Special Report

Countries Spending the Most on War

Thomas C. Frohlich

Published: April 14, 2016 4:52 am

Last Updated: March 13, 2020 4:54 pm

Military spending in the United States totaled $596 billion in 2015, far and away the largest annual military expenditure in the world at nearly three times that of second-place China. While the U.S. military will likely not be outspent any time soon, American defense expenditures have fallen each year since its most recent peak in 2010.

The nations of the world spent $1.68 trillion on their militaries in 2015, up slightly from 2014, the first global increase since 2011. Based on annual military spending estimates from the Stockholm International Peace Research Institute (SIPRI), 24/7 Wall St. reviewed the 10 with the largest military expenditures.

Click here to see the countries spending the most on military.

Click here to see the countries with the fastest growing militaries.

Click here to see the countries with the fastest shrinking militaries.

According to Dr. Sam Perlo-Freeman, senior researcher at SIPRI, the world’s top military spenders do not tend to change very much. Military expenditures by global super powers are so great that spending decreases often have little to no effect on a country’s ranking. For example, the United States military spending was $13.9 billion lower last year compared to the year before, the second-largest absolute decline after only Russia. Both countries still rank in the top 10 for military spending.

However, Perlo-Freeman added, there has been a considerable shift in the long term. “There has been this general tendency of the Western traditional European powers falling down the list, either because they have been cutting spending, or just because others have been increasing it so much.”

The United Kingdom had occupied the second-place position for many years as of 2006. Since then, it has fallen slowly to its current fifth place position. Meanwhile, China and Saudi Arabia have overtaken the U.K. and other major Western countries. China increased its military spending by $15.1 billion last year, by far the largest absolute increase. Saudi Arabia also bolstered its defense budget, adding $6.4 billion to its expenditure.

For Perlo-Freeman, the rise of Saudi Arabia’s military is extraordinary. The country started investing heavily in its military a few years ago, but while it started acquiring expensive equipment, the trained personnel and apparatus necessary to use it was severely lacking. Now, the country’s not-insubstantial military power is being used both internally to maintain the power of the regime, and externally in military exploits in Syria, Yemen, and other countries.

The fight against terrorism has been a factor in military spending for a long time. Most of the world’s largest military powers are engaged either in fighting wars overseas against terrorist groups, against states that claim to support them, or both. Perlo-Freeman noted that there is also a domestic aspect, of particular relevance for France. “They recently justified their planned increases to the defense budget in the coming years on the basis of using the military on the streets in a counter terror role.”

To identify the countries with the fastest rising and fastest falling military budgets, 24/7 Wall St. reviewed 2015 military expenditures estimated by the Stockholm International Peace Research Institute (SIPRI) in its most recent annual “Trends in World Military Expenditure, 2015” report. Spending as a share of GDP, per capita expenditure, and absolute spending figures for 2015, 2014, and 2006 also came from SIPRI. Military expenditure data include all current and capital expenditure on:

• The armed forces, including peacekeeping forces
• Defence ministries and other government agencies engaged in defence projects
• Paramilitary forces, when judged to be trained and equipped for military operations
• Military space activities
• Military and civil personnel, including retirement pensions and social services for military personnel
• Operations and maintenance
• Procurement
• Military research and development
• Military aid (in the military expenditure of the donor country)

We also considered 2015, 2014, and 2006 per capita GDP from the International Monetary Fund (IMF). Gross domestic product is based on purchasing power parity (PPP) and is in current international dollars.

These are the countries spending the most on the military.

10. South Korea
> Military expenditure: $36.4 billion
> Pct. change military expenditure, 2006-2015: 36.7%
> Expenditure as pct. of GDP: 2.6%
> Per capita military expenditure: $720

South Korea’s annual military expenditure of $36.4 billion is the 10th largest worldwide. Of the top 10 military spenders, South Korea is one of only a few countries with mandatory military service. Like the relatively large defense budget, South Korea’s conscription policy is due largely to tensions with its neighbor, North Korea. The isolated Korean dictatorship has recently achieved nuclear capabilities, triggering further spending increases in South Korea — which is bound by a nuclear non-proliferation treaty.

9. Germany
> Military expenditure: $39.4 billion
> Pct. change military expenditure, 2006-2015: 2.8%
> Expenditure as pct. of GDP: 1.2%
> Per capita military expenditure: $482

In light of the growing refugee crisis in Europe, Russian military shows of power such as the annexation of Crimea, and the growing threats of organized terrorist groups, a number of European countries have signaled military spending increases. Also, German Chancellor Angela Merkel indicated recently that, due in part to pressures from the United States, the parliament should make adjustments to the military budget next year.

Germany is one of the wealthiest nations in the world. Its per capita GDP of $46,896 is the 15th highest of countries reviewed. The country spends a relatively small share of its GDP on defense, at just 1.2%.

8. Japan
> Military expenditure: $40.9 billion
> Pct. change military expenditure, 2006-2015: -0.5%
> Expenditure as pct. of GDP: 1.0%
> Per capita military expenditure: $323

Japan’s utter defeat during World War II — 2.7 million Japanese lives were lost — crippled the country’s military. In the new American-written constitution, Japan was prohibited from having a military and permitted to fight only under direct attack. Due to the island nation’s powerful economy, however, the Japanese Self-Defence Force, while technically pacifist, is still one of the world’s largest. Despite only a modest 1.0% increase last year and 0.5% decline over the last 10 years, Japan overtook Germany last year in defense spending, although this was mainly due to the euro’s continued long-term drop against the dollar. In May 2015, Japanese Prime Minister Shinzo Abe proposed revisions that would loosen the post-war restrictions. The proposed legislation passed in July.

7. France
> Military expenditure: $50.9 billion
> Pct. change military expenditure, 2006-2015: -5.9%
> Expenditure as pct. of GDP: 2.1%
> Per capita military expenditure: $792

France, one of the top three military spenders in Europe, has reduced military spending by 4.5% last year and by 5.9% over the last 10 years — relatively large declines. Military expenditure still comprises more than 2% of French GDP — the stated benchmark for NATO countries and a goal strongly encouraged by other superpowers such as the United Kingdom and United States. Like the U.K. and Germany, France has also indicated it will increase spending in future years. While President Francois Hollande has supported budget cuts to reduce French national debt, he also stated in April of last year that France will raise security spending. The move is likely tied to the heightened threats from terror attacks, and any defense budget cuts may not be welcome after the November 2015 Paris terrorist attacks.

6. India
> Military expenditure: $51.3 billion
> Pct. change military expenditure, 2006-2015: 43.1%
> Expenditure as pct. of GDP: 2.3%
> Per capita military expenditure: $40

India’s military expenditure of $51.3 billion grew by 0.4% last year, one of the smaller growth rates, particularly when compared to other national spending growths in the region — India is the second largest military spender after China in the Asia and Oceania region. However, India plans to increase spending by approximately 8% in 2016, according to SIPRI. The Indian government, led by Prime Minister Narendra Modi, has prioritized the modernization of its armed forces as well as shifting to more domestic sources to move out of its status as the world’s largest arms importer.

The planned increase is also likely due in part to tensions with Pakistan. Also, as is true for a number of other nations in the greater region, the spending growth is partially a reaction to the ever-expanding military strength of China, according to SIPRI.

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5. United Kingdom
> Military expenditure: $55.5 billion
> Pct. change military expenditure, 2006-2015: -7.2%
> Expenditure as pct. of GDP: 2.0%
> Per capita military expenditure: $854

While military spending in the U.K. rose by 0.9% last year, its position in the top 10 countries has steadily fallen from its once dominant second-place spot in 2006, and the nation’s arms expenditure dropped by 7.2% over the last 10 years. Largely due to strong urging by the United States, the U.K. spends around 2.0% of its GDP on the military, in line with the threshold suggested by NATO. As is the case with the United States, a portion of U.K. military spending goes to U.K.-based arms manufacturers. BAE Systems, the third largest arms-producing and military service company in the world, is based in the United Kingdom.

4. Russia
> Military expenditure: $66.4 billion
> Pct. change military expenditure, 2006-2015: 91.3%
> Expenditure as pct. of GDP: 5.4%
> Per capita military expenditure: $454

The world’s largest military spenders do not necessarily have the largest expenditures as a percentage of GDP. Russia, however, is one of the top military spenders in the world in terms of both annual spending and expenditure as a share of GDP, which at 5.4% is the seventh highest globally. Russia is the only country on this list to record a decline in GDP per capita last year. Despite the weak economic conditions, however, the country’s defense spending is on the rise. The number of Russian companies ranking among the world’s largest arms manufacturers also continues to increase. According to SIPRI, surrounding countries such as Poland and Romania also increased military spending in large part due to fears of threats from Russia. These fears have arisen primarily from Russia’s annexation of Crimea in 2014.

3. Saudi Arabia
> Military expenditure: $87.2 billion
> Pct. change military expenditure, 2006-2015: 97.1%
> Expenditure as pct. of GDP: 13.7%
> Per capita military expenditure: $2,778

At an estimated 266.6 billion barrels, Saudi Arabia has the second largest proven crude oil reserves in the world after Venezuela. With the precipitous drop in oil prices in recent years, a number of other oil-dependent nations reduced their defense budgets. Despite the decline in oil prices, Saudi Arabia has consistently amassed immense oil wealth that ensured stable economic conditions and allowed larger military expenditures. The country’s annual defense spending of $87.2 billion is the third highest in the world and far and away the largest in the Middle East. Military spending in Saudi Arabia nearly doubled over the past 10 years.

As Perlo-Freeman explained, the Saudi military is also quite active. Notably, the country has led military operations in Yemen and Syria in recent years.

2. China
> Military expenditure: $214.8 billion
> Pct. change military expenditure, 2006-2015: 131.7%
> Expenditure as pct. of GDP: 1.9%
> Per capita military expenditure: $156

While China’s military expenditure of $214.8 billion trails the United States by a considerable margin, it is still an enormous investment. Chinese military expenditure, at quadruple India’s spending, accounts for roughly half of all defense spending in the region. Reports of China’s slowing economic growth have not hindered the country from further investing in its military. Over the last 10 years, China’s military expenditure shot up 131.7%, the 15th largest such growth of all countries reviewed.

Like Russia and other military superpowers, Chinese military activities in the South China Sea have triggered defense spending spikes in bordering nations such as the Philippines, Vietnam, and Indonesia.

1. USA
> Military expenditure: $596.0 billion
> Pct. change military expenditure, 2006-2015: -3.9%
> Expenditure as pct. of GDP: 3.3%
> Per capita military expenditure: $1,854

Annual U.S. military spending accounts for 36% of the world’s military spending. No other country comes close to spending as much as the United States — neither in absolute terms nor as a share of global military expenditure. The United States spends close to three times more than second-place China on its military. Following the Great Recession, and the withdrawal from Iraq and Afghanistan, the U.S. defense budget has declined for several years. However, the 2015 decline of 2.4% was the smallest cutback since 2011.

A considerable portion of the country’s military budget is spent on equipment manufactured by U.S. companies. Of the world’s 10 largest arms manufacturers — such as Lockheed Martin, Boeing, and Raytheon — seven are based in the United States.