Global military spending continued to decline last year. Although arms expenditure has actually increased in much of the world, military spending in the United States — which still accounted for 37% of total global military spending in 2013 — has declined in recent years.
The Stockholm International Peace Research Institute (SIPRI) measures annual military spending for most of the world's armed countries. According to SIPRI, the U.S. spent $618 billion on its military last year, more than three times the $171 billion budget of second place China. Based on SIPRI's 2013 data, these are the countries with the largest military budgets.
According to Dr. Sam Perlo-Freeman, senior researcher and head of the SIPRI Project on Military Expenditure, austerity measures account for the majority of the declines in military spending, particularly in Western Europe.
In the U.S., lower military spending was partly the result of efforts to reduce the deficit, but mostly due to the withdrawal from Iraq and Afghanistan. Since the peak of U.S. military expenditure in 2010, military spending has fallen 14% amidst growing concerns about the national debt. Similarly, the United Kingdom has dramatically reduced military expenditures following Prime Minister David Cameron's call for financial responsibility.
In other countries — especially those where military spending was on the rise — military budgets were dependent on a number of factors. A country's economy, for example, often mirrors military spending. "You need to have GDP growth to be able to afford higher military spending," Perlo-Freeman said.
This was evident in China, where military spending has grown in proportion to the country's economic growth. According to Perlo-Freeman, because personnel expenditure often accounts for the bulk of military spending, "when you see an economy growing, it's entirely natural that [spending] would increase."
Regional conflicts have also caused countries to increase the size of their military. Algeria, where the Arab Spring began in 2010, also became the first country in Africa with a military budget that exceeded $10 billion last year, likely due to instability within the country and unrest in the region. Similarly, mounting tension between Pakistan and India may have contributed to India becoming the world's largest arms importer last year.
China's significant military budget and the modernization of its armed forces have contributed to tensions in Southeast Asia and the East Asian Sea. Territorial disputes, combined with high spending, as Perlo-Freeman explained, have induced countries to expand the size of their military expenditures. Japan, for example, increased its military budget for the first time in 10 years due to recent territorial disputes with China.
Some countries fund military spending through oil revenues because it is a direct source of revenue for the government that avoids increasing taxes. Military spending depends on "the government to actually be able to collect some of the proceeds of [economic] growth," mostly through taxation, Perlo-Freeman explained. However, increasing taxes for military spending is especially unpopular. "This is one of the reasons we often see such high shares of GDP devoted to spending in big-oil producers," Perlo-Freeman said. Brazil, Saudi Arabia and Russia are all large oil-producing nations, as well as some of the world's top military spenders.
To determine the top 10 countries that spent the most on their military in 2013, 24/7 Wall St. examined SIPRI data on military expenditure in over 170 countries. We reviewed SIPRI data on military exports, imports and military expenditure as a percentage of gross domestic product. We also reviewed GDP and GDP growth figures from the International Monetary Fund.
These are the countries with the highest military expenditures.
1. United States
> Military expenditure: $618.7 billion
> Expenditure as pct. of GDP: 3.8% (14th highest)
> 1-yr. spending change: -7.8% (12th lowest)
> Total arms imports: $759 million (8th highest)
> Total arms exports: $6.2 billion (2nd highest)
The $619 billion military expenditure in the U.S. nearly outpaced the combined spending of every other country on this list in 2013. At the start of 2013, the U.S. had nearly 8,000 nuclear warheads in reserve. Since 2001, U.S. defense spending has risen from $287 billion to $530 billion. In recent years, however, U.S. military outlays fell from 4.8% of GDP in 2009 to 3.8% in 2013. Reduction in military expenditures was due to a greater emphasis on fiscal austerity and the winding down of the conflicts in Iraq and Afghanistan. In fact, military expenditure fell nearly 6% in 2012, followed by a 7.8% reduction in 2013. Despite efforts to curtail the size of the military, the U.S. supplied nearly $6.2 billion in arms to foreign allies, a figure second only to Russia. The U.S. was also a large arms importer, bringing in $759 million worth of arms, among the higher rates worldwide.
> Military expenditure: $171.4 billion
> Expenditure as pct. of GDP: 2.0% (45th highest)
> 1-yr. spending change: 7.4% (36th highest)
> Total arms imports: $1.5 billion (3rd highest)
> Total arms exports: $1.8 billion (3rd highest)
Military spending often mirrors economic growth, and this is especially true in China where military spending has increased in each of the past five years roughly in line with economic growth. Military expenditure grew 7.4% last year alone, far more than any other country in the region, and among the larger annual growths worldwide. The value of China's military exports trails only the U.S. and Russia, at around $1.8 billion last year. Unlike most other countries, China imported nearly as much in military goods as it exported, at $1.5 billion last year. According to Dr. Perlo-Freeman, a combination of increased Chinese military spending and rising regional tensions have encouraged higher military expenditures among neighboring countries like Vietnam, the Philippines and Japan.
> Military expenditure: $84.9 billion
> Expenditure as pct. of GDP: 4.1% (10th highest)
> 1-yr. spending change: 4.8% (48th highest)
> Total arms imports: $148 million (33rd highest)
> Total arms exports: $8.3 billion (the highest)
Russia leads the rest of the world in military exports, with more than $8 billion worth last year, well above the U.S.'s $6.2 billion in exports. While total military spending in Russia remains a fraction of what it was in the late 1980s, it has been on the rise in recent years as a result of Russia's involvement in various regional conflicts. With the more recent ongoing Crimean crisis, this spending trend may likely continue. The country's military expenditure was roughly $85 billion last year compared to just $64.5 billion in 2009. Russia now spends 4.1% of its GDP on its military, exceeding that of the U.S. for the first time in over a decade. The dramatic increase is likely due in part to Russia's stated plans to invest more than $700 billion to modernize its weapons system by 2020. According to some onlookers, making these improvements may be difficult given Russia's low birth rates, poverty and lingering soviet-era corruption problems.
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4. Saudi Arabia
> Military expenditure: $62.8 billion
> Expenditure as pct. of GDP: 9.3% (2nd highest)
> 1-yr. spending change: 14.3% (16th highest)
> Total arms imports: $1.5 billion (4th highest)
> Total arms exports: N/A
Situated in an increasingly unstable region, Saudi Arabia hiked its military budget by 14.3% in 2013. Saudi neighbors include Iraq and Yemen, which are currently in turmoil. Saudi Arabia has also had historically poor relations with another neighbor, Iran, which could become an even bigger threat if it acquires nuclear capabilities. The large increase in military outlays is likely a direct response to these threats. The House of Saud aims to replace its current 20-year old weapon stores, including a heavy investment in missile defense systems. Like many of the countries with the biggest military budgets, Saudi Arabia benefits from one of the world's largest oil reserves. At 9.3%, the country's spending as a percentage of GDP was second only to Oman, another oil-rich nation in the Middle East.
> Military expenditure: $62.3 billion
> Expenditure as pct. of GDP: 2.2% (39th highest)
> 1-yr. spending change: -2.3% (35th lowest)
> Total arms imports: $43 million (55th highest)
> Total arms exports: $1.5 billion (4th highest)
Like much of Western Europe, France's military expenditure has fallen in recent years. France spent nearly $70 billion in 2009, versus more $62 billion last year. This decrease, however, was relatively small given the country's weak economic growth and implementation of the austerity measures after the global economic crisis. France passed the Military Programming Law in 2013, which aims to keep the current level of military spending through 2019. France exported nearly $1.5 billion in military goods last year, more than all but three other countries. French arms exports have historically ended up in Africa, where France maintains ties with many of its former colonies.
MORE AT 24/7 WALL ST.: The rest of the 10 countries that spent the most on the military
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