Economic Planet | Increasing Military Budget

The world we know has changed in a week due to Russia’s invasion of Ukraine. It has been going on since the end of World War II, and the era of relative world peace that is fueling economic prosperity is nearing its end. Looking at the evolution of global military spending, there are concerns about the future.

Posted at 8am

Helen Barril

Helen Barril

Total military spending around the world follows a long upward curve. The International Institute for Strategic Studies recently pointed out that even pandemics do not bend this curve. Global military spending increased by 3.9% in 2020 compared to 2019.

However, compared to the size of the world economy, military budgets have declined since the 1960s. Military spending as a percentage of world GDP fell from 6.1% in 1967 to about 2% in 2018.

According to World Bank data, this slow decline seems to be over. Since 2018, the proportion of military spending in the economy has begun to rise again. Not surprisingly, the United States spends the most on weapons. The country alone accounts for 40% of the world’s total military spending. Then China and India.

Comparing the proportion of military spending to the size of the economy gives us better ideas about the war effort of each country. In the United States, military spending accounts for 3.7% of gross domestic product (GDP). Especially for Russia, where the military budget accounts for 4.3% of the economy. Ukraine, which is currently defending itself from Russia’s aggression, has increased military spending since 2014, accounting for 4.1% of the economy.

At this scale, the oil monarchy is the champion. Protecting the treasures buried underground is expensive. For example, Saudi Arabia spends more than 8% of GDP as a weapon and Kuwait spends 6.5%.

2% club

NATO’s 29 member states, which are currently using hot calls due to the threat hanging in Europe, must devote at least 2% of their GDP to defense.

Not all do so. For example, Canada is 1.4%, not far from the bottom of the list. In fact, less than half of NATO member countries comply with this rule, and some have only recently decided.

The Russian president’s hegemonic ambitions are not from yesterday or last week. This probably led some European countries to rethink their military spending. In 2020, France, Norway and Slovakia joined the country to devote at least 2% of GDP to military budgets.

Germany, Europe’s largest economy, below the 2% rule and constantly reluctant to increase military spending, is, of course, just beginning to make a complete change. German Chancellor Olaf Scholz announced a few days ago: [l’armée allemande] This causes the total to exceed the 2% threshold.

I haven’t seen anything yet. A surge in military budgets is expected around the world. Even Canada, which bordered the Arctic Russians and began to worry about it, could follow suit.

“It’s the beginning of a new era,” the German Chancellor pleaded, and his remarks were reported in all media on the planet.

The world has changed, but some haven’t. “If you want peace, get ready for war,” it has been believed since Roman times. It still seems to be the situation.

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  • 183 billion US
    World total military spending in 2020

    International Institute for Strategic Research