Military Spending: Australia Compared

Military spending has been in decline in many countries throughout the world and Australia is no exception as the charts below show. 

Source: World Bank

There are several ways to consider and compare global military spending. One way is to consider the level of spending as a percentage of a country's GDP. Comparing military spending as a percentage of GDP allows us to consider how much of economic growth is taken up with military expenditures.

While the United States has the world's largest military by far it ranks only 13th on the level of spending as a percentage of GDP. (see tables at the bottom for rankings)

Australia's military spending as a percentage of GDP is below the world average and is now below the average for East Asia and the Pacific. We still spend proportionally more than Indonesia, although if the Indonesian economy becomes considerably larger than the Australian economy over coming years, as many commentators believe is likely, then its total spend will also be considerably larger than Australia's. 

Australia also spends less than comparably wealthy countries represented by the OECD.

Rank	Country	2013
1	Oman	11.48
2	Saudi Arabia	8.99
3	Afghanistan	6.24
4	Israel	5.63
5	Angola	5.01
6	Algeria	4.95
7	Azerbaijan	4.68
8	Lebanon	4.36
9	Russian Federation	4.19
10	Armenia	4.10
11	Yemen, Rep.	3.93
12	Morocco	3.90
13	United States	3.81
14	Bahrain	3.77
15	Jordan	3.56
16	Mauritania	3.56
17	Iraq	3.54
18	Colombia	3.44
19	Pakistan	3.39
20	Singapore	3.27
21	Kyrgyz Republic	3.24
22	Namibia	3.15
23	Ecuador	3.11
24	Swaziland	2.96
25	Ukraine	2.93
26	Zimbabwe	2.78
27	Georgia	2.74
28	Sri Lanka	2.71
29	Korea, Rep.	2.60
30	Brunei Darussalam	2.56
31	Greece	2.46
32	India	2.45
33	Turkey	2.33
34	United Kingdom	2.30
35	France	2.24
36	Burundi	2.24
37	Vietnam	2.18
38	Portugal	2.17
39	Serbia	2.17
40	Uganda	2.16
41	Lesotho	2.15
42	China	2.05
43	Botswana	2.02
44	Tunisia	2.01
45	Chile	1.96
46	Estonia	1.96
47	Kenya	1.95
48	Uruguay	1.87
49	Timor-Leste	1.81
50	Poland	1.79
51	Zambia	1.69
52	Egypt, Arab Rep.	1.67
53	Croatia	1.66
54	Australia	1.63
55	Cambodia	1.60
56	Paraguay	1.60
57	Bulgaria	1.58
58	Italy	1.58
59	Montenegro	1.57
60	Malaysia	1.55
61	Thailand	1.52
62	Bolivia	1.45
63	Nepal	1.43
64	Peru	1.42
65	Norway	1.41
66	Burkina Faso	1.41
67	Mali	1.41
68	Brazil	1.40
69	Congo, Dem. Rep.	1.40
70	Denmark	1.38
71	Bangladesh	1.37
72	Malawi	1.36
73	Belarus	1.35
74	Fiji	1.34
75	Germany	1.34
76	Cameroon	1.34
77	Romania	1.33
78	Gabon	1.32
79	Albania	1.30
80	Netherlands	1.29
81	Philippines	1.28
82	Finland	1.27
83	Kazakhstan	1.25
84	Honduras	1.24
85	Macedonia, FYR	1.24
86	Venezuela, RB	1.21
87	South Africa	1.17
88	Sweden	1.17
89	Tanzania	1.15
90	Bosnia and Herzegovina	1.13
91	Rwanda	1.11
92	El Salvador	1.10
93	Czech Republic	1.08
94	Guyana	1.07
95	Belize	1.04
96	Belgium	1.04
97	Benin	1.04
98	Seychelles	1.03
99	Canada	1.01
100	New Zealand	1.00
101	Japan	0.99
102	Spain	0.94
103	Indonesia	0.90
104	Jamaica	0.85
105	Ethiopia	0.82
106	Switzerland	0.78
107	Austria	0.78
108	Nicaragua	0.76
109	Liberia	0.75
110	Argentina	0.74
111	Mexico	0.62
112	Dominican Republic	0.61
113	Papua New Guinea	0.57
114	Ireland	0.55
115	Ghana	0.53
116	Madagascar	0.51
117	Luxembourg	0.51
118	Cabo Verde	0.50
119	Guatemala	0.48
120	Nigeria	0.47

US military spending has declined over recent years, whilst China's has increased. Since 2004 Chinese military spending has increased by 170 per cent, whilst its GDP Has increased by 140 per cent. Still China only spends 2.05 per cent of its GDP while the US spends 3.81 per cent. Japan, due to its pacifist constitution still spends just under 1 per cent.

The table below constructed from SIPRI databases shows basic measure alluded to above of total military spending converted to US Dollars. It shows the top 60 military spenders in the world (New Zealand comes in at 60). 

Figures are in US$m. at 2013 prices and exchange rates.

Rank	Country	2013
1	USA	640221
2	China, P. R.	188460
3	Russia	87836
4	Saudi Arabia	66996
5	France	61228
6	UK	57891
7	Germany	48790
8	Japan	48604
9	India	47398
10	Korea, South	33937
11	Italy	32657
12	Brazil	31456
13	Australia	23963
14	Turkey	19085
15	Canada	18460
16	Israel	16032
17	Colombia	13003
18	Spain	12765
19	Taiwan	10530
20	Algeria	10402
21	Netherlands	10328
22	Singapore	9759
23	Poland	9257
24	Oman	9246
25	Iraq	7896
26	Indonesia	7840
27	Mexico	7838
28	Pakistan	7641
29	Norway	7235
30	Sweden	6519
31	Angola	6095
32	Greece	5939
33	Thailand	5891
34	Kuwait	5815
35	Chile	5435
36	Ukraine	5338
37	Venezuela	5313
38	Belgium	5264
39	Switzerland	5053
40	Malaysia	4842
41	Portugal	4784
42	Denmark	4553
43	Argentina	4511
44	Egypt	4255
45	South Africa	4108
46	Morocco	4064
47	Philippines	3472
48	Azerbaijan	3440
49	Viet Nam	3387
50	Finland	3262
51	Austria	3230
52	Peru	2865
53	Ecuador	2803
54	Kazakhstan	2799
55	Romania	2521
56	Nigeria	2411
57	Myanmar	2211
58	Czech Rep.	2149
59	Lebanon	1936
60	New Zealand	1833

Global Military Spending

There are several ways to consider and compare global military spending. The most obvious way is to calculate total military spending and convert to US Dollars. Another important measure is to consider the level of spending as a percentage of a country's GDP. We start with the second way first. (See the end of the post for a definition of military spending)

I constructed this from a World Bank database (based on SIPRI Stockholm International Peace Research Institute figures). Comparing military spending as a percentage of GDP allows us to consider how much of economic growth is taken up with military expenditures.

While the United States has the world's largest military by far it ranks only 13th on the level of spending as a percentage of GDP. Importantly SIPRI doesn't construct figures for North Korea. Estimates for North Korea range from 20-33 per cent of GDP.

Rank	Country	2013
1	Oman	11.48
2	Saudi Arabia	8.99
3	Afghanistan	6.24
4	Israel	5.63
5	Angola	5.01
6	Algeria	4.95
7	Azerbaijan	4.68
8	Lebanon	4.36
9	Russian Federation	4.19
10	Armenia	4.10
11	Yemen, Rep.	3.93
12	Morocco	3.90
13	United States	3.81
14	Bahrain	3.77
15	Jordan	3.56
16	Mauritania	3.56
17	Iraq	3.54
18	Colombia	3.44
19	Pakistan	3.39
20	Singapore	3.27
21	Kyrgyz Republic	3.24
22	Namibia	3.15
23	Ecuador	3.11
24	Swaziland	2.96
25	Ukraine	2.93
26	Zimbabwe	2.78
27	Georgia	2.74
28	Sri Lanka	2.71
29	Korea, Rep.	2.60
30	Brunei Darussalam	2.56
31	Greece	2.46
32	India	2.45
33	Turkey	2.33
34	United Kingdom	2.30
35	France	2.24
36	Burundi	2.24
37	Vietnam	2.18
38	Portugal	2.17
39	Serbia	2.17
40	Uganda	2.16
41	Lesotho	2.15
42	China	2.05
43	Botswana	2.02
44	Tunisia	2.01
45	Chile	1.96
46	Estonia	1.96
47	Kenya	1.95
48	Uruguay	1.87
49	Timor-Leste	1.81
50	Poland	1.79
51	Zambia	1.69
52	Egypt, Arab Rep.	1.67
53	Croatia	1.66
54	Australia	1.63
55	Cambodia	1.60
56	Paraguay	1.60
57	Bulgaria	1.58
58	Italy	1.58
59	Montenegro	1.57
60	Malaysia	1.55
61	Thailand	1.52
62	Bolivia	1.45
63	Nepal	1.43
64	Peru	1.42
65	Norway	1.41
66	Burkina Faso	1.41
67	Mali	1.41
68	Brazil	1.40
69	Congo, Dem. Rep.	1.40
70	Denmark	1.38
71	Bangladesh	1.37
72	Malawi	1.36
73	Belarus	1.35
74	Fiji	1.34
75	Germany	1.34
76	Cameroon	1.34
77	Romania	1.33
78	Gabon	1.32
79	Albania	1.30
80	Netherlands	1.29
81	Philippines	1.28
82	Finland	1.27
83	Kazakhstan	1.25
84	Honduras	1.24
85	Macedonia, FYR	1.24
86	Venezuela, RB	1.21
87	South Africa	1.17
88	Sweden	1.17
89	Tanzania	1.15
90	Bosnia and Herzegovina	1.13
91	Rwanda	1.11
92	El Salvador	1.10
93	Czech Republic	1.08
94	Guyana	1.07
95	Belize	1.04
96	Belgium	1.04
97	Benin	1.04
98	Seychelles	1.03
99	Canada	1.01
100	New Zealand	1.00
101	Japan	0.99
102	Spain	0.94
103	Indonesia	0.90
104	Jamaica	0.85
105	Ethiopia	0.82
106	Switzerland	0.78
107	Austria	0.78
108	Nicaragua	0.76
109	Liberia	0.75
110	Argentina	0.74
111	Mexico	0.62
112	Dominican Republic	0.61
113	Papua New Guinea	0.57
114	Ireland	0.55
115	Ghana	0.53
116	Madagascar	0.51
117	Luxembourg	0.51
118	Cabo Verde	0.50
119	Guatemala	0.48
120	Nigeria	0.47

US military spending has declined over recent years, whilst China's has increased. Since 2004 Chinese military spending has increased by 170 per cent, whilst its GDP Has increased by 140 per cent. Still China only spends 2.05 per cent of its GDP while the US spends 3.81 per cent. Japan, due to its pacifist constitution still spends just under 1 per cent. 

The table below constructed from SIPRI databases shows basic measure alluded to above of total military spending converted to US Dollars. It shows the top 60 military spenders in the world (New Zealand comes in at 60). 

Figures are in US$m. at 2013 prices and exchange rates. 

Rank	Country	2013
1	USA	640221
2	China, P. R.	188460
3	Russia	87836
4	Saudi Arabia	66996
5	France	61228
6	UK	57891
7	Germany	48790
8	Japan	48604
9	India	47398
10	Korea, South	33937
11	Italy	32657
12	Brazil	31456
13	Australia	23963
14	Turkey	19085
15	Canada	18460
16	Israel	16032
17	Colombia	13003
18	Spain	12765
19	Taiwan	10530
20	Algeria	10402
21	Netherlands	10328
22	Singapore	9759
23	Poland	9257
24	Oman	9246
25	Iraq	7896
26	Indonesia	7840
27	Mexico	7838
28	Pakistan	7641
29	Norway	7235
30	Sweden	6519
31	Angola	6095
32	Greece	5939
33	Thailand	5891
34	Kuwait	5815
35	Chile	5435
36	Ukraine	5338
37	Venezuela	5313
38	Belgium	5264
39	Switzerland	5053
40	Malaysia	4842
41	Portugal	4784
42	Denmark	4553
43	Argentina	4511
44	Egypt	4255
45	South Africa	4108
46	Morocco	4064
47	Philippines	3472
48	Azerbaijan	3440
49	Viet Nam	3387
50	Finland	3262
51	Austria	3230
52	Peru	2865
53	Ecuador	2803
54	Kazakhstan	2799
55	Romania	2521
56	Nigeria	2411
57	Myanmar	2211
58	Czech Rep.	2149
59	Lebanon	1936
60	New Zealand	1833

In terms of total military spending the US still dominates with 37 per cent of the total compared to China's 11 per cent. This means that China's spending is about 30 per cent of the US figure. 

Note that these figures are measured in US dollars meaning they are subject to the same problems of measurement outlined in How Big, How Rich, How Developed. Constructed on a PPP basis, Chinese military expenditure would be more substantial as a percentage of the total.

The table from the PDA (Project on Defense Alternatives) below shows different measures for military spending from SIPRI and IISS (International Institute for Strategic Studies).

What this table makes clear is that how we measure military expenditure matters for our perceptions about China's rise and US relative decline. However, it also seems reasonably clear that the US retains an overwhelming military dominance regardless of the measure. 

Australia, despite significant declines in spending as a percentage of GDP ranks as the 13th largest military spender. 

Given the Abbott government's focus on the seriousness of the Islamic terrorist challenge and promises made, it seems clear that military spending will rise in coming years as will expenditure on domestic policing and surveillance. 

Military expenditures data from SIPRI are derived from the NATO definition, which includes all current and capital expenditures on the armed forces, including peacekeeping forces; defense ministries and other government agencies engaged in defense projects; paramilitary forces, if these are judged to be trained and equipped for military operations; and military space activities. Such expenditures include military and civil personnel, including retirement pensions of military personnel and social services for personnel; operation and maintenance; procurement; military research and development; and military aid (in the military expenditures of the donor country). Excluded are civil defense and current expenditures for previous military activities, such as for veterans' benefits, demobilization, conversion, and destruction of weapons. This definition cannot be applied for all countries, however, since that would require much more detailed information than is available about what is included in military budgets and off-budget military expenditure items. (For example, military budgets might or might not cover civil defense, reserves and auxiliary forces, police and paramilitary forces, dual-purpose forces such as military and civilian police, military grants in kind, pensions for military personnel, and social security contributions paid by one part of government to another.)

Stockholm International Peace Research Institute (SIPRI), Yearbook: Armaments, Disarmament and International Security.