Military budget worldwide increases significantly: War in Ukraine as a trigger

With its attack on Ukraine, the Kremlin has unleashed a new arms race worldwide. Moscow’s allies are also increasing their arms spending.

Warplanes fly in a formation over a landscape

Fighter jets from Italy, Poland and the US flew over NATO’s eastern flank in October 2022 Photo: Cover-images/imago

Russia’s invasion of Ukraine has sparked the strongest growth in the global military-industrial complex in 20 years. All of Russia’s neighboring countries – from Norway to Mongolia – are expanding their military capacities. Finland and Sweden join NATO, Latvia reintroduces conscription and Georgia increases defense spending to deter “aggressive forces”. The planet’s military budget is expected to hit a record high in 2023. And it won’t stop there. The Department of Data Journalism Novaya Gazeta has examined how the new arms race is developing.

As early as 2021, global defense spending will have reached $2 trillion (full 2022 figures are not yet publicly available) – six times more than what governments are spending on tackling climate change. In the past ten years alone the military budget according to the Stockholm International Peace Research Institute (SIPRI) globally up 9 percent in real terms.

Half of the spending in 2021 will come from just two countries, namely the United States (US) with $800 billion and China with $265 billion. In addition, at the beginning of the century China invested only 2 percent of the world military budget in defense; In 2021, Beijing spent 14 percent on it. For the next five years, China plans to increase its defense spending by 7 percent each year, which is at least twice the growth rate of US military-industrial complex financing.

Kazakhstan is one of the frontrunners in the armaments sector: defense spending increased by 75 percent

The whole world was in an arms race in 2022. The war in Europe has led to unprecedented spending on arms and an increase in armies – particularly in countries bordering Russia. In the coming years, the global defense industry is expected to reach new records: the Pentagon’s budget will increase by 10 percent by 2023, and defense spending in Europe will double by a factor and a half by 2026.

This will inevitably lead to higher taxes or lower spending on other government programs: “Every euro spent on defense is a euro not invested in health, housing, pensions and education,” says Alexandra Marksteiner, military expert at the Stockholm Peace Research Institute.

Neighboring countries are most afraid

Thirty-five of the 40 countries that account for more than 60 percent of global military spending increased their defense budgets in 2022. Kazakhstan is among the leaders in the defense sector: the country’s defense spending increased by 75 percent, and in July published that Wall Street Journal an article on the government’s plans to reform the army and strengthen ties with the US, China and Turkey in the face of the war in Ukraine.

In 2023, the growth of the military-industrial complex will accelerate. At the forefront of the planned military buildup is Poland, whose defense spending is set to nearly triple from $13 billion to $31 billion.

“The best strategy is to deter the enemy with the strength of your own army and by working together with others,” he said Poland’s Prime Minister Mateusz Morawiecki at a military exercise in November 2022. In 2023, funds for the Polish Ministry of Defense will exceed the military budgets of Ukraine, Turkey and almost all European countries combined.

Last November, two missiles landed on Polish territory near the Ukrainian border. Two weeks later, another hit military projectile Moldova.

Like Kazakhstan, Moldova plans to increase its military budget by 75 percent by 2023. “We must develop the armaments sector, including air defense, or join the various associations that already exist at EU level,” Moldovan Defense Minister Anatolie Nosatîi said at the Moldovan-European Integration Forum.

The third leading country in terms of defense industry growth is Armenia. Against the background of the conflict with Azerbaijan, the authorities intend to increase defense spending by a factor and a half. After recent border disputes, officials in the capital Yerevan complained about the lack of modern weapons in the Armenian army. Prime Minister Nikol Pashinyan said Russia failed to deliver arms and lost control of the Lachin Corridor connecting the Nagorno-Karabakh Republic with Armenia.

Turkey is the new leader in the arms race. Last year, Recep Tayyip Erdoğan’s government increased funding for the military by 30 percent and plans to increase it by another 50 percent in 2023. “As a result of increasing threats in the world and in our neighborhood, we are increasing our defense budget to a rather high level of 469 billion lira ($25 billion),” Turkey’s president said in October 2022. Meanwhile, the Turkish president called for Defense Ministers Greece and Cyprus to refrain from further weapon purchases in order not to “maneuver the situation into a dead end”.

“China and Turkey armed themselves 20 years ago and have now started a new round of rearmament to switch to more modern systems,” said military analyst Pavel Luzin. “China can spend large sums on this because the country has managed to build up a good industry in the country. The neighbors feel threatened and are also starting to invest in the defense industry.”

revival of NATO

The global armaments industry grew steadily until the end of the noughties. Then, in 2010, major economies, notably the US and UK, froze increases in their military budgets. After the Russian annexation of Crimea (2014) investments were resumed. At that point, the NATO bloc gathered for a summit in Wales to discuss “Russia’s actions against Ukraine that call into question the fundamental principles of a united, free and peaceful Europe”.

The meeting decided to “reverse the declining trend in defense budgets.” Allies pledged to spend at least 2 percent of GDP on their countries’ defense by 2024. In 2014, only the US, UK and Greece complied with this agreement. The Baltic states of Estonia, Latvia and Lithuania will be added by 2022, as well as Poland, Slovakia and Croatia. Turkey wants to reach 2 percent by 2024. However, it still remains at half of the 30-member alliance.

The Western European countries of Luxembourg, Spain and Belgium spend the least on defense, while on the border with Russia the NATO requirements have already been exceeded by all the Baltic states and Poland. “Not all members of the alliance will be able to reach the 2 percent,” says military expert Pavel Luzin. “But the most important countries have either already done it or will do so in the next few years.”

On July 5, 2022, the NATO member states signed the Protocols of accession for Finland and Sweden to the North Atlantic Council. Both countries can join the alliance once all alliance members have ratified the protocols – of the 30 states only Turkey and Hungary have not yet done so.

“De facto, Sweden and Finland are already members of the alliance,” says Luzin. “De jure they will be, even if Turkey continues to resist the idea, because Russia poses a direct threat to these countries and NATO is a guarantee of strengthening their security.”

For its part, Sweden has pledged to increase defense spending to 2 percent of GDP, as the alliance has been asking for since 2014. Finland has already reached this standard in 2021. Sixteen other countries have pledged to meet the alliance’s requirements by 2024.

Source: Stockholm International Peace Research Institute

The best defense is to help Ukraine

Lithuania has approved a record military budget for 2023 – 2.5 percent of the country’s GDP – and Vilnius is ready to increase it to 3 percent if necessary. Only Greece and the United States spend more on defense among NATO countries. According to Lithuanian Defense Minister Arvydas Anušauskas, this is necessary to continue helping Ukraine.

In the first 10 months of the war, military assistance to Kyiv reached $40 billion (excluding humanitarian and financial aid, which the country receives in parallel). The main donor is the United States: the Pentagon is responsible for 60 percent of the funds transferred to the Armed Forces of Ukraine (AFU).

For the US economy, however, this spending is far less significant than for European countries: for example, the US allocated 3 percent of the military budget and 0.001 percent of GDP to support Ukraine, while Estonia and Latvia each allocated 40 percent of national defense spending to Kyiv transferred.

According to Estonian Defense Minister Jüri Luik, “Today’s decisions in support of Ukraine reduce Russia’s chances of behaving irrationally in the Baltic region”. This means that “Kyiv’s victory in this war will also increase Estonia’s security”.

In the new year, Europe and the United States do not want to reduce their military support to Ukraine. British Prime Minister Rishi Sunak has pledged even more this year than the $2.8 billion he committed to the AFU in 2022. Sunak urges northern European countries to do the same: “We know your safety is our safety. We will continue to support Ukraine.”

From the Russian Gemma Terés Arilla

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