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GLOBAL DEFENCE SPENDING

Global defence spending rises in 2020, despite the economic impact of the coronavirus pandemic, show Military Balance 2021 figures

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Global defence spending continues to rise and reached a new highpoint in 2020 despite the coronavirus pandemic, according to new figures released by The International Institute for Strategic Studies (IISS).

Drawing on figures from the Military Balance Plus database, data featured in The Military Balance 2021 shows that global defence spending increased in 2020 to reach US$1.83 trillion, growing by 3.9% in real terms over 2019 figures. This came despite the coronavirus pandemic and the subsequent contraction in global economic output. The US still spent most on defence in 2020, accounting for 40.3% of total global defence spending, but the upward trend continues in Asia, even if growth rates decelerated there. Spending growth slowed to 4.3% from 4.6% in 2019 as several countries adjusted their defence budgets to redirect funds to crisis relief or economic stimulus measures. However, others simply reduced or deferred planned spending growth rather than implementing cuts.

Asia spent 17.8% of total global defence spending in 2010, and by 2020 this had risen to 25%. The increase in the region’s spending is driven by China. While real growth in China’s defence budget slowed to 5.2% in 2020, down from 5.9% in 2019, the nominal increase in China’s 2020 defence budget, amounting to US$12 billion, was still greater than the combined defence budget increases in all other Asian states. Overall, increases in the US and Chinese defence budgets accounted for almost two-thirds of the gross real-terms increase in global defence spending in 2020.

CHINA'S POWER-PROJECTION CAPABILITY

China’s power-projection capability grows, with increased numbers of combat enablers, Military Balance 2021 figures show

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Marking the launch of The Military Balance 2021 today (25 February), The International Institute for Strategic Studies (IISS) released figures, held in its Military Balance Plus database, illustrating the growth in China’s power-projection capabilities.

Beijing seems intent on achieving primacy in its littoral areas, and while China’s maritime paramilitary forces have taken the lead – and are using facilities on Chinese-occupied features in the Spratly Islands as forward-operating bases in the South China Sea – the People’s Liberation Army Navy (PLAN) has maintained an ‘over-the-horizon’ presence. China’s corvette numbers have more than doubled in the last five years, reaching 55 in 2020. Meanwhile, the anti-submarine warfare capability of China’s navy is increasing. Other naval shipbuilding has continued at pace, and the number of large amphibious vessels has doubled, to six, since 2015. This will increase as new vessels, including amphibious assault ships, are commissioned.

China is also developing the military capabilities that will be needed to support its armed forces’ operations at reach. For instance, China’s fleet support ships now number 12, up from seven in 2015, while increased numbers of Y-20 heavy transports mean that the PLA Air Force has effectively doubled its heavy air transport fleet in the last four years. But the publication strikes a cautionary note, indicating that as China’s armed forces modernise and its power-projection capabilities grow, other aspects of Beijing’s plans – such as its drive to improve military training – will be at least as important in delivering successful and durable military capability.

EUROPEAN DEFENCE SPENDING

European NATO members creep closer to spending 2% of GDP on defence, as military spending continues to rise in Europe, Military Balance 2021 figures show

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Defence spending among Europe’s NATO members has increased by nearly 20% in real terms since 2014, according to figures released today (25 February) by The International Institute for Strategic Studies (IISS).

Total European defence spending grew by 2% in real terms in 2020. This was more modest than the 4.1% uplift seen in 2019, but the commitment by key players to increase their defence budgets in 2021 and beyond signals an intention to avoid the cuts that followed the 2007−08 financial crisis. If these spending plans continue on their current trajectory, in 2021 Europe could be the region with the fastest growth in global defence spending.

Europe’s NATO members have continued to increase their defence expenditure as a proportion of GDP, but they have some way to go to reach the Alliance’s recommendation to spend 2% of GDP on defence by 2024. Although the pandemic caused a 7% average economic contraction among NATO members, The Military Balance 2021 concludes that in 2020 only nine of the Alliance’s 28 European members met the 2% target.

That said, the spending trajectory is upwards. From an average of just 1.25% of GDP in 2014, spending grew to 1.52% in 2019 and to 1.64% of GDP in 2020. Average spending as a proportion of GDP has increased every year since 2014 as threat perceptions sharpened in the years after Russia’s seizure of Crimea. Indeed, the 2020 average is the highest since 2009.

Notes to editors

1. The Military Balance is the IISS’ annual assessment of the military capabilities and defence economics of 171 countries worldwide. It is an essential resource for those involved in security policymaking, analysis and research.

2. The IISS is a world-leading authority on global security, political risk and military conflict. Founded in 1958, the IISS promotes the development of sound policies that further global peace and security and maintain civilised international relations. The IISS is renowned for its extensive global research and publications.

3. Other series of publications include: Military Balance Plus, The Military Balance complementary database; Armed Conflict Survey, that identifies trends in the world’s active armed conflicts; Strategic Survey: The Annual Assessment of Geopolitics; the Strategic Dossier Iran’s Networks of Influence in the Middle East; and other seminal work on nuclear deterrence and arms control, as well as emerging geopolitical and geo-economic trends. The IISS is also renowned for its security summits, including the IISS Shangri-La Dialogue (The Asian Regional Security Summit) and IISS Manama Dialogue (The Middle East Regional Security Summit). The IISS has offices in London, Berlin, Washington DC, Bahrain and Singapore.