Global defense spending dips for first time in 15 years

Defense budget cuts in the US and Europe were more than enough to offset an increase in spending by rising powers like Russia and China.

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Global military spending dropped in 2012 -- the first such drop in 15 years – fueled primarily by major US and Western defense reductions that offset significant increases in military outlays made by Russia, China, and other nations, according to a Swedish defense watchdog.

Citing new figures it released today, The Stockholm International Peace Research Institute found that global spending on the military dropped 0.5 percent from 2011 to 2012, to a total of $1.75 trillion worldwide. The decrease was due in large part to reductions in spending in North America and Western and Central Europe, which accounted for almost 60 percent of the world's military expenditures, as the US wound down its wars in Iraq and Afghanistan and Europe cut budgets amid regional austerity.

SIPRI reports that US expenses dropped 6 percent from 2011 to a total of $682 billion in 2012. Although its spending still dwarfs that of all other nations -- SIPRI notes that the US spent more than the next 10 nations on the list combined -- its 39 percent share of global spending is the lowest it has been since 1991.

Much of the drop came from decreases in its operations Iraq and Afghanistan, which fell from $159 billion in 2011 to $115 billion in 2012. SIPRI anticipates that US military spending will continue to drop in the coming years, as the US completes its withdrawal from Afghanistan and sequestration takes effect upon the military budget, resulting in an estimated $55 billion drop every year through 2021.

Western and Central Europe, beset by the eurocrisis and ongoing austerity measures to contain it, saw a 1.6 percent drop in expenditures, primarily driven by cuts in Europe's south, which has been hardest hit by the economic recession.

The West's cuts to military spending were offset in major part by increases elsewhere in the world, particularly China and Russia, SIPRI adds. China and Russia, the second and third highest military spenders behind the US, both increased their outlays. China spent an estimated $166 billion in 2012, an increase of 7.8 percent from 2011, and Russia spent roughly $90.7 billion in 2012, a 16 percent increase over the previous year. Russia's increase was the largest among the top 15 military spenders in 2012.

China's increase in spending comes amid increasing tensions in East Asia over disputed waters among the various regional powers. China, Japan (the No. 6 military spender at $59.3 billion in 2012), Vietnam, the Philippines, and other nations all have made competing claims over islands -- and their associated underwater territories, which include fishing and natural resource stocks -- in the South China Sea and other regional waters.

Military concerns in the region have been further fueled by the ascension of new North Korean leader Kim Jong-un, who has adopted the belligerent rhetoric of his father and repeatedly threatened the US and South Korea (the No. 12 spender at $31.7 billion).

As a result, China has spent a great deal of attention on modernizing its military, "building advanced stealth jet fighters, developing an anti-ship missile that could keep US vessels 1,500 km (about 932 miles) away from the Chinese coastline, and refurbishing an old Soviet aircraft carrier with which to run sea trials," the Monitor reported last year.

Still, SIPRI researcher Sam Perlo-Freeman told the Associated Press that the gap in military spending between the US and China still measured about 4 to 1 in 2012, and that the gap in actual capability was even larger -- the US has 11 aircraft carriers compared to China's one Soviet hand-me-down, for example.

"It takes time for changes in military spending to translate into sustained changes in military capabilities," Mr. Perlo-Freeman said.

Russia's military spending boost comes amid President Vladimir Putin's promise to radically overhaul its military in the next decade. Before his election, Mr. Putin called for "$772 billion to be spent on 400 new intercontinental ballistic missiles, 2,300 late-generation tanks, 600 modern combat aircraft – including at least 100 military-purpose space planes – eight nuclear ballistic missile submarines, 50 surface warships as well as a whole new inventory of artillery, air defense systems, and about 17,000 new military vehicles," the Monitor reported a year ago.

Putin continued the drumbeat for an upgraded military in February, saying that "Russia’s armed forces must reach a fundamentally new capability level within the next 3-5 years."