Special Report

10 Countries Spending the Most on the Military

488388649Global military spending continued to decline last year. Although arms expenditure has actually increased in much of the world, military spending in the United States — which still accounted for 37% of total global military spending in 2013 — has declined in recent years.

The Stockholm International Peace Research Institute (SIPRI) measures annual military spending for most of the world’s armed countries. According to SIPRI, the U.S. spent $618 billion on its military last year, more than three times the $171 billion budget of second place China. Based on SIPRI’s 2013 data, these are the countries with the largest military budgets.

Click here to see the countries that spend the most on the military

According to Dr. Sam Perlo-Freeman, senior researcher and head of the SIPRI Project on Military Expenditure, austerity measures account for the majority of the declines in military spending, particularly in Western Europe.

In the U.S., lower military spending was partly the result of efforts to reduce the deficit, but mostly due to the withdrawal from Iraq and Afghanistan. Since the peak of U.S. military expenditure in 2010, military spending has fallen 14% amidst growing concerns about the national debt. Similarly, the United Kingdom has dramatically reduced military expenditures following Prime Minister David Cameron’s call for financial responsibility.

In other countries — especially those where military spending was on the rise — military budgets were dependent on a number of factors. A country’s economy, for example, often mirrors military spending. “You need to have GDP growth to be able to afford higher military spending,” Perlo-Freeman said.

This was evident in China, where military spending has grown in proportion to the country’s economic growth. According to Perlo-Freeman, because personnel expenditure often accounts for the bulk of military spending, “when you see an economy growing, it’s entirely natural that [spending] would increase.”

Regional conflicts have also caused countries to increase the size of their military. Algeria, where the Arab Spring began in 2010, also became the first country in Africa with a military budget that exceeded $10 billion last year, likely due to instability within the country and unrest in the region. Similarly, mounting tension between Pakistan and India may have contributed to India becoming the world’s largest arms importer last year.

China’s significant military budget and the modernization of its armed forces have contributed to tensions in Southeast Asia and the East Asian Sea. Territorial disputes, combined with high spending, as Perlo-Freeman explained, have induced countries to expand the size of their military expenditures. Japan, for example, increased its military budget for the first time in 10 years due to recent territorial disputes with China.

Some countries fund military spending through oil revenues because it is a direct source of revenue for the government that avoids increasing taxes. Military spending depends on “the government to actually be able to collect some of the proceeds of [economic] growth,” mostly through taxation, Perlo-Freeman explained. However, increasing taxes for military spending is especially unpopular. “This is one of the reasons we often see such high shares of GDP devoted to spending in big-oil producers,” Perlo-Freeman said. Brazil, Saudi Arabia and Russia are all large oil-producing nations, as well as some of the world’s top military spenders.

To determine the top 10 countries that spent the most on their military in 2013, 24/7 Wall St. examined SIPRI data on military expenditure in over 170 countries. We reviewed SIPRI data on military exports, imports and military expenditure as a percentage of gross domestic product. We also reviewed GDP and GDP growth figures from the International Monetary Fund.

These are the countries with the highest military expenditures.

10. Brazil
> Military expenditure: $36.2 billion
> Expenditure as pct. of GDP: 1.4% (tied, 62nd lowest)
> 1-yr. spending change: -3.9% (26th lowest)
> Total arms imports: $254 million (24th highest)
> Total arms exports: $36 million (12th lowest)

Perhaps due to strong oil revenue, which can help bolster military spending without the need for unpopular tax hikes, Brazil’s military spending, along with many other developing nations, increased dramatically in the 2000s. In recent years, however, Brazil’s military spending has leveled off somewhat, decreasing by nearly 4% last year. The socioeconomic conditions in Brazil may account for some of its more than $36 billion military budget in 2013. The Brazilian military is often used to help keep order inside the country, especially in the favelas. These sprawling, impoverished neighborhoods are typically crime-ridden and often ruled by local drug lords rather than the nation’s formal laws. Similar conditions and ongoing drug cartel-related violence can be seen in several Central American countries where military spending has continued to rise in recent years.

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9. India
> Military expenditure: $49.1 billion
> Expenditure as pct. of GDP: 2.5% (31st highest)
> 1-yr. spending change: -0.7% (46th lowest)
> Total arms imports: $5.6 billion (the highest)
> Total arms exports: $10 million (10th lowest)

India has been among the world’s foremost arms importers for decades. The country continued to expand and modernize its military in 2013, importing $5.6 billion worth of arms. This drove military expenditures to account for 2.5% of GDP in 2013, among the higher proportions worldwide. High military spending was likely due to ongoing conflict between India and Pakistan that threatens the stability and welfare of people in both countries. While the country invests large amounts of money in its military, per capita GDP in India is among the lowest worldwide.

8. Germany
> Military expenditure: $49.3 billion
> Expenditure as pct. of GDP: 1.4% (tied, 62nd lowest)
> 1-yr. spending change: 0.0% (53rd lowest)
> Total arms imports: $129 million (36th highest)
> Total arms exports: $972 million (6th highest)

Germany’s estimated GDP per capita was more than $40,000 last year. As one of the world’s strongest economies, Germany has the means to maintain a well-supplied military. But while Germany spent among the most in nominal terms, its military expenditure accounted for just 1.4% of its GDP, one of the lower proportions. Since World War II, Germany has maintained a relatively passive role in global military affairs. However, like a majority of high-spending nations, particularly those in the West, Germany was one of the world’s top exporters of military goods. Germany exported an estimated $972 million in military supplies in 2013, more than all but a handful of countries. In addition, while most European countries cut military spending as part of their severe austerity measures, Germany increased its military expenditure by 2% between 2008 and last year.

7. United Kingdom
> Military expenditure: $56.2 billion
> Expenditure as pct. of GDP: 2.3% (34th highest)
> 1-yr. spending change: -2.6% (34th lowest)
> Total arms imports: $438 million (15th highest)
> Total arms exports: $1.4 billion (5th highest)

Despite deep cuts to military expenditures after a defense review in 2010, U.K. military spending was still among the highest worldwide. Prime Minister David Cameron began implementing fiscal austerity measures, including military spending cuts, shortly after he took office in mid-2010. Critics of Cameron’s efforts suggest that further military cuts will make the U.K. less reliable to its allies. Despite the cuts, military expenditure comprised 2.3% of GDP in 2013, one of the higher proportions worldwide. Additionally, the U.K. was the fifth largest arms exporter in 2013, providing $1.4 billion of arms to foreign allies.

6. Japan
> Military expenditure: $59.4 billion
> Expenditure as pct. of GDP: 1.0% (31st lowest)
> 1-yr. spending change: -0.2% (52nd lowest)
> Total arms imports: $145 million (34th highest)
> Total arms exports: N/A

A recently ignited territorial dispute with China in the East China Sea pushed Japan to increase its military budget in 2013 for the first time in more than 10 years. While Japan’s 2013 budget called for a 0.8% increase in military spending, total military expenditure remained fixed at 1% of GDP. As is often the case, an increase in military spending means reduced funding in other areas. In the case of Japan, high military spending may affect the country’s ability to bring down its national debt, which stood at 243% of GDP in 2013, the highest worldwide. By contrast, U.S. debt levels — which have come under political scrutiny in recent years — were at 104% of GDP in 2013.

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5. France
> Military expenditure: $62.3 billion
> Expenditure as pct. of GDP: 2.2% (39th highest)
> 1-yr. spending change: -2.3% (35th lowest)
> Total arms imports: $43 million (55th highest)
> Total arms exports: $1.5 billion (4th highest)

Like much of Western Europe, France’s military expenditure has fallen in recent years. France spent nearly $70 billion in 2009, versus more $62 billion last year. This decrease, however, was relatively small given the country’s weak economic growth and implementation of the austerity measures after the global economic crisis. France passed the Military Programming Law in 2013, which aims to keep the current level of military spending through 2019. France exported nearly $1.5 billion in military goods last year, more than all but three other countries. French arms exports have historically ended up in Africa, where France maintains ties with many of its former colonies.

4. Saudi Arabia
> Military expenditure: $62.8 billion
> Expenditure as pct. of GDP: 9.3% (2nd highest)
> 1-yr. spending change: 14.3% (16th highest)
> Total arms imports: $1.5 billion (4th highest)
> Total arms exports: N/A

Situated in an increasingly unstable region, Saudi Arabia hiked its military budget by 14.3% in 2013. Saudi neighbors include Iraq and Yemen, which are currently in turmoil. Saudi Arabia has also had historically poor relations with another neighbor, Iran, which could become an even bigger threat if it acquires nuclear capabilities. The large increase in military outlays is likely a direct response to these threats. The House of Saud aims to replace its current 20-year old weapon stores, including a heavy investment in missile defense systems. Like many of the countries with the biggest military budgets, Saudi Arabia benefits from one of the world’s largest oil reserves. At 9.3%, the country’s spending as a percentage of GDP was second only to Oman, another oil-rich nation in the Middle East.

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3. Russia
> Military expenditure: $84.9 billion
> Expenditure as pct. of GDP: 4.1% (10th highest)
> 1-yr. spending change: 4.8% (48th highest)
> Total arms imports: $148 million (33rd highest)
> Total arms exports: $8.3 billion (the highest)

Russia leads the rest of the world in military exports, with more than $8 billion worth last year, well above the U.S.’s $6.2 billion in exports. While total military spending in Russia remains a fraction of what it was in the late 1980s, it has been on the rise in recent years as a result of Russia’s involvement in various regional conflicts. With the more recent ongoing Crimean crisis, this spending trend may likely continue. The country’s military expenditure was roughly $85 billion last year compared to just $64.5 billion in 2009. Russia now spends 4.1% of its GDP on its military, exceeding that of the U.S. for the first time in over a decade. The dramatic increase is likely due in part to Russia’s stated plans to invest more than $700 billion to modernize its weapons system by 2020. According to some onlookers, making these improvements may be difficult given Russia’s low birth rates, poverty and lingering soviet-era corruption problems.

2. China 
> Military expenditure: $171.4 billion
> Expenditure as pct. of GDP: 2.0% (45th highest)
> 1-yr. spending change: 7.4% (36th highest)
> Total arms imports: $1.5 billion (3rd highest)
> Total arms exports: $1.8 billion (3rd highest)

Military spending often mirrors economic growth, and this is especially true in China where military spending has increased in each of the past five years roughly in line with economic growth. Military expenditure grew 7.4% last year alone, far more than any other country in the region, and among the larger annual growths worldwide. The value of China’s military exports trails only the U.S. and Russia, at around $1.8 billion last year. Unlike most other countries, China imported nearly as much in military goods as it exported, at $1.5 billion last year. According to Dr. Perlo-Freeman, a combination of increased Chinese military spending and rising regional tensions have encouraged higher military expenditures among neighboring countries like Vietnam, the Philippines and Japan.

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1. United States
> Military expenditure: $618.7 billion
> Expenditure as pct. of GDP: 3.8% (14th highest)
> 1-yr. spending change: -7.8% (12th lowest)
> Total arms imports: $759 million (8th highest)
> Total arms exports: $6.2 billion (2nd highest)

The $619 billion military expenditure in the U.S. nearly outpaced the combined spending of every other country on this list in 2013. At the start of 2013, the U.S. had nearly 8,000 nuclear warheads in reserve. Since 2001, U.S. defense spending has risen from $287 billion to $530 billion. In recent years, however, U.S. military outlays fell from 4.8% of GDP in 2009 to 3.8% in 2013. Reduction in military expenditures was due to a greater emphasis on fiscal austerity and the winding down of the conflicts in Iraq and Afghanistan. In fact, military expenditure fell nearly 6% in 2012, followed by a 7.8% reduction in 2013. Despite efforts to curtail the size of the military, the U.S. supplied nearly $6.2 billion in arms to foreign allies, a figure second only to Russia. The U.S. was also a large arms importer, bringing in $759 million worth of arms, among the higher rates worldwide.

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