Monday, September 21, 2009

Defence Spending of Major Asian Powers

How much Asian powers are spending on their militaries and the trends in that spending is important to look at because military spending is the basis of military capabilities and strategies.

Broadly, though US defence spending is still far greater than any other power by far, Chinese defence spending has been expanding rapidly, both because of greater commitment to the Chinese military but also because of the expansion of the Chinese economy.

The world military spending for 2007 stood at $ 1,214 bn of which the US accounted for 45 percent, with the next big spending powers – the UK, China, France and Japan – way down at 4 to 5 percent each. Therefore, in absolute terms, the US military budget still remains the largest. Its military spending is “more than the next 14 countries combined,” about 50 percent of world’s total military spending. The US military budget has gone up significantly since 2001. Although the 2007 budget was the highest since the end of World War II, the growth in US economy and total budget meant that military expenditure as a share of GDP and the total Government expenditure remained lower than previous peak periods (FY 1953, Korean War, FY1968 Vietnam War, FY 1989 Cold War spending).

The effect of US military spending is reflected in the US continuing to maintain a lead in military and technological areas. It is unlikely that any other power including Russia can catch up with the US in the near future. The US lead is across all the spheres of the military – land, sea, air and space. The US has also maintained nuclear primacy by enhancing its strategic weapons programmes, corresponding with decline and decay of the Russian strategic weapons programme and the slow development of Chinese programmes. This situation is unlikely to change in the near future. Although the US has undertaken a reduction in the number of strategic nuclear weapons under arms control/reduction agreements, it has continued to maintain and in fact beefed up its counterforce capabilities as well as the lethality of some of these weapon systems, particularly the SLBM and ICBM programmes.

China, on the other hand, has the fastest growing military budget not only in Asia, but in global terms. In Purchasing Power Parity (PPP) terms, it has overtaken Japan and has taken the second position in the world. Despite the discrepancy in the estimates of Chinese defence budget, it still remains an important indicator of its national defence priorities, strategies and capabilities. The discrepancies have varied from the current Chinese official estimates of $ 45 bn to the DIA estimate of $115 bn. Chinese military expenditure grew at the rate of 12 per cent in 2006. China is world’s fourth largest military spending power after the US, UK, and France, but in PPP terms (which is more relevant), China stands second at $188.2 bn after the US at $528.7 bn. As the country reaches higher stages of economic growth, the military spending power is only bound to increase, hence one can visualise higher per capita military spending as well.

The increased spending is reflected in its accelerated procurement/ development of newer and updated weapon systems. Chinese advancement in submarine warfare and air defence systems are a proof of their increased focused defence spending.

Other powers like Russia are lagging not too far behind in their military expenditure. According to SIPRI, Russia’s defence expenditure, since 1998 when it began to increase, has gone up by 160 percent, although the increase from 2005 over the previous years has been 19 percent in 2005, 12 percent in 2006 and 13 percent in 2007. In terms of the biggest military spending powers, Russia stands at 7th position after US, UK, China, France, Japan, Germany, and Russia and third in PPP terms, after US and China. However, due to the growth in the overall economy of Russia, military expenditure as a share of GDP has come down from 4.3 percent in 2003 to 3.6 percent in 2006. In recognition of the regional developments, including China factor and the US missile defence in Europe, Russia intends to spend a large amount of money on military modernisation -- prioritizing areas like air superiority, precision strikes at land and sea targets, large-scale production of warships, primarily nuclear submarines with cruise missiles and capability for rapid deployment of forces. However, given the lacunae in Russian conventional military strength, there will be added emphasis on strategic weapons and their delivery mechanisms.

Japan, on the other hand, having pursued a pacifist military posture, has the smallest budget of the four major powers discussed here. Japan in fact has exercised an unofficial cap on defence spending, limiting its budget to less than 1 percent of its gross domestic product (about $42 bn). Nevertheless, Japan still remains one of the largest military spenders, ranking fifth in the world after the US, UK, China and Russia and eighth in PPP terms. However, given the changing regional scenario with increasing threats from North Korea, Japan has been contemplating an increase in its defence spending focusing on missile defence issues.

Defence budget trends therefore show that though the US is nowhere near being replaced as the most powerful nation on earth, but Chinese defence spending does show large and continuing growth.

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