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Defence Budgets & Military Competition and Conflict

The most recent data published by the Stockholm International Peace Research Institute (SIPRI) denotes rising military budgets despite the financial challenges faced by countries the World over due to the COVID 19 pandemic in 2020.

A detailed review of the data region and country wise as provided by SIPRI denotes areas of military competition and conflict including the nature of wars or non-wars that could be fought in the years ahead. The regions of concern include Asia Oceania as categorised by SIPRI, Europe and the Middle East.

While budget is one factor that would determine the rationale for nations going to war, possession of military capability could result in recourse to use of force for achieving national objectives.

For instance regaining national territorial sovereignty – China’s aim is clearly evident be it in South China Sea or the India China standoff in Eastern Ladakh through the past one year. The fact that China as per SIPRI has consistently increased the military budget for the past 26 years is a marker that cannot be ignored.

From the global perspective the United States stands head and above other countries with a military budget of $778 billion in 2020, which accounts for 39 per cent of global military spending. SIPRI ascribes US military spending increase from 2018–20, “to focused investment in research and development, and implementation of several long-term projects such as modernizing the US nuclear arsenal and large-scale arms procurement”.

The main drivers identified by SIPRI are strategic competition with China and Russia and former US President Donald J. Trump’s agenda of building a military which he perceived as being under funded.

The implied deduction in the increase is growing strategic competition – nuclear as well as conventional between the United States and China and Russia. Will this result in an arms race remains to be seen?

China which forms a part of the Asia and Oceania which accounts for 27 per cent of the total military budget for 2020 also shares the military burden with other high spenders as India, Japan and South Korea apart from the United States which also has large deployed resources in this region which have not been separately budgeted by SIPRI.

China’s spending in 2020, is estimated to be $252 billion and is 1.9 per cent higher than in 2019 and amounted to 1.7 per cent of GDP.

Other high spenders in this region are all related to the growing competition with China to include India ($72.9 billion), Japan ($49.1 billion), South Korea ($45.7 billion) and Australia ($27.5 billion).

In the decadal trend SIPRI highlights that China’s increase in military spending is 76 per cent from 2011–20 while South Korea (41 per cent), India (34 per cent) and Australia (33 per cent) are the other high spenders also in the Asia Oceania region.

SIPRI calculates India’s military budget at $72.9 billion, or 2.1 per cent higher than in 2019 and 34 per cent higher than in 2011 which is attributed to adversarial relations with Pakistan and China.

South East Asia seen as a generally benign region also saw an increase by 5.2 per cent to $45.5 billion in 2020 and 36 per cent for the decade 2011-20.

Singapore ($10.9 billion), Indonesia ($9.4 billion) and Thailand ($7.3 billion) saw an increases in the defence budget which SIPRI attributes to managing China’s assertiveness and territorial disputes in the South China Sea.

Clearly the focus of rising military budgets in the Asia Oceania region known variously as Asia Pacific or Indo Pacific is focused on the military competition and threat related to China.

In the military there is an asymmetry of budgeting amidst the key competitors. For instance Saudi Arabia’s military expenditure was $57.5 billion in 2020, 10 per cent lower than in 2019 as per SIPRI.

Israel’s spending totalled $21.7 billion in 2020—a 2.7 per cent increase over 2019. On the other hand Iran’s military spending saw a decline by 3.0 per cent in 2020, to $15.8 billion as a result of the economic sanctions imposed by the U.S in May 2018.

The combined budget of Saudi Arabia and Iran is five times that of Iran. Tehran’s conventional military capability is also comparatively low due to technology denial and restrictions on arms imports for the past few decades. However Iran will make up for the deficit by resorting to the use of asymmetric weapons systems such as rockets, missiles and drones. Thus a shadow war will be inevitable in the Middle East in the coming years.

Europe with 19 per cent of global military expenditure in 2020 is the third largest spending region. A related figure is the military expenditure of North Atlantic Treaty Organization (NATO) members which was $1103 billion in 2020. SIPRI remarks that six of the top 15 military spenders are members of NATO: the USA, the UK, Germany, France, Italy and Canada accounting for 90 per cent ($995 billion) of total NATO spending and 50 per cent of global military expenditure. Separately, military spending in Europe in 2020 amounted to $378 billion. This was 4.0 per cent higher than in 2019 and 16 per cent higher than in 2011 says the SIPRI report.

Comparatively Russia’s military expenditure was $ 61.7 billion and increase by 2.5 per cent in 2020. This was one sixth of the spending of Europe combined thus indicating the conventional gap even discounting the US capabilities deployed in NATO.

With the current state of Russia and Europe relations, growing military competition in the Continent can be anticipated with Moscow increasingly relying on nuclear weapons to make up for the conventional deficit.


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