New threats slowly increase defense spending

In 2015 the global spending on armaments was USD1.7 trillion. That's about 1 per cent more than a year earlier.
New threats slowly increase defense spending

NATO Summit 2016, Warsaw, Poland (Poland’s MFA, CC BY-NC)

Politicians convince the public that more funds should be invested in the army. In Europe, however, only Poles and Dutch want to spend more on defense.

Expenditure on armaments 560x440

(infographics Bogusław Rzepczak)

The decisions taken at the Warsaw NATO summit (July 8th – 9th, 2016) can significantly affect the levels of military spending in the coming years in NATO countries and the countries cooperating with NATO. This concerns Finland and Sweden in particular. The desire of the Scandinavian countries to come closer to the structures of the alliance was reflected by the level of their delegations.

Poland and Central Europe got the confirmation of the decision to establish four NATO battalions deployed in the region. Southern Europe expected more spending on the fight against the Islamic State and to support immigration policies in Europe. Americans put pressure on the Europeans to generally spend more on military purposes and security. More funds will be allocated for cybersecurity, and there were no differences of opinions among the countries in this respect.

Increase in military spending despite the fall in oil prices

In 2015 the global spending on armaments was USD1.7 trillion. In real terms this is about 1 per cent more than in 2014 (SIPRI data – Stockholm International Peace Research Institute). This is the first increase in military spending since 2011, arising mainly from decisions taken in the countries of Asia and Oceania, Europe, the CEE in particular, and some countries of the Middle East. In the Western Europe military expenditure remains at a similar level, while the countries of Africa and Latin America and the Caribbean spend less on defense.

The United States spends by far the most on security in the world. In 2015, the figure was USD596bn. The other leading countries with the biggest military expenditure are China – USD215bn (an increase of 7.4 per cent.), Saudi Arabia – USD87.2bn (an increase of 5.7 per cent.) and Russia – USD66.4bn (an increase of 7.5 per cent.).

The decline in oil prices and the discovery of new deposits of this commodity in some regions affected military expenditure. In 2015 the biggest cuts on military spending were introduced by Venezuela (-64 per cent), Angola (-42 per cent), Bahrain, Brunei, Chad, Ecuador, Kazakhstan, Oman and South Sudan.

Other oil producing countries have not reduced their military spending. Despite falling revenues Algeria, Azerbaijan, Russia and Saudi Arabia spend more on military purposes in the face of increasing regional conflicts.

North America and Western Europe have been steadily reducing defense spending since 2009, because of the economic crisis and the political decision to withdraw troops from Afghanistan and Iraq. It seems, however, that the year 2016 will be a watershed, as the countries of the region will increase their budgets for military purposes again.

Polish politicians are ready to spend more

In Europe, security expenditure fell by 0.2 per cent in 2015. The Western Europe reduced it by 1.3 per cent, while the Central Europe – including Poland, Lithuania, Latvia, Estonia, Romania and Slovakia –raised it by 13 per cent. However, the United Kingdom, France and Germany have announced that in view of the threats from Russia, ISIS and international terrorism, they will increase their security budgets.

At the European Parliament conference: Safety of Poland and the region – how much depends on us, and how much on the allies? organized before the NATO summit in Warsaw, MEPs for Poland – representing various parties in the European Parliament – advocated the idea of increasing expenditure on the armies of the EU member states, and even promoted the creation of a joint army of the European Union, numbering 30-40 thousand soldiers. But in the current political and economic situation, the implementation of this vision seems unlikely.

“The main pillar of the European Union should be security. 500 million Europeans must be aware that the primary objective of the European Union is to provide security. The next pillars are the flow of goods, services and people,” stressed Janusz Zemke, member of the Subcommittee on Security and Defense, representing the Socialists and Democrats.

“Will the European Union have its own army? No, it will not,” believes Bogdan Zdrojewski of the Group of the European People’s Party, “but we should mobilize ourselves and spend more on infrastructure.”

“We are open to the postulate of the European defense union,” explains Anna Fotyga, Chair of the Subcommittee on Security and Defense from the European Conservatives and Reformists Group, “the problem is about financing it,” she adds.

The planned defense expenditure in relation to GDP in Central Europe is relatively high compared with the countries of Western Europe. In the past three decades Poland spent between 2.6 and 1.8 per cent of its GDP on defense, while the goal for the next few years is to achieve the level of 2 per cent. The same goal has been also set by Estonia.

For the sake of comparison, in recent years Germany and Spain have allocated approximately 1.2 per cent of their GDP on defense which is similar to Denmark or the Netherlands, while France and the United Kingdom have spent more – about 2 per cent of their GDP. Military expenditure in traditionally neutral countries such as Austria and Switzerland is at a record low of 0.7 per cent of GDP, and in Ireland and Hungary 0.4 per cent and 0.8 per cent of GDP, respectively. For comparison, since 2012 Russia has spent between 4 and 5.4 per cent of its GDP on armaments. In 2015 the defense budget in relation to GDP was the highest in three decades.

“The ratio of defense expenditure to GDP is relative,” says Rolf Nikel, Ambassador of Germany in Poland, “it shows real growth in expenditures while the economy is growing, but at the time of an economic crisis or recession, it does not.”

“Estonia will incur additional expenditures on defense,” says Harri Tiido, Ambassador of Estonia in Poland, “I also hope that Europe will be operationally ready for counteracting cyber-attacks. We should find funds for this purpose.”

The indicators of expenditure on security per capita in countries such as Germany, the Netherlands, Sweden, Spain and Finland are higher than those in Central Europe, except for Estonia.

The indicators of expenditure on defense in relation to all state expenditures in countries such as Poland or Estonia is above 5 per cent. In Russia it exceeds 14 per cent, in the US – 9 per cent, and in Western Europe, for example, in Germany, Italy and Spain, about 2.8 per cent. In France it is 3.7 per cent and in the United Kingdom – 4.9 per cent (data for 2015).

Only the Poles and the Dutch want to spend more on defense

Public opinion on military spending (002)

(infographics Bogusław Rzepczak)

According to a study published by the American Institute Pew Research Center on 13 June 2016, 52 per cent of Poles and 49 per cent of the Dutch are willing to spend more on defense. These results are surprising.

The Poles and the Dutch are followed by the Swedes (47 per cent) and the British (43 per cent). In contrast, only about one-third of the Germans and the French want their country to spend more on security.

The nations that are the most skeptical about increasing military spending are the Spanish – of whom only 14 per cent are in favor of this idea – and the Italians, with the support of only 26 per cent. The Europeans seem to want to keep the same level of spending on armaments and defense. Half of the population of Spain, France and Hungary are of that opinion.

NATO Summit 2016, Warsaw, Poland (Poland’s MFA, CC BY-NC)
Expenditure on armaments 560x440
Public opinion on military spending (002)