The Top Global War-makers: Trends in World Military Expenditure
May 1, 2015
The Stockholm International Peace Research Institute
Global military expenditure in 2014 was an estimated $1.8 trillion. The volume of US exports of major weapons rose by 23 percent between 2005-2009 and 2010-2014. The US's share of international arms exports was 31 percent in 2010-2014, compared with 27 percent for Russia. The US has long seen arms exports as a major foreign policy and security tool, but in recent years exports are increasingly needed to help the US arms industry maintain production levels at a time of decreasing US military spending.
Trends in World Military Expenditure, 2014
Sam Perlo-Freeman, Aude Fleurant, Pieter D. Wezeman and Siemon T. Wezeman / Stockholm International Peace Research Institute (SIPRI)
(April 2015) – The volume of US exports of major weapons rose by 23 percent between 2005-2009 and 2010-2014. The USA's share of the volume of international arms exports was 31 percent in 2010–14, compared with 27 percent for Russia.
Russian exports of major weapons increased by 37 percent between 2005-2009 and 2010-2014. During the same period, Chinese exports of major arms increased by 143 percent, making it the third-largest supplier in 2010-2014, however still significantly behind the USA and Russia.
"The USA has long seen arms exports as a major foreign policy and security tool, but in recent years exports are increasingly needed to help the US arms industry maintain production levels at a time of decreasing US military expenditure," said Dr Aude Fleurant, Director of the SIPRI Arms and Military Expenditure Programme. . . .
Global military expenditure in 2014 was an estimated $1,776 billion, representing a marginal fall of about 0.4 percent in real terms compared to 2013. Total expenditure was equivalent to 2.3 percent of global gross domestic product (GDP).
This is the third consecutive year that total global military expenditure has decreased. However, the falls during the previous two years have been comparatively small; world military expenditure is still only 1.7 percent below its 2011 peak, and it remains significantly above the levels of the late 1980s.
The pattern of the past few years -- whereby military expenditure has fallen in the United States and Western Europe, but increased elsewhere -- largely continued in 2014, although spending in Latin America was essentially unchanged.
Spending in Central Europe broke with recent trends and began to rise again following the large falls in previous years resulting from the global financial crisis that began in 2008. Africa, Asia, Eastern Europe . . . .
SIPRI monitors developments in military expenditure worldwide and maintains the most comprehensive, consistent and extensive data source available on military expenditure. Military expenditure refers to all government spending on current military forces and activities, including salaries and benefits, operational expenses, arms and equipment purchases, military construction, research and development, and central administration, command and support.
SIPRI therefore discourages the use of terms such as 'arms spending' when referring to military expenditure, as spending on armaments is usually only a minority of the total.
US Military Spending Falls, Increases in
Eastern Europe, Middle East, Africa and Asia
STOCKHOLM (April 13, 2015) World military expenditure totalled $1.8 trillion in 2014, a fall of 0.4 percent in real terms since 2013, according to figures released today by Stockholm International Peace Research Institute (SIPRI). The comprehensive annual update of the SIPRI Military Expenditure Database is accessible from today at www.sipri.org.
World military spending, while falling for the third year in a row, has levelled off as reductions in the United States and Western Europe were largely matched by increases in Asia and Oceania, the Middle East, Eastern Europe and Africa. Spending in Latin America was virtually level.
US military spending fell by 6.5 percent* as part of ongoing budget deficit reduction measures; spending has now fallen by 20 percent since its peak in 2010. However, current US military spending is still 45 percent higher than in 2001, just before the 11 September terrorist attacks on the USA.
The next three highest spenders -- China, Russia and Saudi Arabia -- have all substantially increased their military expenditures, with Saudi Arabia's increase of 17 percent making it the largest increase of any of the top 15 spenders worldwide.
'While total world military spending is mostly unchanged, some regions, such as the Middle East and much of Africa, are continuing to see rapid build-ups that are placing an increasingly high burden on many economies', said Dr Sam Perlo-Freeman, Head of SIPRI's Military Expenditure project. 'These increases partly reflect worsening security situations, but in many cases they are also the product of corruption, vested interests and autocratic governance.'
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 percent 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 percent 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 percent 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 percent in 2014, reaching $439 billion. The increase is mostly accounted for by a 9.7 percent increase by China, which spent an estimated $216 billion.
Among the other major spenders, Australia increased its spending by 6.7 percent, with smaller increases by South Korea and India of 2.3 and 1.8 percent, 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 percent. Conversely, Indonesia, a fellow South China Sea-littoral state, broke its trend of several years of increases with a 10 percent 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 percent. Meanwhile, Mexico increased its spending by 11 percent 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 percent 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 percent, with the top two spenders Algeria and Angola, both major oil producers, increasing their spending by 12 and 6.7 percent, 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.
*All percentage increases and decreases are expressed in real terms (constant 2011 prices).
This is the third and final major data launch prior to the release of SIPRI's world nuclear forces figures and the major findings of SIPRI Yearbook 2015 on 15 June 2015.
The World's Top 100 Military Companies
Sales by largest arms companies fell again in 2013 but Russian firms' sales continued rising
STOCKHOLM (December 15, 2014) -- Sales of arms and military services by the largest arms-producing companies -- the SIPRI Top 100 -- totaled $402 billion in 2013 according to new data on international arms production launched today by SIPRI.
This is the third consecutive year of decline in the total arms sales of the 100 largest arms producers and military services providers. With a decrease in sales of 2 percent in real terms compared to 3.9 percent in 2012, the pace of the decline has slowed slightly. This is partly attributable to significant increases in arms sales by Russian companies and other emerging suppliers.
Sales by companies headquartered in the United States and Canada have continued to moderately decrease, while sales by Russian-based companies increased by 20 percent in 2013. Western Europe offered a more mixed picture, with French companies increasing their sales, sales by British companies remaining stable, and Italian and Spanish arms-producing companies' sales continuing to decline.
'The share of global arms sales for companies outside North America and Western Europe has been increasing since 2005,' says Dr Aude Fleurant, Director of SIPRI's Arms and Military Expenditure Programme. 'For 2013, at 15.5 percent of Top 100 arms sales, this share is at its highest point in the history of the SIPRI Top 100, which does not include China-based companies due to a lack of reliable data.'
Companies' Growth Remains High
The Russian company with the largest increase in sales in 2013 is Tactical Missiles Corporation, with a growth of 118 percent, followed by Almaz-Antey (34 percent) and United Aircraft Corporation (20 percent).
Almaz-Antey's arms sales in 2013 make it the 12th-largest arms producer (excluding China) and bring it closer to the top 10, which has been exclusively populated by arms producers from the USA or Western Europe since the end of the cold war.
2013 also saw the introduction of a 10th Russian arms company, communication and electronics manufacturer Sozvezdie, to the SIPRI Top 100.
'The remarkable increases in Russian companies' arms sales in both 2012 and 2013 are in large part due to uninterrupted investments in military procurement by the Russian Government during the 2000s.
These investments are explicitly intended to modernize national production capabilities and weapons in order to bring them on par with major US and Western European arms producers' capabilities and technologies,' says Siemon Wezeman, Senior Researcher with the SIPRI Arms and Military Expenditure Programme.
US Budget Control Act
Has Not Yet Affected US-based Producers
Starting in 2011, the combination of limits on US defence spending imposed by the 2011 Budget Control Act and the withdrawal of military forces from Afghanistan and Iraq triggered a gradual decline in US arms companies' sales.
The trend continued in 2013 with a decrease of 4.5 percent in the total estimated arms sales of US companies ranked in the SIPRI Top 100 compared with sales in 2012. The number of US producers in the Top 100 also reduced from 42 companies in 2011 to 38 in 2013.
'This is a consequence of US companies divesting portfolio activities facing substantial decreases, specifically those relying on demand for equipment and services related to major operations overseas,' says Dr Fleurant.
Emerging Producers from the
Global South Increase Sales
SIPRI has created a new category for emerging suppliers ranked in the SIPRI Top 100 for 2013 in order to better track their evolution. This new category covers arms-producing companies located in the Global South, including Brazil, India, the Republic of Korea (ROK, South Korea), Singapore and Turkey.
Collectively, emerging suppliers' arms sales represent a modest share of the Top 100 global sales (around 3.6 percent). However, the growth in 2013 of some suppliers has been impressive. For example, sales by South Korea's Korean Aerospace Industries grew by 31 percent in 2013, while Brazil's Embraer and Turkey's Aselsan continue to increase their respective positions in the Top 100 following their first appearance in the 2011 rankings.
'These trends underline the modest yet continuing relative erosion of the domination of the US and Western European producers,' says Dr Fleurant.
The SIPRI Arms Industry Database
The SIPRI Arms Industry Database was created in 1989. It contains financial and employment data on arms producing companies worldwide. Since 1990, SIPRI has published data on the arms sales and employment of the 100 largest of these arms-producing companies in the SIPRI Yearbook.
Arms sales are defined by SIPRI as sales of military goods and services to military customers, including sales for domestic procurement and sales for export.
This is the first of three major data set pre-launches in the lead-up to the publication of SIPRI Yearbook 2015. On 16 March 2015 SIPRI will release its international arms transfers data (details of all international sales, transfers and gifts of major weapons in 2014) and on 13 April 2015 its world military expenditure data (comprehensive information on global, regional and national trends in military spending).
Finally, in June 2015, SIPRI will launch the 2015 edition of the SIPRI Yearbook (featuring cutting-edge information and analysis on the state of the world's nuclear forces, the international peacekeeping agenda and steps to control weapons of mass destruction).
Posted in accordance with Title 17, Section 107, US Code, for noncommercial, educational purposes.