May 4, 2022 - 10:14 am

World Military Spending Reaches Record Levels

    The global military expenditure has reached an all-time high, passing $2 trillion in 2021, according to a report by a leading defence think-tank based in Sweden, as spending increased for the seventh consecutive year. The United States, China, India, the United Kingdom and Russia were the top five defence spenders, together accounting for 62 percent of the global expenditure, according to new data published by the Stockholm International Peace Research Institute (SIPRI). SIPRI considered it the highest figure they ever had.

    The Covid-19 pandemic has impacted the global economy but countries continue to spend more on their military budget. The budget rose by 0.7 % as compared to the last year. While in 2020, the defence expenditure accounted for 2.3% of the global GDP, in 2021, it decreased to 2.2%. The US spent USD 801 billion, 1.4% less than what they spent in 2020. China spent USD 293 billion, 4.7% more than what they spent in 2020. India spent USD 76.6 billion, which was 0.9% more than what it spent in 2020 and 33% more than what it spent in 2012. SIPRI mentioned that 64% of India’s defence budget “was earmarked for acquisitions of domestically produced arms. The fourth-place holder, UK, spent USD 68.4 billion, 3% more than what it spent in 2020. Russia spent USD 65.9 billion, which was 2.9% more than what it spent in 2020.

       The country’s military buildup has in turn caused its regional neighbours to beef up their military budgets, with Japan adding $7bn, an increase of 7.3 percent – the highest annual increase since 1972. Australia also spent four percent more on its military, reaching $31.8bn in 2021. Iran’s military budget increased for the first time in four years to $24.6 billion. Funding for the Islamic Revolutionary Guard Corps grew 14 per cent as compared to 2020 and amounted to 34 per cent of the country’s total military expenditure. The country was the fifth largest spender in the Middle East with military spend of $11.6 billion, an increase of 434 per cent from 2010, which is when it last released its military spending data. The country’s military spending rose 72 per cent as it sharpened its defences against Russia following the annexation of Crimea in 2014. While it fell in 2021, Ukraine’s spend of $5.9 billion accounted for 3.2 per cent of the country’s GDP. As tensions have increased in Europe, more NATO countries have stepped up spending. Eight member countries last year reached the targeted two percent of GDP for spending, one fewer than the year before but up from only two in 2014, SIPRI said.

      One of the main reasons for India’s jump was the ongoing stand-off at the Line of Actual Control (LAC) in Ladakh between India and China since April 2020. In a drive to strengthen the Indian defence industry, 64 per cent of capital outlays in the 2021 defence budget was earmarked for acquisitions of domestically-produced arms. Amid ongoing tensions and border disputes with China and Pakistan that occasionally spill over into armed clashes, India has prioritised the modernisation of its armed forces and self-reliance in arms production. Promoting Make-in-India in the defence sector, the ministry is procuring defence equipment from indigenous firms and reducing the dependence on foreign entities. The Indian defence forces are expected to spend an estimated USD 130 billion (in capital procurement in the next 5 years). It is noteworthy that the Indian government increased FDI limits in the sector. In 2020, the limit reached 74% to 49 per cent.

    Established in 1996, Stockholm International Peace Research Institute (SIPRI) is an independent international institute devoted to research into conflict, armaments, arms control and disarmament. Based in Stockholm, it provides data, analysis and recommendations to policymakers, researchers, media and others on the basis of open sources. The institute was founded through a decision taken by the Swedish Parliament and receives its major funding from the Swedish Government. 

    Having read aforesaid it is lucid that there is a rat-race among countries to beef up arsenal etc. The crucial point here to note that defence spending also has opportunity costs because it diverts resources from government programs that might do more to promote growth. In changing world, where climate change, poverty, income inequality etc. are challenges, the world seems to divert itself from real issues. If humanity is not in the core of topic, God knows which path the world chooses to tread on.

Questions and Answers Questions and Answers

Question : How much did the global military expenditure pass in 2021?
Answers : $2 trillion
Question : How much of the global expenditure did the United States, China, India, the United Kingdom and Russia account for?
Answers : 62%
Question : How much of the global GDP did the defence expenditure account for in 2020?
Answers : 2.30%
Question : What country was the top defence spender?
Answers : US
Question : How much money did China spend in 2020?
Answers : USD 293 billion
Question : How much money did India spend in 2021?
Answers : USD 76.6 billion
Question : How many of India's defence budget was earmarked for acquisitions of domestically produced arms?
Answers : 64%
Question : How much money did Ukraine spend in 2021?
Answers : $5.9 billion
Question : What country has stepped up spending as tensions have increased in Europe?
Answers : NATO