the next two to three years — at least until NATO completes its withdrawal from Afghanistan at the end of 2014.”
The United States remains the biggest military spender in the world, with a budget about five times that of China. However, that budget decreased by more than six percent last year, meaning the US was responsible for less than 40 percent of the global total for military spending for the first time since the collapse of the Soviet Union 20 years ago.
The economic crisis continues
The Pentagon is continuing its efforts to save billions of dollars in costs by making cuts to several departments; newly appointed Secretary of Defense Chuck Hagel has warned the US military that there will be some more belt-tightening to come.
In Europe, under the pressure of the financial crisis that began in 2008, NATO members have reduced their spending by 10 percent.
Perlo-Freeman explained, “We are seeing what could be the beginning of a shift in the balance of global military spending of wealthy Western countries to emerging regions.”
Global military spending had dropped significantly after the end of the Cold War in the 1990s, but was increased dramatically again after the attacks on September 11. Despite the current decline, spending in the world today remains higher than during the Cold War.
Rise of China
The downward trend is in stark contrast to the changes observed in China. The world’s second largest economy has increased its military spending by 7.8 percent, so is $11.5 billion more than in 2012.
China’s military is currently equipping itself with new submarines, ships, missiles and a stealth fighter.
China has repeatedly said the world has nothing to fear from its military spending. But governments from Japan to Mumbai have voiced concerns about China’s growing capabilities and an apparent rise in military hostility.
Military spending in the Middle East and North Africa has increased by eight percent. The rise is directly related to the Syrian civil war and several other uprisings that took place in the region. Saudi Arabia and Oman make up a majority of the increase as they increase efforts to oppose any challenge by Iran.
In North Africa, countries such as Algeria have increased spending due to the ongoing threat posed by rebels in the country.
Latin America saw its military spending increase by 4.2 percent in 2012. Paraguay and Venezuela have seen the largest increases, each with a rise of more than 40 percent. In Mexico, the increase was 9.7 percent, a consequence of the increasing involvement of the army in the fight against drug cartels.
Finally, Russian military spending has increased by 16 percent in one year, by more than $12 billion, placing it third in the world. Vladimir Putin, who returned as head of state in May, is publicly open about his desire to increase Russian military power. In February, he told Russian state media: “The era demands a determined policy of strengthening the air and space defense systems (…) there can not be too much patriotism on this matter.”
SIPRI pointed out that the United States and its allies still account for the vast majority of global military spending, with NATO members spending close to a trillion dollars last year.