Trends in World Military Expenditure 2021: SIPRI

In News

• Recently, the Stockholm International Peace Research Institute (SIPRI) published new data on global military spending.

Key Findings

• All time high: World military spending continued to grow in 2021, reaching an all-time high of $2.1 trillion despite the economic fallout of the pandemic.
• Five Largest Spenders in 2021:  
  • The U.S, 
  • China, 
  • India, 
  • the U.K and 
  • Russia
• Global world military expenditure: 
  • The global world military expenditure as a share of the world gross domestic product (GDP), fell by 0.1 percentage points, from 2.3% in 2020 to 2.2% in 2021.
  • Five Largest spenders together accounted for 62% of expenditure and the U.S. and China alone accounted for 52%.
• Asia and oceania: 
  • It totaled to $586 billion in 2021. Spending in the region was 3.5% higher than in 2020, continuing an uninterrupted upward trend dating back to at least 1989. 
  • The increase in 2021 was due primarily to growth in Chinese and Indian military spending. Together, the two countries accounted for 63% of total military expenditure in the region in 2021.
• Russia: 
  • Increased its military expenditure by 2.9% in 2021, to $65.9 billion, at a time when “it was building up its forces along the Ukrainian border. 
  • This was the third consecutive year of growth and Russia’s military spending reached 4.1% of GDP in 2021.
  • High oil and gas revenues helped Russia to boost its military spending in 2021.
• Ukraine: 
  • It had strengthened its defences against Russia, its military spending has risen by 72% since the annexation of Crimea in 2014, spending fell in 2021, to $5.9 billion, but still accounted for 3.2% of the country’s GDP.

Image Courtesy: SIPRI 

• NATO Members Spending:
  • Eight European North Atlantic Treaty Organization (NATO) members reached the Alliance’s target of spending 2% or more of GDP on their armed forces in 2021.
  • This is one fewer than in 2020 but up from two in 2014.
• Findings for India

• India’s military spending of $76.6 billion ranked third highest in the world. 
• This was up by 0.9% from 2020 and by 33% from 2012. 
• Amid ongoing tensions and border disputes with China and Pakistan that occasionally spill over into armed clashes, India has prioritised the modernization of its armed forces and self-reliance in arms production.
• In a drive to strengthen the indigenous arms industry, 64% of capital outlays in the 2021 Indian military budget were earmarked for acquisitions of domestically produced arms.

Challenges for India

• Opportunity Costs: 
  • Defence spending also has opportunity costs because it diverts resources from government programs that might do more to promote growth.
• Maintaining strong army: 
  • India has to maintain an over 15-lakh strong armed forces because of the two active and unresolved borders with China and Pakistan.
• Huge Pension Spending: 
  • India’s annual military expenditure also includes a huge pension bill for 33-lakh veterans and defence civilians.
  • In the 2021-2022 defence budget, for instance, the pension bill was Rs. 1.15 lakh crore out of the total Rs 4.78 lakh crore outlay.

Way Ahead

• With an assertive China, malicious Pakistan, and an unstable Afghanistan, securing India’s security environment should be top priority of India. 
• India has to continuously focus on achieving self-reliance in defence while building on the achievements of recent years.

Source: TH + sipri.org