World military spending: Increases in the U.S., Europe, decreases in oil-exporting countries

The countries with the largest relative increases in military spending between 2015 and 2016 are in Central Europe. Overall spending in Central Europe grew by 2.4 percent in 2016. “The growth in spending by many countries in Central Europe can be partly attributed to the perception of Russia posing a greater threat,” said Siemon Wezeman, Senior Researcher with the SIPRI AMEX program. “This is despite the fact that Russia’s spending in 2016 was only 27 percent of the combined total of European NATO members.”

Large falls in military expenditure in many oil-exporting countries
“Falling oil revenue and associated economic problems attached to the oil-price shock has forced many oil-exporting countries to reduce military spending,” said Dr. Nan Tian, Researcher with the SIPRI AMEX program. “For example, between 2015 and 2016 Saudi Arabia had the biggest absolute decrease in spending of $25.8 billion.”

The largest cuts in military expenditure in 2016 related to falling national oil revenues were in Venezuela (–56 percent), South Sudan (–54 percent), Azerbaijan (–36 percent), Iraq (–36 percent) and Saudi Arabia (–30 percent). Other notable decreases were seen in Angola, Ecuador, Kazakhstan, Mexico, Oman and Peru. Only 2 of the 15 countries with the largest falls in spending in 2016 are not oil exporters. However, a minority of oil-exporting countries, such as Algeria, Iran, Kuwait and Norway, are better equipped economically to deal with oil-price shocks and could continue with their existing spending plans in 2016.

Other notable developments

— World military spending in 2016 accounted for 2.2 percent of global GDP. Military spending as a share of GDP, was highest in the Middle East (for countries where data is available), with an average of 6.0 percent of GDP in 2016, while the lowest was in the Americas, with an average of 1.3 percent of GDP.

— Spending in Africa fell by 1.3 percent in 2016, a second year of decrease after 11 consecutive years of increases. This was mostly due to spending cuts in oil-exporting countries in sub-Saharan Africa (e.g. Angola and South Sudan).

— In Asia and Oceania, military expenditure rose by 4.6 percent in 2016. Spending levels are related to the many tensions in the region such as over territorial rights in the South China Sea.

— Military expenditure in Central America and the Caribbean and South America combined decreased by 7.8 percent to a level not seen since 2007. The fall is largely explained by spending reductions by oil-exporting countries such as Ecuador, Mexico, Peru and Venezuela. Brazil’s spending continued to decline as a result of a worsening economic crisis.

— There is no estimate for the Middle East as data is unavailable for several key spenders such as the United Arab Emirates. For countries where data is available, substantial increases were seen in Iran and Kuwait, while sizable decreases were noted in Iraq and Saudi Arabia.