SIPRI Yearbook: Military Expenditure
Ed,
I'm including this 'for posterity'. It was referenced in the article in your post on military expenditures:
editors.sipri.org
Chapter 10. Military expenditure
by Elisabeth Sköns, Wuyi Omitoogun, Sam Perlo-Freeman and Petter Stålenheim
About the authors
* Chapter summary from the SIPRI Yearbook 2003:
Armaments, Disarmament and International Security
(Oxford: Oxford University Press, 2003)
World military expenditure, which has been increasing since 1998, accelerated sharply in 2002—increasing by 6% in real terms to $794 billion in current prices. It accounted for 2.5% of world GDP and was $128 per capita. The current level of world military expenditure is 14% higher in real terms than it was at the post-cold war low of 1998, but is still 16% below its 1988 level, when world military expenditure was close to its cold war peak.
The increase in 2002 is dominated by a 10% real terms increase by the USA, accounting for almost three-quarters of the global increase, in response to the events of 11 September 2001. Further substantial increases are planned up to 2009. Furthermore, the budgets for fiscal years (FYs) 2003 and 2004 do not include the cost of the war in Iraq. A stated goal of the increased spending is to pursue the ‘transformation’ of US armed forces to better meet the challenges of 21st century warfare. This has been questioned, however, given the continuation of a large number of ‘legacy’ systems designed during the cold war.
The USA now accounts for 43% of world military expenditure, when currencies are converted at market exchange rates, as is the SIPRI practice in this Yearbook. The top five spenders—the USA, Japan, the UK, France and China—account for 62% of total world military expenditure and the top 15 account for 82%. These rankings depend strongly on the choice of exchange rate for conversion to US dollars.
Market exchange rates tend to undervalue the actual purchasing power of money in developing countries and economies in transition. When military expenditures are compared using purchasing power parity (PPP) rates, which reflect the actual volume of goods and services that can be purchased in each country with its currency, the USA remains the top spender but China, India and Russia become numbers two, three and four, respectively. SIPRI has chosen to use market exchange rates because of the lack of reliable PPP data for all countries and a need to apply a consistent methodology for currency conversion.
There are marked regional disparities in the share of economic resources devoted to military expenditure. In 2001, the most recent year for which data are available, the Middle East spent an estimated 6.3% of gross domestic product on the military compared to a global average of 2.3%, while Latin America spent only 1.3%. Africa, Asia (including Oceania) and Western Europe also spent less than the world average (2.1%, 1.6% and 1.9%, respectively), while North America, at 3%, and Central and Eastern Europe, at 2.7%, spent somewhat more.
While the war on terrorism is a major factor in the increase in US military expenditure, this has not been the case elsewhere—except in a handful of countries. In particular, military expenditure in Western Europe remained flat in 2002. On the other hand, the UK and France have announced increases from 2003, some of this linked to developing ‘network-centric’ warfare, which is seen as important in the war on terrorism. However, these increases are not matched by most other countries in the region.
Other major powers increased military expenditure in 2002 for differing reasons. Russia’s 12% real terms increase in military spending relates mainly to efforts at military reform and the maintenance of technological capability in Russian industry. China increased military spending by 18% in real terms in 2002, also in pursuit of military reform and modernization.
In the Balkans, some countries appear to be reducing military spending as the region gradually returns to normality, while prospective NATO members in Central and Eastern Europe have been increasing military spending in pursuit of their candidacies and to promote NATO interoperability. In the Middle East most countries made only modest increases in military spending in deference to public opinion, which was against further increases in spite of tension in the region over Iraq. However, escalation in the Israeli–Palestinian conflict drove up Israeli spending. African military spending rose slightly, with armed forces modernization tending to become a more important driver than conflict in most cases. In South Asia, continued regional political rivalry and armed conflict between India and Pakistan pushed up military spending, reinforced by Pakistan’s role in the US-led war on terrorism.
Appendix 10A contains tables of military expenditure in local currency and constant dollars, and as a share of gross domestic product for the period 1993–2002.
Appendix 10B contains data on NATO military expenditure.
Appendix 10C explains the sources for and methods of data collection. |
