World military expenditure falls, but China, Russia’s spending rises, and Australia still a big spender

World military expenditure totalled $1.75 trillion in 2012, a fall of 0.5 per cent in real terms since 2011, according to figures released today by SIPRIi.

Australia remains among the top five spenders in the Asia-Pacific region; and number 13 in the world, with $US2.2 billion spent in 2012. Australian spending fell 4% compared to 2011, but over the 10-year period has risen almost 30%.

The fall—the first since 1998—was driven by major spending cuts in the USA and Western and Central Europe, as well as in Australia, Canada and Japan. The reductions were, however, substantially offset by increased spending in Asia, Eastern Europe, the Middle East and North Africa, and Latin America. Spending in 2012 was still higher in real terms than the peak near the end of the cold war.

SIPRIi notes that this may indicate the beginning of a shift in the balance of world military spending away from the West, although it still accounts for a clear majority of global military spending.

The total world expenditure of $1.75 trillion is equivalent to 2.5 per cent of global GDP.

Some major spenders:

  • The USA’s military expenditure fell by 6 per cent in real terms in 2012, but it was still 69 per cent higher than in 2001.
  • Russian military expenditure rose 16 per cent in real terms in 2012. Further large rises are planned in 2013–15.
  • Military spending continued increasing in Asia in 2012, although at a slower rate than in previous years.
  • China’s military expenditure increased by 7.8 per cent in real terms. to $166 billion. Its military spending rose by 175 per cent in real terms between 2003 and 2012, the largest increase for the period among the top 15 spenders.
  • Other Asian countries with notable increases in military spending during the period 2003–12 were Viet Nam (130 per cent) and Indonesia (73 per cent). Both are investing heavily in naval equipment although SIPRIi notes they have different motivations for doing so.

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SIPRIi is an independent international institute dedicated to research into conflict, armaments, arms control and disarmament.It was initially established with funding from the Swedish government.