Fayez Nureldine / AFP / Getty Images

Report: Military spending spikes in Middle East, Eastern Europe

Military budgets declined slightly in the US in 2014, but China, Russia and Saudi Arabia all spent more, research shows

Global military spending remained flat in 2014 as cuts in the United States and Western Europe were offset by a binge of arms buying in the Middle East, Eastern Europe and Africa, according to an annual report from the Stockholm International Peace Research Institute (SIPRI).

Global military expenditure for 2014 was about $1.8 trillion, a marginal .4 percent decline from the previous year and the third consecutive decline, SIPRI researchers found.

The U.S., which is by far the world’s largest military spender, is driving that downward trend. U.S. military spending fell 6.5 percent last year due to budget cuts and the gradual drawdown of troops from Iraq and Afghanistan. At $610 billion, the U.S. still spent nearly three times as much as China, the world’s second-biggest military spender.

Excluding the U.S., however, “total military expenditure for the ‘rest of the world’ has increased continuously since 1998 and was up by 3.1 percent in 2014,” the SIPRI researchers found. The three largest spenders after the U.S. – China, Russia and Saudi Arabia – all ramped up their military spending considerably in 2014, each for different reasons.

Saudi Arabia saw the largest jump of the top-15 spenders, boosting its expenditures by a massive 17 percent. According to SIPRI, this increase is "a reflection both of the continuing conflict and instability in the surrounding region and of the revenues available to the government from the high price of oil that prevailed."

The political unrest of the Arab Spring coupled with Iran's growing influence across the Middle East have made autocratic Sunni regimes like Saudi Arabia increasingly security-minded. Last month, a Saudi-led coalition of predominantly Sunni Arab states — including Egypt, the UAE and Qatar — announced the creation of a joint military force that analysts have dubbed an "Arab NATO." Coupled with the regional military spending boom, the newly-formed force is seen as an effort to counter the expansion of Iran, the regional Shia power, at a time when their traditional ally, Washington, appears less inclined to intervene.

Eastern Europe was another hotspot in 2014 and will likely be this year as well, SIPRI found. Russia’s 8 percent jump in spending reflects, in part, its confrontation with the West over the crisis in Ukraine. After the pro-Western uprising in Kiev last year spurred Russia to intervene on behalf of the country's pro-Russian rebels, a tense standoff has played out between Moscow and NATO, the Western military alliance that backs the Ukrainian government. The conflict has encouraged defense spending not only by Ukraine and Russia, but also in Poland and the Baltic States, former Soviet republics that feel threatened by the Kremlin's aggressive bearing in the region.

“Russia’s been the driving force of that; they’ve been increasing spending and feeling very vulnerable to NATO,” said Samuel Perlo-Freeman, Head of the SIPRI Project on Military Expenditure and one of the report’s authors.

For China, military spending has grown consistently along with its economy and geopolitical ambitions, Perlo-Freeman said. Chinese military spending has roughly tracked the country's GDP, both of which have been expanding by about 10 percent each of the past few years.

High oil prices of recent years – which plummeted late last year – are another factor spurring arms spending across the board. Apart from petro-giants like Russia and the Gulf states, smaller producers like Algeria and Angola have also channeled booming oil export revenue towards their militaries – with 12 percent and 7 percent bumps in spending, respectively – even in the absence of involvement in armed conflict. Oil “provides a very easy, quick source of revenue for governments for such acquisitions, without having to tax people,” Perlo-Freeman said, noting that often military spending sprees in these countries are conduits for corruption.

Then there is the supply side of the equation. “One of the things that jumped out at me is how much U.S. arms sales to the Middle East have played into this increase,” said Seth Binder, an associate with the Center for International Policy’s Security Assistance Monitor (SAM) program, which tracks arms sales and military aid.

While the U.S. may have scaled back its buying, it continues to play a leading role in arms proliferation across the globe, accounting for 31 percent of exports from 2010 to 2014, SIPRI found in a separate report last month. The U.S. sold $20.5 billion in arms to countries in the Middle East in 2013, nearly triple the $7 billion it sold in 2007, according to the SAM program’s data. Regionally, Saudi Arabia, Israel, the United Arab Emirates and Turkey were the biggest buyers for U.S. military hardware.

As for the U.S., SIPRI projects the spending decline will continue in 2015 though it will likely begin to bottom out. The combined constraining effects of budget cuts and the winding down of costly wars in Iraq and Afghanistan have more or less played out, Perlo-Freeman said. That will leave U.S. spending slightly lower than its 2010 high, though “close to that historic level. And of course, a new war in Iraq is ramping up again.”

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