Worldwide Military Spending Levels Out For First Time In 13 Years: Study

April 17, 2012Marketsby EW News Desk Team

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Worldwide military expenditure increased by just 0.3 percent from 2010 to 2011, compared to annual average increases of 4.5 percent between 2001 and 2009, said a study published by the Stockholm International Peace Research Institute (SIPRI) on Tuesday.

SIPRI noted that the relatively small increase reflected an end to a run of continuous high increases in military spending for over 13 years; and said that the trend could continue if the world’s top military spenders continued seeing cuts in their budgets.

Brazil, France, Germany, India, the U.K., and the U.S. in particular were the ones that made significant cuts in their military budgets last year; with The U.S., the world’s top military spender, cutting their military expenditure last year by 1.2 percent, or $8.7 billion.

The budget cuts in these countries made up for military spending increases in emerging states, most notably China and Russia said SIPRI, who increased their spending by 6 percent and 9 percent respectively.

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“The after-effects of the global economic crisis, especially deficit-reduction measures in the USA and Europe, have finally brought the decade-long rise in military spending to a halt—at least for now”, stated Dr Sam Perlo-Freeman, head of the SIPRI Military Expenditure Project.

The three top spenders in Western Europe – France, Germany and the UK – had reduced spending as part of austerity measures imposed to reduce budget deficits, while far larger cuts were being made in Greece, Spain, Italy and Ireland as a result of their sovereign debt crises. Most central European countries also made severe cuts, said SIPRI.

Among the other notable regional developments in military expenditure included Asia and Oceania, which saw their spending increase by 2.4 percent last year – most likely fuelled by China’s $8.2 billion and compensated somewhat by a 3.9 percent decrease ($1.9 billion) in India’s military expenditure.

Africa also saw an increase of 8.6 percent, with the majority of the figure accounted for by a 44 percent ($2.5 billion) increase by Algeria – partly due to concerns over the conflict in Libya.

Latin America’s military spending on the other hand fell by 3.3 percent in 2011. The region’s leading spender, Brazil, cut its 2011 military budget by 8.2 per cent, or $2.8 billion, as part of efforts to cool its economy and reduce inflation. The resulting fall accounted for almost all of the regional fall in Latin America.

SIPRI noted though that the Middle East was the only region where a clear increasing pattern was discernible for most countries, with the lack of data for key players such as Iran and the United Arab Emirates (UAE) making the regional total highly uncertain.

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“While we are likely to see some further falls in the USA and Europe in the next few years, trends in Asia, Africa and the Middle East continue to be upward for now, and any major new war could change the picture dramatically,” said Dr Perlo-Freeman.

Therefore “it is too early to say whether the flattening of military spending in 2011 represents a long-term change of trend,” he added.