Special Report

Countries Spending the Most on War

ThinkstockPhotos-469165363Global military spending totaled $1.78 trillion in 2014, down slightly from the year before. Military expenditures in North America, Western and European countries continued to slowly decline, while spending rose in Asia, the Middle East, and Eastern Europe. The United States still accounted for more than one-third of military spending worldwide.

The Stockholm International Peace Research Institute (SIPRI) measures annual military spending for most of the world’s armed countries. According to SIPRI, the United States spent $610 billion on its military last year, several times the $216.4 billion budget of second place China. Based on nominal military expenditure figures, these are the countries with the largest military budgets.

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

According to Dr. Sam Perlo-Freeman, head of the SIPRI military expenditure project, the top 10 countries for military spending are either very large, very rich, or both. “Apart from that, there is really very little they have in common,” Perlo-Freeman said. Four of the 10 countries are among the most populous nations in the world. The economies of these countries were among the world’s largest. GDP per capita in six of the 10 countries were among the 25 largest in the world.

The United States stands out — far and away — as the world’s most dominant global superpower. While U.S. military spending has declined from its 2010 peak, spending remains at historically high levels. The expenditure is still far higher than it was during the Cold War, according to Perlo-Freeman, and still higher than in 2001 — just before 9/11.

Large economies allow for governments to raise high revenues through regular types of taxation of individuals and business. As Perlo-Freeman explained, high military expenditures often depend on “revenues from taxing the full range of economic activities within the country.”

A prosperous economy can also result in higher military expenditures. Compensation of personnel is often among the largest operational military costs, and as a population’s wealth grows, the government should ensure soldiers and officers are compensated accordingly. This partly accounts for the growing expenditures in China, where military spending has roughly mirrored the nation’s economic growth. “Otherwise,” Perlo-Freeman said, “you have discontented, low morale, low skilled people in your armed forces.”

In other countries, such as Saudi Arabia and to some extent Russia, oil revenues make up a significant portion of funding sources for the military. Saudi Arabia is able to maintain its substantial military spending without any of the taxes on which most other countries rely.

Perlo-Freeman suggested that the exceptionally high spending in the U.S. reflects a perception that there are “potentially military threats everywhere.” Other top countries for military expenditure have immediate conflicts on their borders. South Korea, Japan, India, and Saudi Arabia are all involved in relatively isolated regional disputes. Russia’s foray into Ukraine and subsequent annexation of Crimea had larger, international ramifications. These conflicts largely account for the high military spending in these countries.

To identify the countries spending the most on their military, 24/7 Wall St. reviewed total military expenditures in 2014 in more than 170 countries from SIPRI. We looked at expenditure data from each year since 2005. For the purpose of comparison, historical data are in inflation-adjusted 2011 dollars. We reviewed SIPRI data on military exports, imports, and military expenditure as a percentage of gross domestic product, as well as a percentage of government spending. We also looked at GDP and GDP growth figures from the International Monetary Fund (IMF). In addition, we reviewed 2013 military personnel figures from the World Bank.

These are the countries spending the most on the military.

10. South Korea
> Military expenditure:
$36.7 billion
> Pct. change military expenditure, 2005-2014: 34.1%
> Expenditure as pct. of GDP: 2.6%
> Military expenditure per capita: $741

South Korea, formally the Republic of Korea, increased its military spending by $757 million from 2013 to 2014. The increase made South Korea the only nation advancing into the ranks of the 10 countries spending the most on the military, displacing Brazil. Military service is compulsory for all South Koreans 20 to 30 years old who have completed middle school. South Korea had a standing army of 659,500 active personnel in 2013. South Korea, an Asian nation roughly the size of Pennsylvania is on constant alert because of tensions with neighboring North Korea, officially the Democratic People’s Republic of Korea. On a recent visit to South Korea, U.S. Secretary of Defense Ashton Carter was greeted with news that North Korea had fired two surface-to-air missiles despite a United Nations ban on such actions. Secretary Carter said the launch was an illustration of continuing tension in the region.

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9. Japan
> Military expenditure:
$45.8 billion
> Pct. change military expenditure, 2005-2014: -3.7%
> Expenditure as pct. of GDP: 1.0%
> Military expenditure per capita: $360

The 3.7% decrease in Japan’s military spending since 2005 may be about to change. The Japanese government, in January 2015, approved the nation’s largest military budget since World War II despite the country’s still struggling economy. Japan’s military spending dropped 3.7% from fourth highest in 2005 but the significant increase in spending could reverse this trend. Japan’s military spending was just 1.0% of its GDP, the lowest share of any of the 10 countries with the highest levels of military spending. The Asian island nation almost the size of California had a 259,800 all-volunteer military open to those 18 and over. Japan recently began to change its pacifist policy instituted after WWII. The increase in the military budget may be due to rising tensions with China over territories in the East China Sea.

8. Germany
> Military expenditure:
$46.5 billion
> Pct. change military expenditure, 2005-2014: -0.8%
> Expenditure as pct. of GDP: 1.2%
> Military expenditure per capita: $562

Germany’s military spending fell for the second straight year in 2014. It has slipped 0.8% since 2005. The European nation plays a key role in the defense of the continent. Since World War II, Germany has maintained a relatively passive role in global military affairs. It now has an all-volunteer army after conscription ended in July 2011. Germany had an army of 181,500 active personnel in 2013. Military spending amounted to just 1.2% of total GDP in Germany, the second lowest share of the 10 countries with the highest levels of military spending. Boasting one of the world’s strongest economies, Germany could afford to spend more. The country was one of a few wealthy nations not to meet NATO’s recommended 2% of GDP military expenditure. Stil, Germany has taken steps to support its nearby allies. In February 2015, Germany’s Defense Minister Ursula von der Leyen visited former Soviet bloc members Estonia and Latvia as a show of support after Russia annexed Crimea in 2014.

7. India
> Military expenditure:
$50.0 billion
> Pct. change military expenditure, 2005-2014: 38.7%
> Expenditure as pct. of GDP: 2.4%
> Military expenditure per capita: $39

Despite being a growing open-market economy, India spent only $39 per capita on its military in 2014, by far the lowest amount of any of the countries in the top 10 for overall defense spending. China, for example, which had the second lowest per capita military expenditure, spent $155 for each of its citizens. The world’s second most populous country, with 1.2 billion people, India has an army of 2.75 million active personnel, second in size only to China’s 3.0 million strong armed forces. India does not have a draft but accepts men 16 to 18 as volunteers for military service. Women may join the military for non-combat roles only. India’s relations with other nations are complicated. The South Asian country recently held joint military training exercises with Chinese rival Nepal, just as historic adversary Pakistan began joint exercises with Russia. India recently agreed to send a military contingent to Moscow for Russia’s victory day celebration of its defeat of Germany in World War II.

6. United Kingdom
> Military expenditure:
$60.5 billion
> Pct. change military expenditure, 2005-2014: -5.5%
> Expenditure as pct. of GDP: 2.2%
> Military expenditure per capita: $952

The United Kingdom’s 2014 military spending declined by 5.5% from 2005, the largest decline of any of the 10 countries with the highest levels of military spending. The drop is consistent with Britain’s austerity program adopted in the wake of the 2008-2009 global financial crisis. The U.K.’s per capita military spending fell from eighth highest in the world in 2005 to 12th highest in 2014. As a result of the cut, the U.K.’s armed forces shrank from 217,000 active personnel in 2005 to 159,150 in 2013. The U.K. has an all-volunteer military. Women are included in military services but not in ground combat. The U.K. spent $952 per capita on its military, one of the highest levels in the world. The head of the British army, General Sir Nicholas Carter, recently criticized the makeup of Britain’s armed forces, noting the need to recruit more visible and ethnic minorities in proportion to their share of the country’s population.

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5. France
> Military expenditure:
$62.3 billion
> Pct. change military expenditure, 2005-2014: -3.2%
> Expenditure as pct. of GDP: 2.2%
> Military expenditure per capita: $964

In 2005, France spent $837 per capita on its military, the ninth highest amount of all countries. In 2014, per capita spending was $964, 11th highest in the world. Overall, French military spending fell 3.2% from third highest in 2005, as total spending has declined from $65.1 billion in 2005 to $63.0 billion in 2011 dollars last year. In the last three years, the size of the all-volunteer French military has dropped to 318,400 active personnel in 2013 from 359,000 in 2005. The cuts have been so severe that the heads of the French Army, Navy, and Airforce as well as the head of France’s joint chiefs of staff reportedly threatened to resign if the government makes more cuts to the military budget. They cautioned that any more cuts could undermine France’s ability to pursue its military missions abroad.

4. Saudi Arabia
> Military expenditure:
$80.8 billion
> Pct. change military expenditure, 2005-2014: 112.1%
> Expenditure as pct. of GDP: 10.4%
> Military expenditure per capita: $2,747

Saudi Arabia’s military spending exploded by 112% from 2005 to 2014, vaulting the Middle Eastern kingdom from 10th place. Saudi Arabia has an all-volunteer army of about 251,500 active personnel in 2013 for its more than 27 million residents. Saudi military spending was about 10.4% of the country’s GDP, second only to Oman’s 11.6%. The Saudis allocate 25.9% of all government spending to military, more than any other nation. Against that spending, though, the kingdom’s international disputes appear relatively minor. The kingdom had to reinforce security barriers along sections of its border with Yemen to forestall illegal cross-border activities. At the end of March 2015, a Saudi-led coalition began air strikes in an effort to repel Shiite rebels supported by Iran.

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3. Russia
> Military expenditure:
$84.5 billion
> Pct. change military expenditure, 2005-2014: 97.4%
> Expenditure as pct. of GDP: 4.5%
> Military expenditure per capita: $593

Russia annexed Crimea from Ukraine in March 2014 and began aiding pro-Russian rebels in eastern Ukraine, the West claims. As a result, the United States and European Union imposed sanctions on Russia, causing heightened tensions between the powers and leading some to suggest the Cold War has resumed. The international drama intensified as Russia continued to ramp up its military spending. The 97.4% growth in spending since 2005 was one of the largest growth rates of all nations, largely due to spending hikes in the last three years. Not only has there been an absolute growth in spending, but also military spending has steadily increased as a share of the nation’s GDP, from 3.7% in 2011 to 4.5% in 2014, 12th most in the world. Because of its size — 142.5 million people making it the 10th most populous country in the world — Russia’s 2014 per capita military spending of $593 was 20th highest in the world, down slightly from one year earlier. Russia’s 1.26 million-person conscripted military force is the fifth largest in the world.

2. China
> Military expenditure:
$216.4 billion
> Pct. change military expenditure, 2005-2014: 167.4%
> Expenditure as pct. of GDP: 2.1%
> Military expenditure per capita: $155

China’s military spending increased by 167.4% since 2005 to a total of $190,974 billion last year — in 2011 dollars — the largest expenditure after only the U.S. The spending growth was the 10th largest increase and mostly reflects the country’s rapid economic growth in recent years. While China’s tax base is not as strong as many other developed nations, its population is so large that a bulk of its revenue still comes from taxation. China’s 2013 GDP of $9.5 trillion was the second-largest in the world and up substantially from 2005. The country had a standing army of about 3 million soldiers in 2013, the largest worldwide. In a recent report published by the state-run military news outlet, China’s People’s Liberation Army is ready to fight a war with Japan, another top military spender.

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1. United States
> Military expenditure:
$609.9 billion
> Pct. change military expenditure, 2005-2014: -0.4%
> Expenditure as pct. of GDP: 3.5%
> Military expenditure per capita: $1,891

While U.S.’ military expenditure in 2014 was relatively flat from 2005, it is still by far the largest military spending in the world and several times greater than second-place China. U.S. military spending has fluctuated over the years, but the country has outspent every other nation in the world since at least 2005. Last year, military spending equalled 3.5% of U.S. GDP, the 22nd highest share among countries reviewed. Dr. Perlo-Freeman suggested that the nation’s exceptionally high spending reflects its role as the dominant global superpower and the perception that there are “potentially military threats everywhere.” The U.S. has an estimated 7,100 nuclear warheads, trailing only Russia. The country is also home to several top arms companies, including United Technologies, Raytheon, and Boeing. Still, largely as a result of fiscal austerity and the scaling back of the Iraq and Afghanistan conflicts, U.S. military spending as a percent of total government spending fell from 10.4% in 2013 to 9.5% in 2014.

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