As the world digs out from the economic downturn of 2009, it seems that annual growth in global defense spending is back. Total global defense spending is seen increasing 0.6 percent from $1.538 trillion in 2013 to $1.547 trillion in 2014, according to a forecast released Tuesday in London from IHS Jane’s Aerospace, Defence & Security. If the forecast proves accurate, it will be the first time since 2009 that the world grew spending on military hardware and armies since 2009.
The top 20 spenders shelled out a combined $1.316 trillion on defense-related expenditures in 2013, with the United States making up just over 44 percent of that spending at $582.4 billion.
Countries in the Middle East, namely Saudi Arabia and Oman, and a regional arms race in Asia is fueling much of this expected growth as Europe still flounders in sovereign debt doldrums and the U.S. prunes spending from highs unseen since World War II if you include Afghanistan and Iraq.
“With military budgets among many of the major NATO nations due to continue to contract over the next 12 months, the center of gravity of defense expenditure is expected to continue to shift south and east in 2014, following the trend of global economic expansion,” said Paul Burton, director, IHS Jane’s Aerospace, Defence & Security, in a statement announcing the forecast. “Russia, Asia and the Middle East will provide the impetus behind the growth in global military spending expected this year and will drive the recovery projected from 2016 onwards.”
One of the more notable developments from 2013 was the increased spending of the Russian Federation, which pushed past the U.K. to become the third-largest spender after the U.S. and China. Russia is expected to boost spending 44 percent over the next three years. Meanwhile, No. 2 China is expected to spend more than Europe’s top three spenders (the U.K., France and Germany) by the end of next year. China’s growing military might is helping fuel a soft regional arms race. Asia Pacific is the only region that grew defense budgets between 2009 and 2014 as the world’s total saw annual declines.
“In Asia, the growth of defense budgets is accelerating and military procurements are rising,” said John Chipman, director-general and CEO of the London-based International Institute for Strategic Studies (IISS), during the launch Wednesday of the IISS’s annual assessment of the global military balance. “Most national defense budgets in the West contracted further and governments grappled with the need to balance financial imperatives against the reality of an uncertain strategic environment.”
Five of the world’s fastest growing defense budgets are located in the Middle East, according to IHS estimates. Saudi Arabia, in particular, concerned about protecting its monarchy and the country’s oil assets from extremist attacks and concerned about Iran’s influence on the region, has greatly boosted spending on military hardware, infrastructure and training. IHS ranks the largest Gulf Cooperation Council member as the ninth-largest defense spender in the world at $42.9 billion after increasing its defense budget an estimated 19 percent last year. The country is highly secretive about how much it spends on defense, so this is an educated estimate at best. The IISS puts Saudi Arabia’s defense budget much higher than the IHS, at $59.6 billion, which places the country as the fourth-largest spender.
As you can see from the chart below, the U.S. continues to be in the lead, by far, on defense spending. It spent 2.7 times more than China and Russia combined and it spent nearly 11 percent more than the 17 other countries combined.
Angelo Young is a general assignment business reporter who joined IBTimes in April 2012. Much of his career has been behind the scenes as a copy editor, assignment editor and...