Slight rise in global defence spending

If there is an annual report that is impatiently awaited every year, it is the Stockholm International Peace Research Institute (SIPRI) one on global military spending. And the figures of the 2016 edition published yesterday confirm a modest increase in global defence budgets, with an increase on 2015 of “only” 0.4% to US$1,686bn (€1,549bn), or … 2.2% of the world’s GDP.

 

According to SIPRI, this deceleration of expenditure is partly due to the fall in oil prices, which has forced oil producing countries to drastically reduce their military investments. As a result, the Middle East, for example, has seen an overall drop of 17% compared to 2015, despite the fact that all countries in the region (except Oman) are involved in at least one armed conflict. This regional trend is particularly noticeable in Iraq (-36%) and Saudi Arabia (-30%), which could be prolonged if U.S. oil production continues to rise and thus curb prices. Only Kuwait and Iran are doing well with a respective 16% and 17% increase in military spending, with Tehran largely benefiting from the lifting of international sanctions and the subsequent opening up of its economy.

So, where does this – very slight – rise for 2016 come from? Well, apart from Iran and Kuwait, and the U.S. and Chinese mastodons,

the countries with the largest relative increases in military spending between 2015 and 2016 are in Central Europe. Overall spending in Central Europe grew by 2.4% in 2016. “The growth in spending by many countries in Central Europe can be partly attributed to the perception of Russia posing a greater threat,” said Siemon Wezeman, Senior Researcher with the SIPRI AMEX programme. “This is despite the fact that Russia’s spending in 2016 was only 27% of the combined total of European NATO members.

Another continent, other threats: the countries of the Sahel which, confronted with Islamist terrorism, have consequently agreed to new budgetary efforts. Chad (+ 18%), Mali (+ 18%) and Senegal (+ 17%) are the main drivers of the 1.5% increase in military spending in the region.

The figures published by SIPRI reveal some changes among the top five defence spending countries. In fact, if the USA and China consolidate their respective first and second place positions, Russia recovers the 3rd place at the expense of Saudi Arabia. France, meanwhile, despite a military budget of $57.7 billion for 2016, is simply ejected from the Top 5 in favour of India.

 

In addition to this “classic” exercise, SIPRI has imagined what the national budgets of NATO members would look like if each one respected the recommended level of 2% of GDP devoted to defence. Despite an increase of 2.9% and a budget of $41.1bn in 2016, Germany, for example, would have to find an additional $18bn to reach the NATO level. But the difference is even more spectacular for Canada ($15bn) and Belgium ($4.1bn): both having to at least double their current budget if they wish to meet their commitment.