Expert Speak Raisina Debates
Published on May 02, 2020
Asian military spending sees a spike

According to the latest report from the Stockholm International Peace Research Institute (SIPRI), Asia has seen a big spike in its military spending. Within Asia, China and India are at the second and third positions and the US continues to occupy the number one slot in the global ranking on military spending. The United States recorded an increase of 5.3 percent over 2018 to spend around US $732 billion. The US budget accounts for about 38 percent of the total global defence expenditure.

It should be noted that all calculations of military spending, especially across nations, is fraught with difficulties. Countries hide their budgets for obvious reasons. But as important, there are methodological problems because countries also include different items in their defence budget. Nevertheless, such cross-nation comparisons are useful at least to outline the broad trends in defence spending, despite all these problems.

The SIPRI report indicates that China’s military spending went up to US $261 billion in 2019, an increase of 5.1 percent compared to 2018, while India’s defence spending has gone up to US $71.1 billion, which is roughly 6.8 percent increase over the previous year.  SIPRI states that the global military expenditure, estimated to be around $1917 billion in 2019, has seen the largest annual growth since 2010. The annual growth rate is approximately 3.6 percent from 2018. The top five countries – the US, China, India, Russia and Saudi Arabia – accounts for the majority of this spending, at 62 percent of the total. Other major military spenders in the Indo-Pacific include Japan at US $47.6 billion and South Korea at US $43.9 billion. There has been an increase in military spending in South East Asia as well, which recorded a 4.2 percent hike in 2019 to reach US $40.5 billion.

The big changes in the global pecking order is Russia becoming the fourth largest spender and Saudi Arabia sliding to the fifth position. Riyadh undertook a massive cut of 16 percent in its defence spending, leading to its slide. Regarding Russia’s rise in the ranking as a consequence of a hike of 4.5 percent over the last year, SIPRI researcher Alexandra Kuimova  said that the Russian military budget at 3.9 percent of its GDP was “among the highest in Europe in 2019.”

SIPRI data shows that the Asian military spending has been going up since 1989, possibly as a consequence of the increasing wealth in this region. Nevertheless, given the changing power balance in the Indo-Pacific and China’s aggressive posturing and belligerent behaviour, this trend is likely to continue as  part of the uptick is possibly the result of upgrading of military spending to address the China challenge. China’s aggressive military posturing and continuing air and naval intrusions into each of the smaller neighbours in the neighbourhood continue to be a worrying development, which will only accelerate the pace of military spending in the Indo-Pacific. Life cycle driven military modernisation is also a factor which pushes military spending higher.

But such growth in military expenditure also carries some risks. The region has several hot spots in terms of potential conflicts, be it the Korean Peninsula, South China Sea, Sino-Indian border or India-Pakistan. Many of these disputes result from unresolved border and territorial as well as sovereignty issues that continue to flare up every so often.

But in the coming years, there could be a downward spiral due to the corona virus pandemic. South Korea and Thailand have already announced budget cuts for the coming year.  Seoul plans to reduce the defence spending by 2 percent in the 2020 budget, whereas Bangkok has plans for an almost 8 percent cut in the 2020 defence budget. India has had low defence budget allocations for several years. India’s current defence spending is the lowest since the 1962 Sino-Indian border war, but it is also expected to follow suit in the next financial year. While the economic impact of the Covid-19 pandemic could be severe for countries like India, the security compulsions will continue to be major imperatives for Indian budget allocation to rise in the coming years.

These two opposing trends will decide where Asian defence spending will go up in the next couple of years. On the one hand, the pandemic likely will put pressure on defence budgets.  On the other hand, the increasing insecurity and tension could provide incentives for the budgets to grow. Which of these trends will dominate is difficult to predict but it will depend on the amount of damage that the pandemic will do to various national economies, and the level of insecurity that China will foist on the region by its attempt to use the pandemic as an opportunity to expand.

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Rajeswari Pillai Rajagopalan

Rajeswari Pillai Rajagopalan

Dr Rajeswari (Raji) Pillai Rajagopalan is the Director of the Centre for Security, Strategy and Technology (CSST) at the Observer Research Foundation, New Delhi.  Dr ...

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