While global economic output shrank by 3.3 percent, military spending rose by 2.6 percent in 2020 to a new high of 1,651 billion euros. This development is not a contradiction, but rather reflects current geopolitical realities and the procurement logic of armed forces, says former security policy expert Brigadier General Walter Feichtinger.
Once again this year, renowned research institutions presented the (estimated) global defense spending at the end of April. Even if the figures differ slightly, the message remains the same: more money is being invested in armed forces than ever before. According to the Swedish peace research institute SIPRI, the USA (639 billion euros) and China (207 billion) invested the most in their armies last year, followed by India (59.9 billion), Russia (50.7 billion), the UK (48.7 billion) and Saudi Arabia (47.3 billion). Germany (43.4 billion) recorded a sharp increase and is now just ahead of France (43.3 billion). This continued a trend that has been in place since 2015 and which – at least for the time being – could not even be halted by coronavirus. What appears paradoxical at first glance – falling government revenue and higher defense spending – can, however, be explained by three aspects. Firstly, military spending is primarily driven by medium and long-term threat assessments and claims to power that need to be backed up militarily. In view of the tensions in the Indo-Pacific, the Kashmir conflict and border disputes between China and India, it is therefore no coincidence that the USA, China and India top the list and that Beijing has seen the strongest increase of the top 15 countries with a 76% rise since 2011. Russia fell well short of its plans with an increase of 2.5 percent, but had continuous growth from 2000 to 2017. Turkey even recorded a decrease of 5 percent in 2020, although, like Russia, it is increasingly basing its foreign policy on the military. Since 2011, however, Ankara’s military budget has grown by a record 77%, particularly as a result of its military involvement in Syria.
“In view of geopolitical developments and the pressure to modernize, significant declines in military budgets are not to be expected.
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Another reason for the growing military budgets is, secondly, the NATO commitments of many countries. As is well known, each alliance country is to invest two percent of its GDP in its armed forces by 2024; the current average of the European partners is 1.52 percent. As many as 12 of the 30 NATO countries are already meeting the target, while Germany, which was criticized by former US President Donald Trump, is still at 1.56% despite a significant increase. The UK, on the other hand, is underlining its geopolitical ambitions with considerable additional spending and extensive investment plans. Thirdly, new technologies are forcing many armies to make adjustments and invest in new equipment. The cyber sector, drones and hypersonic weapons are particularly worthy of mention here. The modernization of existing equipment and systems, for example through powerful computer or communication systems (digitalization), also requires considerable sums of money. Cycles are becoming shorter and shorter, even for nuclear weapons. In addition, complex procurement projects are designed for the long term and are contractually fixed. Short-notice changes or even cancellations would therefore be expensive and would jeopardize overall planning. Will the arms spiral continue, regardless of the financial difficulties of many countries? There is still no clear answer to this question.
There will certainly be attempts to reduce defense spending in order to balance the budget. This was already evident after the 2008 financial crisis. However, in view of geopolitical developments and the need for modernization, significant reductions are not to be expected.
