World Military Expenditure Passes $2 Trillion for First Time

‘High oil and gas revenues helped Russia to boost its military spending in 2021. Russian military expenditure had been in decline between 2016 and 2019 as a result of low energy prices combined with sanctions in response to Russia’s annexation of Crimea in 2014,’ said Lucie Béraud-Sudreau, Director of SIPRI’s Military Expenditure and Arms Production Programme.

The ‘national defence’ budget line, which accounts for around three-quarters of Russia’s total military spending and includes funding for operational costs as well as arms procurement, was revised upwards over the course of the year. The final figure was $48.4 billion, 14 per cent higher than had been budgeted at the end of 2020.

As it has strengthened its defences against Russia, Ukraine’s military spending has risen by 72 per cent since the annexation of Crimea in 2014. Spending fell in 2021, to $5.9 billion, but still accounted for 3.2 per cent of the country’s GDP.

Continued Increases by Major Spenders in Asia and Oceania
China, the world’s second largest spender, allocated an estimated $293 billion to its military in 2021, an increase of 4.7 per cent compared with 2020. China’s military spending has grown for 27 consecutive years. The 2021 Chinese budget was the first under the 14th Five-Year Plan, which runs until 2025.

Following initial approval of its 2021 budget, the Japanese Government added $7.0 billion to military spending. As a result, spending rose by 7.3 per cent, to $54.1 billion in 2021, the highest annual increase since 1972. Australian military spending also increased in 2021: by 4.0 per cent, to reach $31.8 billion.

‘China’s growing assertiveness in and around the South and the East China seas have become a major driver of military spending in countries such as Australia and Japan,’ said SIPRI Senior Researcher Dr Nan Tian. ‘An example is the AUKUS trilateral security agreement between Australia, the United Kingdom and the United States that foresees the supply of eight nuclear-powered submarines to Australia at an estimated cost of up to $128 billion.’

Other Notable Developments:         

·  In 2021 Iran’s military budget increased for the first time in four years, to $24.6 billion. Funding for the Islamic Revolutionary Guard Corps continued to grow in 2021—by 14 per cent compared with 2020—and accounted for 34 per cent of Iran’s total military spending.

·  Eight European North Atlantic Treaty Organization (NATO) members reached the Alliance’s target of spending 2 per cent or more of GDP on their armed forces in 2021. This is one fewer than in 2020 but up from two in 2014.

·  Nigeria raised its military spending by 56 per cent in 2021, to reach $4.5 billion. The rise came in response to numerous security challenges such as violent extremism and separatist insurgencies.

·  Germany—the third largest spender in Central and Western Europe—spent $56.0 billion on its military in 2021, or 1.3 per cent of its GDP. Military spending was 1.4 per cent lower compared with 2020 due to inflation.

·  In 2021 Qatar’s military spending was $11.6 billion, making it the fifth largest spender in the Middle East. Qatar’s military spending in 2021 was 434 per cent higher than in 2010, when the country last released spending data before 2021.

·  India’s military spending of $76.6 billion ranked third highest in the world. This was up by 0.9 per cent from 2020 and by 33 per cent from 2012. In a push to strengthen the indigenous arms industry, 64 per cent of capital outlays in the military budget of 2021 were earmarked for acquisitions of domestically produced arms.