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Thursday, June 27, 2013

Military Spending

You've heard it so often, its just gotta be true:  "The US is the world’s top military spender."

This assertion - I suppose, like any general, sweeping assertion - is problematic.  What do we mean by the "TOP" spender?  The most overall?  The most per person?  "Top" is just not a particularly specific qualifier.

Total Spending

Ok, so the total amount, spent per year is a pretty straightforward concept.  As of late, its been in the high $600 billions per year.
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*NOTE - "OCO" = "Overseas Contingency Operations," aka the explicit costs of the Iraq/Pakistan/Afghanistan wars. 

Finding the right context through which to view this number, however, is the tricky part.   How does "high $600 billions" compare to spending by other countries?

"More than the next X nations combined"

I see this claim everywhere online (for example).  The X varying depending on year and definition of "military," but its usually in the 7 - 12 range.

No one else in the world spends anything close to what we spend on our military, in nominal, bottom line dollars.

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But is this at all a surprise?

The US is, after all, the world's largest single national economy.  We're the third most populated nation on the planet (after only China and India), and by far the most populated "first world" nation.

The point being: we spend more than everyone else, on just about everything.  Fuel, bubble gum, toilet paper, oil changes, peace rallies...considering the amount of money lying around here, it would newsworthy if there was a nation outspending the US (in bottom line cash amounts) on anything.

A disproportionately ginormous share of the world's disposable wealth is in the US, so yeah, sure, of course we're going to spend more on anything compared to the rest of the planet.

So the "US spends more on its military than the next 10 nations combined" shouldn't be a shocker of a statement to anyone.  We could easily afford to spend more than the rest of the world on our military, without putting a strain on the national budget, given the size of our population and economy.

So this "total military spending" figure is not a hugely informative number.  Let's see if there's a better way to frame that spending figure...

Per Capita Military Spending

That is, total military spending (like we saw in the last section), divided by the population.  I see this figure used a lot.  This can be thought of the cost of defending each citizen within a nation.

Using the most current population estimates from the CIA (mostly 2013), and the most current military spending figures complied by SIPRI (mostly 2011), I calculated a rough "top 15 highest per citizen spending" nations.

I know, not the same years, but hey, its close...sometimes data is a muddy business.  Anyway, here's what I got:

Rank Country Military Spending per citizen
1 United Arab Emirates $3,500
2 United States $2,250
3 Israel $1,970
4 Saudi Arabia $1,800
5 Singapore $1,660
6 Norway $1,530
7 Oman $1,360
8 Australia $1,130
9 Qatar $980
10 France $950
11 United Kingdom $940
12 Somalia $860
13 Denmark $810
14 Finland $710
15 Luxembourg $700

*NOTE - for SIPRI's definition of "military spending," read this.

We can interpret this as "it costs $3,500 to defend an Emirati from foreign invasion each year, $2,250 to defend an American," etc.

While this is a popular way of reporting military spending, I don't like it so much.  With a few exceptions (ie, Israel, Somalia, etc.), its kinda just a list of nations with high per capita income.  Countries with more money spend more - on their military, on anything else.  Duh. 

AND - this figure doesn't speak much to intentions or aspirations.  If they had the scratch, how do we know Haiti, Ireland, or Lesotho wouldn't be number one?

Plus, it distorts the military expenditures of small populations.  Everyone needs certain base materials to field an army, and if your national population is small, those essential, banal items will pump up your "per citizen expense" value - and make your nation look a little more warhawk then it might actually be.

For example, Norway only has 5 million people in it.  If their Navy buys one new $5 million dollar ship, then their "per person military expense" will jump $1.  If the US bought the same vessel, its per person expenditure would jump 1.5 cents ($0.015) 

You gotta have at least one ship to have a Navy, so this cost is going to be unavoidable.  However, without a large population to spread the cost over, those unavoidables will crank up that "per capita" numbers.

If say, Luxembourg, with its population of half a million, just bought all their soldiers new uniforms, they could feasibly climb a space or two on the list.

So the "per person expense" is a pretty crude (and marginally useless) figure.  What do we have alternatives?

Military Spending as Percent of GDP

A figure preferred by the CIA, its a little closer to the mark.

GDP is the monetary value of all market goods and services produced inside a country in one year.  Its how much value, in dollars, a nation creates in a given period.  (For more clarification watch this video).

According to the CIA, this one shakes out as follows:

Click to enlarge

*NOTE - the US is number 19 on this list, at 4.6% of GDP.

We can interpret this as "given the size of a country economically, how much do they spend on their military."

BUT, again, once you start chewing on this one, you'll find some parts tough to swallow.  A country's government can only gets spend a percentage of their country's GDP - the percentage they collect through taxes.  Total GDP does not equal the total amount of cash available to a govt to spend. 

So if GDP and the total money available to a national government for spending are two completely separate things, why express one as percent of another?  The only way that a government's total available cash would be equal to their nation's GDP is if all tax rates were 100%.  Good luck with that!

If I asked you what your monthly food budget was, would you answer: "0.002% of the total amount of money the company I work for paid out in wages this month"?  I mean, you might be technically right, but how is that percentage figure useful?

What you'd be more likely to say something like: "food costs are 20% of my monthly expenses", right?  Can we look at military spending in an equivalent way?

Military spending, as percent of all govt expenditures

This is the figure I think best puts the military spending number into perspective.  Unfortunately, I rarely see it used, if ever.

Think of it as "out of all the money a government spends, how much is spent on defense."  Nice and simple - and, I think, pretty sensible!

I can't really find a comprehensive world ranking by this figure (which I thought was weird, seeing how it would be such a useful one to have), so I worked it out for myself - and you!!

SO - using that 2011 SIPRI number for military spending, and the CIA's estimate of all world government's total spending in 2012, I came up with just that list.  "Military spending, as a percentage of that govt's total spending."  

My worldwide ranking appears below.  Check it out, and if you have any comments about it, please leave them in the comments section at the end of this post!!

Let me just leave you with one thought: when it comes to data and statistics, always be hyper critical of the subtleties of the data, and their context.  Little things can make big differences!!  The US falls to the 9th highest spender in the world when we measure military spending this way.  Still pretty high, but no longer the world leader...

Rank Country Military spending, as % of total spending by that country's government
1 Eritrea 36%
2 Sudan 24%
3 Singapore 23%
4 Afghanistan 22%
5 Israel 21%
6 Saudi Arabia 21%
7 Korea, North 20%
8 Syria 20%
9 United States 19%
10 Russia 18%
11 India 18%
12 Uganda 18%
13 Central African Republic 17%
14 United Arab Emirates 17%
15 Jordan 16%
16 Armenia 16%
17 Taiwan 15%
18 Pakistan 15%
19 Sri Lanka 14%
20 Oman 14%
21 Lebanon 13%
22 Korea, South 13%
23 Ecuador 12%
24 Azerbaijan 12%
25 Kyrgyzstan 10%
26 Morocco 10%
27 Guinea-Bissau 10%
28 Algeria 10%
29 Burundi 10%
30 Bahrain 10%
31 Georgia 10%
32 Chile 10%
33 Colombia 10%
34 Yemen 10%
35 Guinea 10%
36 Poland 9%
37 Iran 9%
38 Turkey 9%
39 Mauritania 9%
40 Djibouti 9%
41 Angola 9%
42 Swaziland 8%
43 Namibia 8%
44 Bangladesh 8%
45 Mali 8%
46 Nigeria 8%
47 Kenya 7%
48 China 7%
49 Chad 7%
50 Thailand 7%
51 Cambodia 7%
52 Botswana 7%
53 Togo 7%
54 Ukraine 7%
55 Malaysia 6%
56 Cameroon 6%
57 Iraq 6%
58 Uruguay 6%
59 Paraguay 6%
60 Cote d'Ivoire 6%
61 Zambia 6%
62 Senegal 6%
63 Nepal 6%
64 Montenegro 6%
65 Albania 5%
66 Egypt 5%
67 Greece 5%
68 Serbia 5%
69 Croatia 5%
70 Burkina Faso 5%
71 United Kingdom 5%
72 Honduras 5%
73 Ethiopia 5%
74 Libya 5%
75 Equatorial Guinea 5%
76 Australia 5%
77 Fiji 5%
78 El Salvador 5%
79 Bulgaria 5%
80 Portugal 5%
81 Benin 4%
82 Estonia 4%
83 Lithuania 4%
84 Gabon 4%
85 Brazil 4%
86 Tunisia 4%
87 France 4%
88 Tajikistan 4%
89 Rwanda 4%
90 Romania 4%
91 South Africa 4%
92 Qatar 4%
93 Guyana 4%
94 Madagascar 4%
95 Kazakhstan 4%
96 Italy 4%
97 Tanzania 4%
98 Malawi 4%
99 Peru 4%
100 Norway 3%
101 Belize 3%
102 Lesotho 3%
103 Sierra Leone 3%
104 Belarus 3%
105 Trinidad and Tobago 3%
106 Germany 3%
107 Indonesia 3%
108 Canada 3%
109 Argentina 3%
110 Niger 3%
111 Slovakia 3%
112 Slovenia 3%
113 Netherlands 3%
114 Latvia 3%
115 Bolivia 3%
116 Czech Republic 3%
117 Panama 3%
118 Finland 3%
119 Jamaica 3%
120 Guatemala 3%
121 Dominican Republic 3%
122 Bosnia and Herzegovina 2%
123 Spain 2%
124 Denmark 2%
125 New Zealand 2%
126 Switzerland 2%
127 Hungary 2%
128 Seychelles 2%
129 Liberia 2%
130 Belgium 2%
131 Japan 2%
132 Sweden 2%
133 Mexico 2%
134 Nicaragua 2%
135 Mozambique 2%
136 Austria 2%
137 Timor-Leste 2%
138 Mongolia 2%
139 Luxembourg 2%
140 Papua New Guinea 1%
141 Malta 1%
142 Ireland 1%
143 Venezuela 1%
144 Cape Verde 1%
145 Turkmenistan 1%
146 Ghana 1%
147 Laos 1%
148 Moldova 1%
149 Uzbekistan 1%
150 Mauritius 1%
151 Haiti 1%
152 Iceland 0.3%
153 Cuba 0.2%

1 comment:

  1. I think it's pretty interesting that the top 30 consists of nations with belligerent neighbors and histories of recent border conflicts, plus the US and Poland. I even kind of get Poland, but I think the US's place on that list underscores its dramatic over-militarization far better than any of the other lists.