12. World military expenditure

Summary

Aggregate world military spending continued to fall in 1994, driven largely by
falling expenditure levels in the industrialized countries. Procurement bore
the brunt of the reductions in Russia and in NATO, where the cuts were mainly
led by the USA. Further planned US cuts in procurement may prove to be
unrealistic. In Russia the defence budget process appears to have settled down,
and the 1994 budget (not approved until July 1994) was for military expenditure
of 40.6 trillion roubles or 5.99% of GDP.

Military spending also declined in the CIS countries. The preponderance of cuts
in the industrialized countries and the FSU should not conceal the fact that
military expenditure is rising or remains at very high levels in regions such
as the Middle East and South Asia, where there appears to be a trend towards
increasing outlays. India and Pakistan increased their expenditure between 1992
and 1994 by 12% and 19.5%, respectively. As economies grow in South-East Asia,
the types of weapon being purchased there indicate clearly that major resources
are being committed to enhancing power-projection capabilities.

However, without reliable data on defence budgets, exchange rates and inflation
figures it is difficult to determine meaningful comparative statistics. Data on
China and the former Soviet republics are inadequate; and it has become more
difficult to gain access to transparent data on defence budgets for the CEE
countries in recent years. Because of these problems, SIPRI has not attempted
to produce an aggregate figure for world military spending.

Appendix 12A. Tables of world military expenditure

PAUL GEORGE, BENGT-GÖRAN BERGSTRAND AND EVAMARIA LOOSE-WEINTRAUB

Appendix 12B. Sources and methods

Appendix 12A contains tables of world military expenditure and appendix 12B
explains the sources and methods of the data collection.