WorldFear of major conflict drives up military spending

Fear of major conflict drives up military spending


INFOGRAPHICS – The defense budgets of European countries, compared to those of the United States, Russia and China, reflect the awareness of an increase in threats.

What is the weight of European defence? How important is it compared to that of the United States, Russia and China? How is his budget changing? Since 2014, following the Russian intervention in Ukraine and the annexation of Crimea, Europe has a more acute perception of threats. A concern that is reflected in the increase in Defense budgets, as revealed by the 2021 data collected by the International Institute for Strategic Studies (IISS), a British think-tank founded in 1958, which has just published its report on the state of the capabilities of armies in the world. It is already certain that this upward trend will not weaken in 2022, as shown by the recent budgetary decisions taken at the beginning of the year by several States, in the wake of the invasion of Ukraine by Russia on 24 February.

The United States remains far ahead of all other international players, with a budget of $754 billion in 2021, even if it is on the decline. If we refer to the national budgets, US military spending is equivalent to that of the following twelve countries. China comes in second place with more than 200 billion dollars. It is followed by the United Kingdom and India. Russia, in fifth place, spent 62.2 billion dollars in 2021, a little more than France, just behind at almost 60 billion. However, these figures are underestimated for some nations, such as China and Russia, because they are not calculated in purchasing power parity (PPP), i.e. taking into account cheaper inputs ( cheaper cost of production, lower wages, etc.). In this case, in PPP terms, Russia’s budget would approach $180 billion and China’s would exceed $330 billion.

The sum of the defense expenditures of all 37 European countries, including Turkey, amounts in 2021 to 350 billion dollars, i.e. twice less than the United States. It is the United Kingdom and France, the two nuclear powers of the Old Continent, which contribute the most to this effort. Next come Germany and Italy. Analysts from the Military Balance report note that since Moscow’s annexation of Crimea in 2014 and the subsequent military intervention in eastern Ukraine, the continent’s security landscape has been turned upside down. Since then, for seven years, they note that European defense spending has continued to increase. In 2021, they grew by 4.8% in real terms (excluding inflation), more than in any other region. They represent 18.7% of the world total, whereas they have fluctuated between 16.5% and 17% per year since 2014.

In terms of % of GDP, i.e. relative to their wealth, these are the Greeks who provide the greatest effort, up to 3.65% of their GDP, followed by the Baltic States and Poland, which join the United Kingdom and France at the top of the ranking. These countries are among the good students of NATO, devoting more than 2% of their GDP to the defense sector, a target set by the Atlantic Alliance in 2006.

Regarding the workforce, Europe has nearly 1.7 million personnel integrated into the active forces. Against 754,000 for the United States, 900,000 for Russia and more than 2 million for China. Among the largest European contingents, France comes first with 203,000 men and Germany with 183,000 men. For its part, Turkey, a member of NATO, has an armed force of 355,000 men.

In total and in current dollars, global spending increased again, from $1841 billion in 2020 to $1905 billion in 2021, i.e. +3.4%. But this increase was ultimately impacted by high inflation (cost of energy, etc.) since in real terms, expenditure contracted by 1.8%, particularly in Latin America, sub-Saharan Africa, the Middle East and North Africa, as well as in Russia.

For 2022 and the years to come, war in Ukraine obliges, the increase in budgets is confirmed among the former members of the Warsaw Pact. Poland is expected to present an amendment to increase its spending to 3% of GDP in 2023 from 2% currently. The Czech Republic, Slovakia, Hungary, Romania and Bulgaria have also said they are revising their budgets upwards to reach (or exceed in the case of Romania) 2%.

The Baltic countries who feel on the front line, threatened by Russia, received a visit from the American Chief of Staff to reassure them. These three countries already devote more than 2% of their national wealth to defence. Despite everything, Latvia has decided to increase this share to 2.5% next year.

In Germany, the Moscow offensive forced the country to change course. Not only by suddenly putting 100 billion euros on the table, but also by announcing, through the voice of Chancellor Olaf Scholz on February 27, 2022, that the country would “from now on, year by year, invest more than 2% of our gross domestic product in our defense against 1.3% currently”. This is a major reversal for Germany which, in recent years, has been dragging its feet to comply with the commitments of the Atlantic Alliance in this area, regularly attracting the wrath of the United States. But Russia’s intervention in Ukraine took the country completely by surprise, forcing Angela Merkel’s successor to reshuffle the cards.

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