June 3, 2010 1:13 pm

Arms spending rises despite downturn

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Worldwide military expenditure surged to more than $1,500bn in 2009, defying the global financial downturn, according to a leading think-tank.

Military expenditure rose 5.9 per cent in real terms last year to $1,531bn compared with 2008 as governments continued to invest despite the hard economic times. The US, the world’s largest defence market, accounted for 54 per cent of the increase, the Stockholm International Peace Research Institute said in its annual report on arms spending on Wednesday.

“The far-reaching effects of the global financial crisis and economic recession appear to have had little impact on world military expenditure,” it said.

Although the US led the rise, it was not alone, Sipri added. Of those countries for which data were available, 65 per cent increased their military spending in real terms in 2009, with Asia and Oceania showing the fastest real terms increase with 8.9 per cent.

Most major economies boosted public spending to counteract the recession, postponing deficit reduction, but while military expenditure was not a big feature of most stimulus packages it was not generally cut either, Sipri said.

The figures also demonstrate “that for major or intermediate powers such as the USA, China, Russia, India and Brazil, military spending represents a strategic choice that they are willing to make even in hard economic times,” said Dr Sam Perlo-Freeman, head of the military expenditure project at the think-tank.

The conflict in Afghanistan is also proving costly to many countries with a substantial troop presence there. The known cost of peace operations – including Afghanistan – reached a new high of $9.1bn in 2009, with the number of personnel deployed to such operations reaching a record 219 278. The jump, said Sipri, was due to troop reinforcement for existing peace operations, “most significantly” for the Nato-led operations in Afghanistan.

The US itself more than doubled its troop levels in Afghanistan in 2009, while its annual spending in the country now exceeds that in Iraq – $65bn was proposed for Afghanistan, compared with $61bn for Iraq in the government’s budget request for 2010.

US military spending overall has continued to rise under the Obama administration, partly due to the Afghanistan conflict. It rose 7.7 per cent in real terms last year to $661bn – more than six times as much as China, the second-biggest spender before France, the UK and Russia.

Notably, over the past decade, China’s military spending surged 217 per cent compared with a 76 per cent rise in the US.

The outlook for spending is less certain, however. SipriI warns that the need to cut budget deficits might deter spending in the coming years.

“For many countries, the need to cut deficits will mean a reckoning in 2010 or 2011, in which military spending will likely be one area that comes under scrutiny for potential cuts,” it said.

“For others, however, this reckoning may be delayed, or may not come at all. In the USA, the Obama administration’s budgets for financial years 2010 and 2011 show US military spending – boosted by the escalating conflict in Afghanistan – continuing its seemingly inexorable rise, crisis or no.”

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