Worrying defense spending trends

At first glance the latest annual report on military spending by the Stockholm International Peace Research Institute (SIPRI) is reason to cheer. Worldwide military expenditures dropped for the first time since 1998, shrinking 0.5 percent in real terms over 2011.

But scrutinize the numbers and the applause will be short-lived. Much of the decline reflected cutbacks in the United States as it winds down two wars, as well as reductions throughout the West as part of the austerity mentality that has been imposed in the wake of the global financial crisis and economic crisis in Europe.

The world remains an unsafe place, but there are real reasons to question whether spending a large amount of money on the military actually makes the world more secure.

According to the SIPRI report, which is considered authoritative, military spending totaled $1.753 trillion in 2012. That figure represents a drop of 0.5 percent in real terms from 2011, a trend that is to be applauded.

Still, the total accounts for 2.5 percent of global gross domestic product, and remains higher than the previous peak in military spending recorded near the end of the Cold War.

The United States continues to outspend all other countries. Military spending in the U.S. fell 6 percent, to $682 billion. The bulk of that reduction comes from the winding down of spending on the two wars in Iraq and Afghanistan; additional cuts are anticipated in 2013. For the first time since the end of the superpower confrontation and the collapse of the Soviet Union, the U.S. share of world military spending fell below 40 percent.

But those cuts have not undermined the huge U.S. lead in spending. Last year, Washington spent more than the next 10 biggest military spenders combined. It spent almost 70 percent more last year than it did in 2001, before the invasion of Afghanistan. The U.S. retains the largest, most formidable and modern military in the history of mankind.

Much of the rest of the decline reflected smaller defense budgets in other developed economies such as Western Europe, Australia, Canada and Japan. Unfortunately, those cuts were offset by rising defense spending in many developing nations.

The result, reported Dr. Sam Perlo-Freeman, director of SIPRI’s Military Expenditure and Arms Production Program, is that “we may be at the beginning of a shift in the balance of world military spending from the rich Western countries to emerging regions.”

This process will take time. The developed world still accounts for the majority of defense expenditures: NATO countries alone spent over $1 trillion on defense last year.

In Asia, trends are mixed. Overall, defense spending continues to increase, although the rate of expansion is slowing. The average annual rate of military spending increase in the region has been cut in half from 7.0 percent per year in 2003-2009, to 3.4 percent per year in 2009-2012.

Most analysts attribute that to the problems of the Chinese economy. That country’s military continues its modernization efforts, but the pace is slowing in tandem with the overall economy. In fact, the real problem with Chinese spending is not the rate of change but its lack of transparency: China has not indicated how long it will continue its breakneck military modernization effort or what its ultimate purpose is.

Defense of national interests is one thing; an assertive foreign policy that aims to bully its neighbors is another.

Overall, five Asia nations — Japan, China, India, Australia and South Korea — cracked the top 15. Japan was fifth on the list, overtaking France, despite a decline in defense spending of 0.6 percent. Japanese spending remains capped at 1 percent of GDP, but when the economy is the third largest in the world, 1 percent is still a big sum. The administration of Prime Minister Shinzo Abe has promised to spend more money on defense to better prepare the nation for various contingencies and to adapt to a new regional security environment.

The basic question, however, is whether military spending is the most effective means to secure the nation. Japan has for many years championed the concept of comprehensive security, which acknowledges that national security is the product of a mix of factors, only some of which are military in nature.

While Japan has been slow to adapt to the changing security environment, with the Self-Defense Forces more focused on a threat from the northwest rather than the southwest, its traditional focus on promoting security through economic development, support for rule-based, diplomatic solutions to disputes, and addressing the root causes of unrest has born dividends.

Indeed, since as many experts note, rising defense spending reflects rising prosperity, rather than a greater feeling of insecurity, Japan’s restraint is even more important, setting an example for other nations and demonstrating that success does not demand a huge military.

Quite often, security planners ask if they are getting enough bang for their buck. Japan should be asking another question: Does it need more “bangs” to ensure its national security?

Of course, Japan has to be prepared to defend itself and be a good ally. But it should fight the urge to narrow its thinking about security. An all-inclusive approach to national security may well pay even greater dividends.