| UBS to name 5,000 accounts under US deal: Report.marks India's Independence Day.Indian markets growing beyond Ambanis: Newsweek India faces drought but economists upbeat.Race begins for $12 bn India warjet deal. India releases $122 mn for Gorshkov modification
Troubled Galaxy Destroyed Dreams, Chapter 334 Palash Biswas
Discuss this article in our | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Race begins for $12 bn India warjet deal !India releases $122 mn for Gorshkov modification! | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
India commits to major defence budget increase
By Fenella McGerty and Rahul Bedi
19 February 2009
Indian defence spending will rise by more than a third to INR1,417 billion (USD32.7 billion) in Fiscal Year 2009, according to the interim budget presented by acting finance minister Pranab Mukherjee on 16 February.
This figure represents a 34.2 per cent increase from the proposed 2008 budget of INR1,057 billion and a 23.6 per cent increase from the revised 2008 defence spending estimate of INR1,146 billion.
The allocation is nearly 15 per cent of the government's total interim budget of INR9,532.31 billion for the fiscal year beginning on 1 April.
The interim budget is to finance expenditure ahead of the general election scheduled for May 2009.
Of the INR1,417 billion defence budget, planned expenditure has risen 18 per cent for 2009/10 from INR736 billion to INR868.79 billion. This includes INR548.24 billion for capital expenditure as against INR410 billion in the revised estimates for 2008-09.
However, defence officials said the 34 per cent rise would be "neutralised" by delays in decision-making by the Ministry of Defence and military officials in confirming equipment acquisitions and modernisation programmes.
Indian naval head warns of Chinese military challenge
India's naval chief has said that his country cannot hope to rival China when it comes to military strength, while warning that China will become a "primary challenge" for India in the future.
Admiral Sureesh Mehta, who is also chairman of India's Chiefs of Staff Committee, said at a 10 August function organised by the National Maritime Foundation in New Delhi: "In military terms, both conventional and non-conventional, we neither have the capability nor the intention to match China, force for force."
Adm Mehta's comments came shortly after the 13th round of negotiations aimed at settling the disputed India-China border concluded in New Delhi on 8 August, with little progress having been made. The navy chief said there was a serious "trust deficit" between Beijing and New Delhi on the issue.
"Coping with China will be one of our primary challenges in the years ahead," Adm Mehta declared, cautioning that Beijing's territorial claims would become more assertive as its military capabilities continue to develop.
He added that while India could not catch up with China militarily, it should aim to level the playing field as much as possible.
 Tax Code proposes to plug loopholes in tax evasion Currently, the penalty is up to thrice the value of the tax liability. The code proposes to impose penalty on those who willfully under-report tax base.  Draft code may make individuals pay more tax If code proposals are approved, India will join the club of countries which have peak personal tax rates higher than corporate tax rate. Fact sheet on proposed tax code  New code to give I-T dept more say in foreign deals Foreign firms buying Indian cos argue that Indian tax authorities have no standing over deals outside India between two overseas parties. Fact sheet on proposed tax code  Direct taxes code: An idea whose time has come The new direct taxes code is a great idea. Time has come to embrace, adapt and run with the code.  Govt looks to implement new I-T law from 2011 The new tax code makes radical changes in all areas of taxation, aiming to improve its efficiency and expand the tax base.  Direct taxes code, a paradigm shift The new code will mean lots of changes for businesses and introduction of exempt exempt taxed (EET) scheme for individuals.  Direct Tax Code: Save at work pay at retirement The direct tax code is a bit of a mixed bag for individuals, particularly the salaried class. Ten smart ways to lower your tax bill | Mistakes while filing I-T returns  New tax code: Easy on your pocket Check out how new tax code would impact individuals.  Tax liability and you An individual with taxable gross income of Rs 10 lakh will pay tax of Rs 84,000 as opposed to about Rs 2.11 lakh he pays this fiscal year.  Fact sheet on the proposed new direct tax code The following are some salient features pertaining to the new Direct Tax Code proposed by govt, for which a draft and a discussion paper were released by FM  Measure and impact of proposed tax slabs Check out how tax measures would impact personal incomes, companies and investors.  Sectors enjoying tax holidays to take a hit The code attempts at a somewhat new way of approaching corporate taxation, the biggest impact being on sectors which till now were enjoying tax holidays.  Good intentions have to be backed by implementation The most heartwarming feature of the code is the personal tax rates. The code is a great leap for our generation but as always, all good intentions have to be backed by even better implementation.  Cherry-picking will distort tax structure The plethora of exemptions in new Income tax code, such as those for developers of special economic zones or hill states, distort the tax structure and are a drag on the exchequer.  New Direct Tax Code mostly profitable for India Inc The Direct Tax Code proposes a substantial reduction in the rates of tax on corporate income, near-removal of the difference in the tax treatment of domestic and foreign companies and a shift in the base of MAT.
| ||
"When two elephants fight, the grass suffers. So goes the African saying, and a few years ago it would have been true of the Indian market," Morgan Stanley Investment Management's Emerging Markets Head Ruchir Sharma has written in an article.
"But the bitter and very public corporate battle between the billionaire Ambani brothers, who control the Reliance Group of companies, has produced surprisingly little collateral damage so far," wrote Sharma.
"For a long time, the popular notion was that as the Reliance Group went, so went the Indian stock market. Now investors can ignore the family feud because the market is so much bigger.
"At the start of this decade, Reliance was one of five Indian companies with a market value of more than $5 billion. Currently there are 40 such companies, the total value of the market is more than $1 trillion, and the Reliance Group accounts for less than 10 per cent of the total," the report added.
"The reduced focus on the Reliance Group is part of a broader trend, in which the obsession with the top of the pyramid is shifting to a growing interest in the bulging middle. In 2006 and 2007 -- the heyday of the growth boom -- all eyes were on the wealth of India's richest few," Sharma noted.
According to the article, the media started keeping tap on the number of Indians making it to the Forbes list of billionaires, as the stock market surged and at the end of 2007, there were 10 Indians in the top-100 --- trailing only the Americans and Russians in number.
The ongoing feud between the two brothers, over supply of gas from elder Mukesh-led RIL's Krishna-Godavari fields to younger Anil-led group firm RNRL, has been under focus for many months now and the battle has now reached the Supreme Court of India.
There were four Indians among the world's 10 richest in 2008, including the two Ambani brothers, before it fell down to two this year after a sharp meltdown in the stock market. There were a total of 53 Indians among the world's billionaires in 2008, but it fell to 24 in 2009.
Mukesh Ambani was ranked as the world's seventh richest in the Forbes list, published in March this year, with a net worth of 19.5 billion dollar, while Anil was ranked 34th with 10.1 billion dollar.
| Khan not singled out because of his name: US | |||
  Shah Rukh Khan |
The allegations "happen to be incorrect," the spokesman of the US Customs and Border Protection here Elmer Camacho said.
The spokesman said Khan was inspected because his baggage had not arrived.
"His documents and papers were checked, which were found to be in correct order," Camacho said.
After a "normal" check at the airport, Khan was taken to a different room where he was waiting for his turn since many other people were already there. The entire process ended in one hour, the spokesman said.
The entire process, he said, was handled in a "professional manner" and there was no evidence of Khan being pointed out because of his name or Asian identity.
To a question on Khan's contention that he was asked by immigration officials about his work in the US, the spokesman said "it's our policy not to discuss all specific (details) of any traveller". However, when any travller enters the US, he or she is subjected to inspection, he added.
Driving straight to the venue of a function at the luxury Trump Taj Mahal hotel in Atlantic City in tattered jeans, a white T-shirt, a brownish coat and a muffler since his baggage was yet to arrive, Khan told the audience that "I was treated shabbily just because I happened to have Khan as my last name."
Profusely apologising to his fans for arriving two hours late at the casino city of New Jersey for yesterday's function, 'King' Khan stunned the large number of Indian-Americans when he told them that he does not feel like stepping on the American soil any more, but it is the love and affection of millions of his fans in the US which would bring him to this country again and again.
Sharing his "ordeal" which he underwent as he landed at the Newark International Liberty Airport on a British Airways flight, with his fans, the 43-year-old actor said he was grilled by immigration officials.
"It was very unprofessional of the airport security staff of not allowing me to use my cell phone to contact my local organisers," he told the audience, who were literally taken aback by what they heard from their superstar.
A visibly shattered Khan said that "I have travelled throughout the world for my shooting and also as brand ambassador for all major products but I have never been treated like this before."
"At times I do not feel like stepping on American soil any more but I have millions of fans here who would want to see me so I will keep coming," 'King' Khan told his fans.
Later in Chicago, where he had gone to take part in the South Asian Carnival on the occasion of India's Independence Day, Khan told PTI that "I think it is a procedure that needs to be followed. But it is an unfortunate procedure."
Asked whether he would seek an apology for the incident, the actor replied in the negative.
Soon after the incident which sparked angry reactions back home, the actor had yesterday said he was detained and questioned at Newark airport by US immigration officials after his name matched with some of those on a common checklist. He was let off at the intervention of Indian Consulate officials.
Khan had termed the incident as "uncalled for", saying that "I did feel bad. I felt angry. I am glad my family wasn't there. God knows what they would have done to them."
"I was really hassled at the American Airport because of my name being Khan," the actor, who figured in the American Newsweek magazine's list of 50 most powerful people, had said.
Another Swiss weekly, Sonntag, said around 4,500 names would be handed over.
The landmark deal, ending a dispute in which the U.S. tax authorities had sued UBS to disclose 52,000 U.S. clients suspected of tax evasion, dispels a big cloud hanging over the world's second biggest wealth manager.
It also formally leaves Switzerland's cherished banking secrecy intact, although many Swiss private bankers say it has been badly damaged.
NZZ am Sonntag, citing its own researches and reports in the U.S. press, said the deal would be based on the existing U.S.-Swiss double taxation agreement of 1996, and therefore not require any changes to Swiss law.
As a result, the Swiss cabinet will be able to implement the deal directly, without going through parliament, it said.
UBS will also escape having to pay a fine, it said.
The deal will probably be signed this week, a source familiar with the situation told Reuters on Friday.
HIDDEN LIMITS
NZZ am Sonntag said the names of those to be disclosed would be those suspected of committing tax fraud under the terms of the double taxation agreement, which obliges Switzerland to provide help if Washington seeks it in a criminal investigation.
Accounts below a certain size would not be reported, but this limit would be kept confidential so that account-holders could never be sure whether they were vulnerable, it said.
However, account-holders threatened with disclosure would be able to challenge the move in the Swiss courts, it said.
NZZ am Sonntag said the U.S. government had backed off from the original demands of the Internal Revenue Service (IRS) because the U.S. Treasury Secretary did not want to provoke another financial crisis by pushing UBS over the edge.
Under a previous agreement, UBS settled criminal charges that it had facilitated tax fraud by paying $780 million and handing over data on about 250 U.S. clients.
U.S. prosecutors said on Friday that a California client of UBS would plead guilty to criminal charges arising from an investigation into tax evasion at UBS, the fourth prosecution arising from that deal.
Criminal charges arising from that case, and the disclosure of further names from the latest deal are keeping pressure on suspected offenders to report themselves voluntarily under an amnesty programme running to Sept. 23.
Sonntag said that the total amount of fines likely to be paid by account-holders disclosed in last week's deal would be around 4 billion Swiss francs ($3.74 billion).
But it said a British lawyer was already trying to drum up support for a class action by UBS customers who feel they have been betrayed by the bank.
It quoted Konrad Hummler, partner in Swiss private bank Wegelin, as saying that Swiss banks would suffer from any further disclosure of customer data by UBS, even if in purely formal terms that did not breach Swiss law or banking secrecy.
"Everyone is talking about success -- the IRS, the Swiss government, UBS. But that can't possibly be the case," he said.
"Although we still don't know any of the details, we can guess some things: the customer has been made a fool of -- he was promised something which retroactively no longer applies," he said.
Last week news posted like this:
The official, who spoke on condition of anonymity, said the precise date for the start of trials will depend on weather conditions. India is on a spending spree to update its largely Soviet-era weapons system and is looking at buying 126 fighter jets.
After Boeing, Lockheed Martin is next in line to showcase its F-16 to the technology-hungry Indian airforce, the official said. The European Aeronautic Defence and Space Company (EADS) will offer its Typhoon Eurofighter, while Russia is seeking to sell the MiG-35 and MiG-29.
French Dassault, which constructs the Mirage, has put forward its Rafale aircraft as a contender. In April, India said it would not buy the Rafale because it was too expensive. But within weeks New Delhi without elaborating said the French firm had re-joined the race.
The line-up is completed by Gripen, part of Sweden's Saab. Industry sources have said Lockheed Martin and Boeing have emerged as front-runners.
Meanwhile, India's Consul General in New York presided over NASDAQ's closing bell ceremony as the stock exchange's electronic board displayed the
In recognition of India's emergence as a global economic power, the world's largest stock exchange invited India's Consul General Prabhu Dayal to ring the closing bell at the NASDAQ headquarters in mid-town Manhattan.
Terming it as a "very important occasion," Dayal noted that his presence at NASDAQ on the eve of Independence Day emphasised the strong partnership between India and the US.
The Consul General rang the closing bell yesterday at NASDAQ, which lists seven Indian companies with combined market capitalisation of USD 35 billion.
Pointing at a strong Indo-US partnership, he drew attention to the recent successful visit of the Secretary of State Hillary Clinton and the upcoming State visit of Prime Minister Manmohan Singh to Washington.
He said as the largest source of foreign direct and portfolio investments, US was an indispensable partner of India, whose huge markets also offer enormous opportunities for US investors.
Outside the exchange, in the heart of Times Square, an electronic board displayed the Indian flag with the caption "NASDAQ welcomes Ambassador Prabhu Dayal, Consul General of India in New York."
The payment was sanctioned earlier this month by the government following demands by Rosoboronexport, the sole Russian agency designated for importing or exporting defence equipment, according to India Strategic defence magazine.
India had paid around $600 million initially after an agreement between the two countries in 2004, according to which the old aircraft carrier was gifted as free but India was to pay $974 million to modify and upgrade it in accordance with Indian Navy's specifications.
In 2007, however, the Russians said they had made a mistake in their calculations to repair and modify Gorshkov, and demanded another $1.2 billion. Recently, they have added still another $700 million saying that modifications, and then sea trials, would be more expensive than as considered by them earlier.
The total demand by the Russians now touches $2.9 billion, instead of $974 million, or, approximately one billion as originally contracted.
The delivery of the aircraft carrier has also been pushed from 2008 to 2012-13, although repair work on it is continuing without break at the Sevmash shipyard in northern Russia on its Arctic coast.
The Russian government had extended $250 million to the shipyard in 2008, and now the installment of $122 million being paid by India is also to ensure that there is no break in the repair work, India Strategic quoted sources as saying.
Indian naval officials have been stationed at Sevmash for the past several years to monitor the day-to-day activity and to ensure that the repair and modifications are in line with the Naval Staff Qualitative Requirements (NSQRs), the dispute over the additional monetary demands notwithstanding.
India has naturally been reluctant to meet the post-contract Russian demands, and even the Comptroller General of India (CGI) has described the deal as a mess. But the Navy needs Gorshkov as early as possible as its only existing aircraft carrier, Viraat, is on life extension and undergoing a refit to serve for another few years.
It takes nearly 8 to 10 years to acquire an aircraft carrier. Procedures within the Indian bureaucratic system require two to three years, and then a company which is ordered to build it, should take another 5 to 8 years.
Although the Indian Navy is already building one of its two aircraft carriers in design consultancy with Italy's Fincantieri, it has no choice but to go in for Gorshkov in line with its sanctioned three-carrier planning. Ideally though, a country the size of India with 7,500 km of coastline should have at least five aircraft carriers.
A Russian defence delegation was in New Delhi in July but it refused to negotiate lower than its demand for $2.9 billion.
Discussions though will continue.
The government's Cabinet Committee on Security (CCS) is reported to have asked the Ministry of Defence to continue the negotiations but has not acceded to the two revised Russian demands.
It may be noted that the Gorshkov deal also involves a related $740 million contract for 16 Mig 29K aircraft. That deal is going smoothly and the first four of these aircraft are likely to arrive at INS Hansa, the Indian Navy training facility in Goa, by year-end.
Ten pilots, initially trained by the US Navy for carrier landing at its Naval Air Station, Pensacola training facility, are now in Russia training on the Mig 29Ks.
Four of these Mig 29Ks are twin-seaters for training and the remaining 12 for routine operational flying.
The Navy will continue to operate the Mig 29Ks from its ground stations as all 16 of them are likely to be in India before the arrival of Gorshkov.
Finance Minister Pranab Mukherjee, while presenting the budget in the Lok Sabha, had good news for soldiers and Junior Commissioned Officers (JCOs), saying their pensions would be enhanced.
However, the officer cadre, which had led the One-Rank-One-Pay (OROP) demand, has been ignored.
"We are going through tough times," Mukherjee had said at the time, adding: "The Mumbai terror attacks have given an entirely new dimension to cross-border terrorism. A threshold has been crossed. Our security environment has deteriorated considerably."
Of the allocation for the fiscal that began April 1, planned expenditure for defence has been pegged at Rs.86, 879 crore against Rs.73, 600 crore for the financial year ended March 31.
This includes Rs.54, 824 crore for capital expenditure as against Rs.41, 000 crore in the revised estimates for 2008-09.
In real terms, however, the budgetary hike works out to little over 23 percent as the revised expenditure for 2008-09 has been placed at Rs.114,600 crore against the allocation of Rs.91,681 crore.
As in past years, the 1.1 million strong Indian Army has received the major share of 41 percent or Rs.58, 648 crore, with the Indian Air Force Rs.14, 318 crore the Indian Navy being allocated Rs.8, 322 crore.
The army's allocation is alone larger than the Rs.54, 824 crore that has been set aside for capital expenditure for all three services of the Indian Defence put together.
However, in the case of capital expenditure, the bulk of this - almost Rs.20, 000 crore has been set aside for the Air Force, against Rs.17,767.95 crore for the Army and Rs.11,873.73 crore for the Navy. This is understandable as the Indian Air Force is currently going through a massive modernization programme.
What remains to be seen is how much of this will actually be spent by the time the fiscal ends March 31, 2010, as the armed forces returned Rs.7,000 crore leftover of the Rs.48,007 allocated for capital expenditure for 2008-09.
For the Army, the budgetary hike - minus the allocation for capital expenditure - works out to a little less than Rs.10,000 crore over the revised estimates of Rs.48,195 crore. The original allocation for the army in the 2008-09 proposals was Rs.36, 270 crore.
For the Navy, the hike is a mere Rs.288 crore over the revised estimates of Rs.8, 034 crore for the fiscal just ending but a rise of Rs.901 crore over the original allocation.
For the Air Force, the hike works out to Rs.1, 109 crore over the revised estimates Rs.12, 199 crore for the closing fiscal against an original allocation of Rs.10, 855 crore.
Of its allocation, the army will spend a staggering Rs.36, 081 crore or 64 percent on pay and allowances. The navy has set aside Rs.2, 850 crore or 34 percent on this count and the Air Force Rs.4, 880 crore or 34 percent.
Taken together, the three services will see Rs.43, 811 crore or nearly 54 percent going toward pay and allowances.
The budget has also allocated Rs.21,790 crore for pensions, Rs.4,757 for the Defence Research and Development Organisation (DRDO) and Rs.832 crore for defence ordnance factories.
Curiously enough, while the Finance Minister said that the enhanced pensions would annually cost the government Rs.2, 100 crore, there was no mention of this in the budget documents.
"The decision will benefit more than 12 lakh jawans (soldiers) and JCOs. Certain benefits being extended to war wounded and other disabled pensioners are also being liberalised," Mukherjee said.
"On the basis of these recommendations, the government has decided to substantially improve the pension of pre-1.1.2006 defence pensioners below officer rank (PBOR) and bring pre-10.10.1997 pensioners on par with post 10.10.1997 pensioners. Both these decisions will be implemented from 1st July 2009, resulting in enhanced pension for more than 12 lakh jawans and JCOs.
These measures will cost the exchequer more than Rs.2, 100 crore annually. Certain pension benefits being extended to war wounded and other disabled pensioners are also being liberalised," Mukherjee added.
The Pakistan Defence & Security Report
- Independent 5-year Defence and Security industry forecast for Pakistan .
- Original Defence and security market research and the defence & security sector trend analysis for the Pakistani Defence and Security industry.
- Competitive intelligence, Pakistani defence & security company rankings and SWOT analyses on international and domestic defence & security companies in Pakistan .
The Pakistan Defence & Security Report has been researched at source in 2007, and features latest-available data covering all headline indicators; 5-year industry forecasts for Pakistan through end- ; company rankings and competitive landscapes covering national and multinational arms and components manufacturers, electronic and software producers, and companies providing defence solutions, as well as analysis of latest industry developments, trends and regulatory changes in Pakistan .
Business Monitor International's Pakistani Defence & Security Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the Pakistani defence & security industry.
Key Benefits of Report
- Benchmark BMI's Independent 5-Year Defence & Security Industry Forecast on Pakistan to test other views - a key input for successful budgetary and strategic business planning in the Pakistani defence and security market.
- Target Business Opportunities & Risks in the Pakistani Defence & Security Sector through reviews of latest industry trends, regulatory changes, and major deals, projects and investments in Pakistan
- Exploit The Latest Competitive Pakistani Defence & Security Intelligence & Company SWOTS on your peers and competitors through company rankings by sales, market share, investments and leading products and services.
Coverage
SWOT Analysis
Snapshot evaluation of the major issues affecting security, the defence sector, economy and politics, with issues subdivided into 'strengths', 'weaknesses', 'opportunities' and 'threats'.
Political Risk Assessment
Drawing on BMI's twenty-year heritage of Country Risk analysis, this comprehensively evaluates the key risks to domestic politics and
foreign relations, focusing on issues most likely to affect either domestic security or the defence sector.
Security Risk Analysis
BMI's proprietary Security Ratings provide a reliable – and country comparable – guide to conflict, terrorism and criminal risk, backed up by our analyst's latest assessment of each component. Furthermore, drawing on our Country Risk expertise, we assess the state's vulnerability to a serious – or prolonged – terrorist campaign.
Defence Industry Assessment
Overview of industry landscape and key players; public/private structure, size and value of industry sector; assessment of business operating environment and latest regulatory developments; indepth review of recent procurement trends and developments.
BMI 5-Year Forecasts
Historic data series and 5-year forecasts to end- for key industry indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecast. Defence expenditure (local currency and US$bn); defence expenditure (% of total budget); defence expenditure (% of GDP); defence expenditure per capita, US$; defence budget (local currency and US$bn); employment in arms production ('000s); employment in arms production (% of labour force); arms imports (US$mn); arms imports (% of total imports); arms exports (US$mn); arms exports (% of total exports)
BMI 5-year forecast and analysis of all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt.
Company Profiles
Company profiles, including senior executives and full contact details, business activity, products and services, foreign direct investments and projects.
http://www.businessmonitor.com/defence/pakistan.html
| TITLE: Defence Outlays in South Asia | AUTHOR: Tanvir Ahmad Khan | PUB: DAWN | DATE: March 10, 2001 |
India has raised its defence budget substantially for the seventh successive year. The estimates for 2001-2002 stand at Rs. 620,000 million, an increase of 13.8% over last year's revised estimates of Rs. 544,610 million. Last year's defence outlay had posted an unprecedented 28.3% increase. In current rupees, the latest defence budget is more than thirteen times what India spent on its defence in 1981-82. The steep rise in India's defence expenditure during this period offered a sharp contrast to the noticeable decrease in defence expenditure in most areas of the world. Between 1987 and 1997, global defence expenditure came down from $1,360 billion to $714 billion. A recent CIA study noted that non-U.S. defence spending dropped 50% since the 1980s and the global arms market decreased by the same percentage in the same period.
Despite considerable expansion and consolidation of its indigenous defence production in the 1980s and 1990s, India has continued to purchase heavily from abroad. Its plans for a rapid induction of sophisticated imports into its armed forces, including Mig-29 and Sukhoi SU-30 series of combat aircraft, T-90 tanks, missiles and missile launchers, Type 877 EKM 'Kilo' submarines, the recent orders for acquisition of more assets from Russia that would give its navy a serious blue water, ocean-going capability and the huge fund allocations to ordnance factories in successive budgets suggest a relentless drive towards force modernization within the shortest period of time.
Even if India is not contemplating an aggressive war against any of its neighbours, it is certainly relying heavily on a quick widening of the already large gap between its conventional superiority and that of other regional powers (other than China from which it is comfortably separated by the Himalayas ) to establish regional supremacy and use military power as a currency of international influence and prestige. Indeed, the CIA report (Global Trends 2015) observes that by 2015 "India will be the unrivalled regional power with a large military - including naval and nuclear capabilities - and a dynamic growing economy." The report also notes that "the widening India-Pakistan gap - destabilizing in its own right - will be accompanied by deep political, economic and social disparities within both states."
India's ambitious defence spending coincides with a remarkable period of economic growth; it enables India to keep pegging large defence outlays at a relatively low percentage of its GDP. India has clearly decided to link effectively with global markets in the shortest period of time and also stake a claim to the top militarily strong nations in the world even if it imposes continued sacrifices on the part of India's teeming millions still below the absolute poverty line. India's current pursuit of the status of a major military power is taking place against another shift in the global trends. As noted on earlier occasions in this column, the world may well be heading for a new phase of international anarchy. There is the continued weakening of the United Nations, and more ominously in the attenuation of arms control initiatives.
On March 6, the Chinese finance minister, Xiang Huaicheng, justified a 17.7% increase in his country's defence budget by citing the need "to meet the drastic changes in the military situation of the world and prepare for defence and combat given the condition of modern technology, especially high technology." The enhanced Chinese defence budget of $17 billion is still much below the current Japanese spending of $45 billion. Without any doubt, China is absorbing the lessons learnt during the Gulf war, the more recent NATO's war against Serbia and the possibility of further arms transfers to Taiwan by the United States. The Chinese are side-stepping their traditional conservatism in defence expenditure now partly because of the perception that the world may once again be entering a new period of high defence spending after years of a downward slide.
A study of Indian defence budgets in recent years indicates strong preoccupation with the cutting edge of technology to achieve a new mix between traditional weapon systems and the latest hi-tech innovations that come under the general rubric of Revolution in Military Affairs. For quite some time to come, India would not be able to mount anything resembling the Gulf War operations but already one can identify new Pakistan-specific features. Amongst them must be mentioned the quest for capability to launch formidable preemptive strikes with missiles and precision guided munitions, blitzkrieg attacks at more than one point in an otherwise large battle space and the threat of a naval blockade.
Pakistan's defence expenditure rose from Rs. 18 billion in 1981-82 to Rs 142 billion in 1999-2000. During this entire period, it has represented a higher percentage of the GDP than in the Indian case. Since the correlation between our economic growth and defence expenditure has been steadily becoming unfavourable, the option of any dramatic increase in defence outlays does not exist. The military assistance that had been revived on a substantial scale following the Soviet invasion of Afghanistan was cut off on October 1, 1990, over the nuclear question. The partial resumption of weapons sale allowed by the United States in 1995 specifically excluded the F-16 aircraft that
Pakistan had already paid for. Pakistan's efforts to diversify its sources of arms acquisition since then have only been partially successful. Very often rhetorical references to nuclear deterrence, dramatized by Pakistan's declared policy of rejecting non-first use of nuclear weapons, take the place of a comprehensive debate on national security. Meanwhile, an extended economic downturn marked by falling growth rates has combined with a noticeable degradation of social conditions to erode our comprehensive national power. The Pakistani defence planners are confronted with the challenge of working in a seriously constrained environment.
Pakistan can transcend the current plateau of defence spending only at the price of further degradation of its social conditions. Indeed, there is a school of thought in New Delhi that argues that Pakistan's decline can be accelerated by luring it into an open-ended arms race. In the crises of 1986-87 and 1990, Pakistan relied less on numbers and parity and more on innovation and tactical audacity. While it is not difficult to compile a register of Pakistan's arms acquisitions in the 1990s, information is lacking about the degree to which the defence establishment has been able to achieve synergy amongst force levels, doctrine, organization, mobility and technology. It is, therefore, difficult to assess the country's conventional deterrence.
Countless Pakistanis are genuinely concerned that at a time when the armed forces should concentrate hard on the operational, tactical and strategic imperatives of a smaller army called upon to successfully deter, and if necessary, ward off an attack by a much larger force, their professionalism is under a threat of erosion from too excessive an engagement with civilian and political life of the nation. A viable security policy for Pakistan depends on finding the right balance among several factors, particularly conventional deterrence, minimum credible nuclear deterrence, and intensified diplomacy aimed at conflict resolution and the removal of the causes of war in the region. The gestalt in which it is located would place a high emphasis on the restoration of comprehensive national power through positive action in the economic, political and cultural fields.
Given the constraints, conventional defence demands utmost ingenuity and creativity on the part of the general staff of our armed forces. Writing about the inherent unpredictability of war, Generals Paul Riper and Robert Scales of the United States wrote few years ago that " real war is an inherently uncertain enterprise in which chance, friction, and the limitations of the human mind under stress profoundly limit our ability to predict outcomes." If in the final analysis war is still a contest of human wills, even the most effective machines remain subordinate to superior strategic planning and operational implementation. Pakistan will have to constantly improvise and innovate to offset the numerical advantage of its potential enemies.
Our history of the last 50 years indicates that our land-fighting capabilities stand in need of knowledge-based upgradation. Disproportionate reliance on nuclear weapons tempts the enemy to limited conflict in which considerable, and perhaps irreparable damage may be inflicted below the nuclear threshold. It is important to know the limitations of nuclear deterrence. As a responsible nation state that has computed the cost of conflict as well as the peace dividend, Pakistan should intensify its efforts to initiate a genuine peace process in the region despite India's indefensible stone-walling of all recent initiatives from Pakistan or the international community. The core issue that has locked India and Pakistan into perennial confrontation is Kashmir; its negotiated settlement is a prerequisite to their final reconciliation. But the pre-eminence of Kashmir should not reduce the importance of engaging India on conventional and nuclear arms control and strategic restraint.
Several proposals made by Pakistan in the past decades have lost some relevance, as India would not accept the India-Pakistan equation as the main determinant of its military policy. It may thus be averse to arms limitation agreements with Pakistan. But what can still be undertaken is threat reduction through agreed steps such as low force zones, non-intimidatory deployment and a whole host of confidence-building measures - conventional and nuclear - that minimize the tensions generated by heavy armament programmes such as the one India is embarked upon at present. Future interaction between nuclear-armed India and Pakistan must factor the fears and apprehensions of either side to become a necessary element in the strategic calculations and decisions of the other sidehttp://www.1worldcommunication.org/defenceoutlays.htm
Indian stocks trading on American bourses lost over one billion dollars last week, with IT bellwether Infosys accounting for more than
For the week ended August 14, Indian entities listed on two US bourses --the New York Stock Exchange and Nasdaq-- shed $1.44 billion from their total market capitalisation. Infosys' valuation alone plunged by $961 million.
Besides Infosys, two other major losers were banking majors -- ICICI Bank and HDFC Bank. Two lenders, in total, lost $673 million.
The valuation of telecom firm Mahanagar Telephone Nigam Ltd fell by nearly $76 million, while that of drug maker Dr Reddy's declined by $55.6 million.
Besides, outsourcing firms WNS Holdings and EXLService too witnessed an erosion of $50 million in their mcap.
The pack of losers include IT firms Mahindra Satyam and Tata Consultancy Services which shed $13.40 and $4.4 million respectively. Rediff.com declined by nearly $5 million.
However, Azim Premji-led Wipro, auto behemoth Tata Motors and NRI billionaire Anil Agarwal-led Sterlite Industries were among the pack of six companies, which gained on bourses during the week.
Sterlite Industries led the gainers pack and added USD 134 million in its market capitalisation, whereas Wipro and Tata Motors added $74 and 58 million, respectively.
BPO firm Genpact's valuation increased by $19 million and another IT company Patni Computer rose by $98 million, while internet firm Sify added $11.12 million.
Last week, the US Federal Reserve had said the country's economic activity is bottoming out and financial conditions have improved.
On Friday, the US markets ended in the red with the Dow Jones Industrial Average (DJIA) settling down by 0.82 per cent to 9,321.40 and S&P 500 ended at 1,004.09, down 0.85 per cent. Besides, tech heavy Nasdaq by fell 1.19 per cent to 1,985.52 points.
Analysis of FII activities in the Indian stock markets shows that overseas investors are, so far in August, a net purchaser of domestic stocks worth Rs 264.6 crore.
FIIs made a gross purchase of shares worth Rs 22,821.2 crore, while they sold equities valued at Rs 22,556.6 crore, resulting in a net investment of just Rs 264.6 crore, according to the data available with market regulator Securities and Exchange Board of India (SEBI).
However, it seems that during the period under review, the Indian debt market became a preferred choice for overseas investors as the segment attracted a net investment of nearly 2,200 crore.
FIIs, so far this month, have made a gross purchase of Rs 4,939.90 crore in the debt market, while they pulled out a gross Rs 2,742 crore from the segment, which resulted in a net investment of Rs 2,197.90 crore, according to the SEBI data.
In recent sessions, Indian stock markets witnessed volatile trading and during the same period, the Bombay Stock Exchange's benchmark index fell 1.65 per cent.
According to the SEBI data, so far this year, FIIs' inflow in stock markets has crossed Rs 35,000 crore.
However, this year in the debt market, they have still not turned a net buyer. Till now, they are net sellers of debt instruments worth Rs 1,145 crore.
State-run NTPC and NMDC lost Rs 4,989 crore and Rs 5,154 crore, respectively, in their valuation during the week ended August 15.
The total market cap of NTPC stood at Rs 1,70,021 crore and NMDC at Rs 1,44,553 crore at the end of the week.
Meanwhile, India's largest oil producer ONGC gained the most by adding Rs 17,571 crore to its market cap, taking its total market valuation to Rs 2,60,985 crore at the end of the week.
The ONGC scrip surged 7.21 per cent last week to close at Rs 1,220.20 on the Bombay Stock Exchange on Friday.
The country's most valued firm, RIL, added Rs 6,044 crore to its valuation during the week ended August 15. RIL's market cap rose to Rs 3,20,172 crore at the end of the week.
Private sector telecom services provider Bharti Airtel jumped to fourth place from fifth after adding Rs 9,169 crore to its market cap, taking its total market valuation to Rs 1,54,892 crore.
Trading firm MMTC and IT services provider Infosys Technologies lost Rs 1,112 crore and Rs 117 crore, respectively, during the last week.
The total market cap of MMTC stood at Rs 1,43,085 crore and Infosys Technologies at Rs 1,16,896 crore at the end of the week.
The country's largest, public sector lender, SBI, added Rs 3,527 crore and power equipment maker BHEL added Rs 1,060 crore to their market valuation.
Top outsourcing firm Tata Consultancy Services added Rs 2,417 crore to its market cap, taking its total market valuation to Rs 1,01,892 crore at the end of the week.
Besides the top 10 firms, two private sector lenders ICICI Bank and HDFC Bank together added Rs 2,145 crore to their market valuations.
At the end of the week, the total market cap of ICICI Bank stood at Rs 82,849 crore and HDFC Bank at Rs 60,884 crore.
| US stocks could pull back as earnings end 16 Aug 2009, 2300 hrs IST, REUTERS | |||
Fewer than 50 Standard & Poor's 500 companies remain to report quarterly financial results, including the two major home improvement retailers, Lowe's Companies and Home Depot Inc. Clothing retailer Gap Inc and discount chain store Target are also on tap.
The recent evidence suggests consumers have not been a source of strength for improved growth.
Reports last week showed weak consumer sentiment in August and an unexpected decline in July retail sales.
"The markets are going to be looking at what kind of signal we're getting on the consumer sector. Because of high unemployment and the high savings rate, there are (worries) that consumer spending is going to be weak," said John Praveen, chief investment strategist at Prudential International Investments Advisers LLC in Newark, New Jersey.
Economic data this week will include reports on housing, manufacturing and inflation.
Major stock indexes fell last week, but before then, stronger-than-expected earnings had helped underpin a four-week stretch of gains for the market.
"I think it's too late to ride the 'we came back from the brink of disaster' rally," said Joseph Battipaglia, a market strategist at Stifel Nicolaus in Yardley, Pennsylvania. "Investors would be wise to take profits here."
Last week's light trading volumes could continue and may exaggerate market moves, analysts said.
For last week, the Dow Jones industrial average ended down 0.5 percent, the S&P ended down 0.6 percent and the Nasdaq finished off 0.7 percent. The S&P is still up about 48 percent from its 12-year lows in early March.
BERNANKE TO SPEAK, EARNINGS IMPROVE
Another factor that could influence the market's direction is a speech by Federal Reserve Chairman Ben Bernanke on Friday in Jackson Hole, Wyoming. He is expected to talk about the financial crisis at the Kansas City Fed Bank's economic symposium.
India blowing this news out of proportion, says US official
"We did not detain him for two hours [as reported], but one hour and six minutes to be precise," said Elmer Camacho, public affairs liaison for the US Customs and Border Protection Force, the federal government group that has the right to detain people at immigration and Customs checkpoints. "The airline he was travelling in had misplaced his bags and the time it took them to locate his bags is included in this one hour six minutes."
Shah Rukh has said he was allowed to make only one telephone call and he contacted his friend and Congress member of Parliament Rajiv Shukla. "He sounded very upset," said Shukla . "He said he'd been detained because of his name. They asked him unnecessary questions and wanted him to name people he knew in the US."
After Shukla called the appropriate people, it is believed that the government took up the matter with the US Ambassador in Delhi, Timothy J Roemer, before the star was allowed to go.
While Camacho refused to go into details of the questioning, citing passengers' privacy rights, he said the actor had not been ill-treated in any way. "It was a normal process, part of our security routine. He was taken to the Passport Control Secondary, which in the afternoons when several flights land together can get very very packed. From people being questioned to those who have migrated to the US, all are called into this room and people may have to await their turn till their name is called out."
SRK himself termed the detaining as "uncalled for. They said I have a common name which is causing the delay... checked my bags... I felt angry and humiliated."
India has since officially taken up the issue with the US Embassy in New Delhi, which said it was ascertaining details about the incident involving the "global icon" who was welcome to America. "He is a very welcome guest in the United States. Many Americans love his films," said Roemer.
Rajiv Shukla who also heads the Indo-US Parliamentary Forum said there have been several incidents of racial profiling of Indians. "They have done it to late PV Narasimha Rao. They removed his dhoti, they have done it with NDA ministers like George Fernandes. In fact a number of film stars go abroad and suffer. Many simply do not talk about it ," Shukla said. "They even did this with BJP MP Kirti Azad because of his surname. He was with a Parliamentary delegation to the US, yet he was not spared."
I&B Minister Ambika Soni called for giving American visitors to India similar treatment while news agency IANS quoted SRK as saying, in response to a question whether he felt like meting out similar treatment to the Americans, "If they want I can frisk Angelina Jolie when she is here (in India)." Good to know his good humour has been restored.
| Oil trader under scrutiny for phenomenal success 16 Aug 2009, 1640 hrs IST, REUTERS | ||||||||
| ||||||||
| NEW YORK: An oil trader who has rocked Wall Street and the White House over his nine-figure salary clings to a low profile, quietly making trades Andrew Hall, 58, a British-born naturalized American, has been phenomenally successful with the Citigroup unit Phibro, earning an estimated $100 million this year while the parent company reported a net loss of $18.7 billion in 2008 and took $45 billion in taxpayer bailouts. In the previous five years, Hall earned more than $250 million, according to a Wall Street Journal analysis of securities filings and Hall's compensation structure. That has allowed him to acquire a fabulous art collection including his favorites among the German neoexpressionists and the American Andy Warhol, and he displays his art in his 1,000-year-old castle in Germany. But his pay packets also have grabbed the attention of Kenneth Feinberg, the White House pay czar who is examining the compensation of the top earners at financial companies that accepted government bailouts. A source close to the bank told Reuters on Wednesday that Hall's contract will be exempt from review because it was signed before a cut-off date of Feb. 11, 2009. But a separate source familiar with the matter said Feinberg will have flexibility in applying his authority on a case-by-case basis. To avoid a confrontation, Hall has proposed modifications to his contract, which could include converting some of his cash compensation into equity, the Journal reported on Thursday. Hall declined to be interviewed for this article. "Andy Hall has had a genius for seeing where the market will be a year or two years out and booking bets that have been inexpensive to put on and hugely profitable," said George Stein, managing director of Commodity Talent LLC, who has been in touch with people who have worked directly with Hall. "He's done this several times in his career and has attracted a following among oil traders and investors," Stein said. "Other oil traders would love to have his track record." One friend, an art dealer, said Hall remains grounded despite his wealth. | ||||||||
India's Rising Military Expenditure
May 30, 2001
ndia continues to arm and expand her Armed Forces at an unprecedented scale and yet talk of peace and stability in South Asia. India already has the third largest Army in the world and is the biggest military power in the South Asian region, with no external threat whatsoever to her security.
This feverish expansion in her military's aggressive potential is most likely to upset the regional balance of power in South Asia, thereby, destabilizing the region and may be edging it closer to an armed conflict.
In the present budget presented to parliament for the financial year 2001-2002 defence has been allocated Rs 620,000.00 million. This amount shows an increase of Rs 75,000 million over last year's revised estimates of Rs 544,610 million, or an increase of about 14 percent in defence spending this year. Last year India increased its defence budget by a whopping 28.2 percent or Rs 130,000.00 million. (by $ 3 billion to a total defence spending of $ 13.5 billion) Three years earlier in 1997 India's defence budget was increased by 24.4 percent and in 1994 by 20 percent. In between these major escalations there have been yearly increases ranging from 10 to 12 percent.
These large-scale increases in India's defence spending are certainly well beyond her legitimate defence and security requirements and consequently a source of great concern for her small neighbours particularly Pakistan which is now the only truly independent country on the periphery of India. This increase in India's defence spending has also surprised the foreign donors particularly those from the west who are helping India to cope with the financial and other losses after the disastrous earthquake in the province of Gujarat. It amounts to India diverting her own financial resources for unnecessarily expanding her Armed Forces and leaving the rehabilitation of the poor people of Gujarat to foreign sympathy donors.
Pakistan's Foreign Office voiced the governments deep concern and said India had launched itself on a massive programme of expansion of its conventional military capabilities without regard to regional stability. It strongly felt that the increase would upset the military balance in South Asia. The Foreign Office spokesman went on to say that "the massive acquisition of armaments by India is a cause for concern for Pakistan because the bulk of India's army is deployed on the Pakistani border. Therefore, we cannot but be deeply concerned." He also referred to India's huge 28.2 percent defence spending hike last year and the recent multi-billion dollar arms purchase from Russia.
In Pakistan on the other hand defence expenditure has not been increased for many years now. In 1994 when India raised its defence expenditure by 20 percent, the Prime Minister of Pakistan had remarked at the time that even in view of India's 20 percent increase in its defence budget, Pakistan cannot watch it, because if it did it would not be able to meet the 5.4 percent budget deficit target agreed with the IMF by the Moeen Qureshi government. The same principle guided the Pakistan government thinking in 1997 when India raised her defence spending by 24.4 percent, from Rs 364.9 billion in 1996 to Rs 454.2 billion in 1997. Last year while India raised her defence spending by 28.2 percent, Pakistan did not react but in fact reduced her defence spending by 8 percent. The amount thus saved was diverted to the government's poverty alleviation programme.
This year the federal cabinet under the chairmanship of the Chief Executive General Pervez Musharraf has decided in principle not to increase the defence budget, as proposed by the debt Reduction and Management Committee. A few days later while addressing the Young Presidents Organization (YPO) at Lahore the federal finance minister Shaukat Aziz said that the defence budget was being reduced. He said it had already been brought down to 4.70 percent of the GDP from over 8 percent during the past several years. At present to country's defence budget constituted 20 percent of its annual budget. He went on to say that 50 percent of the budget went to debt servicing. Pakistan is keeping her defence spending within her financial constraints imposed on the nation by the self-destruct financial policies adopted by the elected and unelected caretaker governments during the past decade.
Increase in India's defence expenditure is mainly utilized for the purchase of modern weapons, and equipment from abroad. Some amount is also used for updating her large indigenous weapons manufacturing base at home. Some additional induction of manpower for new weapons including guns and missiles of raising units and formation HQ in the Army, new aircraft in the Air Force and new surface ships, submarines, and an aircraft carrier for the Navy are also required. India's defence allocation in any case is not a true reflection of her defence spending as large amounts are shown under different heads in other ministries for security reasons, and often to bypass export regulations of other countries from where banned items may be imported.
India's recent negotiations and firm orders include 400 Bofors guns (used in Kargil) from Sweden, 310 modern T-90 tanks from Russia, mine-blast protection vehicles from Israel and ground and air surveillance devices for the army. The Indian Air Force was allocated a large amount for the purchase of 140 SU-30-MKI multirole fighter aircraft from Russia. 60 of the same aircraft were ordered earlier, 30 in 1966 and 30 in 1998, of these 18 aircraft have already reached India.
In addition to these India's Chief of Air Staff, Air Chief Marshal A.Y. Tipnis indicated at the 68th anniversary of the Indian Air Force that India was purchasing some more Mirage 2000 fighters from France, Jaguars from UK and M-17 helicopters from Russia. Negotiations are in progress for the purchase of a large number about 60-70 of advanced jet trainers (AJT) from UK.
For the Navy, India is purchasing a Russian aircraft carrier, the "Admiral Gorshkov". The carrier is a free gift but India has agreed to pay $ 650 million for a full refit of the ship. The Navy is also purchasing 40 Russian MIG-29K aircraft which would be the air arm of the new carrier. Another 26 could be added later. India has ordered three Krivak class frigates from Russia at a cost of about $ 1 billion. India is also negotiating with Russia for the lease of a nuclear submarine. The previous one INS "Chakra" was returned to Russia (the USSR) in the late 1980s after a three year's lease. The Navy has also purchased five KA-31 marine AEW helicopters. These could be used from the Russian aircraft carrier.
The 'Hindustan Times' reported from New Delhi on February 2nd 2001 that Russia was preparing to sign the lease of four TU-22M3 (backfire) long-range bombers armed with deadly KH-22 cruise missiles having a range of 500 km. The supersonic TU-22M3 bomber has a maximum range of 2410 km when flying at subsonic speed, and carrying a 12-tonne payload of bombs and missiles.
The allocation for the ordinance factories and other defence production and research facilities has been increased four times for Rs 2,620 million to Rs 10,320 million this year. India's nuclear and missile programme are also being pursued with great vigour and a lavish allocation of financial resources. New Delhi is building a "Credible nuclear deterrent", which according to defence analysts could cost upto $ 500 million a year.
I asked the Ambassador of the Russian Federation to Pakistan, HE Eduard S. Shevchenko during his trip to Karachi recently that India's purchase of large scale modern armaments from Russia was a source of great concern to Pakistan.
Particularly so when a clause in the present Indo-Russian contracts stipulates that the same items would not be sold to Pakistan. I reminded the ambassador that during the 1965 Indo-Pak war we outgunned the Indian artillery by only one regiment of 12 guns. After the war India purchased 400,130 mm long range guns from the USSR. But the USSR sold a 100 of the same guns to Pakistan as well. Thus keeping a ratio of 4 to 1 between the two armies. A four to one superiority by India is acceptable and can be handled by Pakistan. A balance was, therefore, maintained.
The Russian ambassador to Pakistan Mr Eduard Shevchenko is a charming career diplomat and said with the greatest of candour that if Russia did not sell arms to India, it could purchase the same from other countries. This is certainly true as other western countries are only too willing to oblige India. Russia is the fourth largest arms exporter of the world, way down after USA, UK and France. The ambassador went on to say that he was not aware if Pakistan had in fact shown a desire to purchase arms from Russia. He seemed to imply that Russia would certainly consider the offer.
The former Indian Defence Minister George Fernandes was adamant in maintaining that the increase in defence spending "will help us keep up the pace of weapons upgrading and modernization drives in the Armed Forces".
He went to the extent of saying after the massive damage of over Rs 14,000 crore in the Gujarat earthquake that: "No matter what problems, economic or otherwise, the country may face, the national defence cannot be held hostage to it".
He did not care to clarify that he wanted a strong defence against whom, when India had only small neighbours to contend with. In any case most of the defence items being imported by India had strong offensive overtures. It was the offensive capability of the Armed forces that was being enhanced.
The Indian Prime Minister Mr Vajpayee was, however, worried about the fiscal deficit.
While defending the budget outlay he said that strong steps were needed to tackle India's fiscal deficit which is targeted for next year at 4.7 percent of the GDP against its present 5.1 percent. "The increasing fiscal deficit was becoming a cause for concern, which is why we have had to take some hard steps to control it". Vajpayee told reporters after Finance Minister Sinha's presentation. Mr Vajpayee who is a moderate and the future hope of peace in South Asia was certainly pressurized by the hawks, to raise the defence budget. Certainly a step in the wrong directions.
It must be appreciated by all that for peace in South Asia there must be peace and amity between India and Pakistan. By the induction of more lethal and destructive arms into the region the objective of peace cannot be achieved. Greater the quantum of arms, greater would be the mistrust between India and Pakistan and greater the tension between the two. When tension increases violent actions are bound to follow, shattering the desired political will for peace.
Instead of purchasing more arms and destabilizing the region, what is required urgently is to initiate some confidence building measures. The prospect of an armed conflict should be reduced to the minimum particularly in the present nuclear environment that exists in South Asia. Resort to arms has failed to solve Indo-Pak problems in the past and are not likely to do so in the future as well. Measures adopted so far by India and Pakistan with regard to Kashmir have certainly borne fruit. There is less tension along the line of control in Kashmir as the guns are silent and should continue to be so.
The next logical step should be a dialogue between India and Pakistan to solve the long outstanding dispute on the status of Jammu and Kashmir. Solving the dispute in a spirit of some compromise on either side should bring peace to the region which seems to be the desire of the people.
Text source: LTG Sardar F. S. Lodi,
Defence Journal, May 2001
Tipping the balance
Unrest in China's Xinjiang Uighur Autonomous Region has raised the profile of separatist militancy in the region. Jane's looks into the actions and claims of the Turkistan Islamic Party and assesses what threat it poses.
14 August 2009
RELATED ARTICLE Uighur protests inflame China's Xinjiang provinceUK Merlins train in US to simulate Afghan conditions
The US Naval Air Facility, El Centro, was chosen because it mirrors the exact altitude and desert conditions found in Helmand province
14 August 2009
RELATED ARTICLE RAF's Merlin HC3 enters serviceBulgaria's airports prepare for bigger role
Projects are underway to boost capacity at the country's airports
12 August 2009
RELATED ARTICLE Airports look to thermal screening in battle to contain swine fluBoeing offers $1.5bn F/A-18E/F offset package to Brazil
Boeing will transfer USD1.5 billion in direct offsets to the Brazilian aerospace industry if it wins the country's F-X2 contract
13 August 2009
RELATED ARTICLE FAB three: Brazil fighter competition heats up as race enters final straightTwo of a kind: pragmatism drives UK carrier construction scheme
The manufacture programme for the UK Royal Navy's two new Queen Elizabeth-class aircraft carriers is rapidly gaining momentum. Richard Scott examines the build strategy for this ambitious project
13 August 2009
RELATED ARTICLE Royal Navy carrier programme faces 25% cost hikeUS Navy to spend $6bn on unmanned platforms
The five-year spending plan comprises USD4 billion for UAVs and USD1 billion each for unmanned surface platforms and unmanned underwater vehicles
12 August 2009
RELATED ARTICLE UAV competitors await US Navy decision on ScanEagleBad company - South Asia's regional criminal organisation
Having become one of India's most significant criminal syndicates, D-Company has allied itself with militant groups and even taken an active role in attacks.
11 August 2009
RELATED ARTICLE Asia's new power balanceUSAF stands up new nuclear command
The newly formed AFGSC will bring together USAF's nuclear-capable assets under a single command for the first time
12 August 2009
RELATED ARTICLE NATO receives first Boeing C-17 for Strategic Airlift Capability
More News from Jane's
List of countries by military expenditures
From Wikipedia, the free encyclopedia
 | This article needs additional citations for verification. Please help improve this article by adding reliable references. Unsourced material may be challenged and removed. (September 2007) |
 | Some parts of this article may be misleading. Please help clarify this article. Suggestions may be on the talk page. |
This is a list of countries by military expenditures per year using the latest information available. Some of the information is from the United States' Central Intelligence Agency's World Factbook.
Note that for some countries, no information was available to the World Factbook's compilers; these countries were omitted from the list. Consequently, the total world expenditure on armed forces is likely to be somewhat higher than that given.
Contents[hide] |
[edit] Chart by country or organization
Comparisons between figures in this table should be used with caution. There are comparison issues inherent with these figures: for example France, Italy and Spain include in their defence expenditures the costs of maintaining the Gendarmerie, Carabinieri and Guardia Civil- all of which are primarily domestic police forces. On the other hand some countries account military expenses under other budget voices: for example China, Mexico and Russia categorize spending on nuclear weapons, missile and fighter development as scientific expenses, spending on training are categorized under the education budget, and veteran pensions are afforded by welfare budget. The United States list spending on nuclear weapons under the budget for the Department of Energy, and much of the costs for the wars in Iraq and Afghanistan have been funded through emergency supplemental appropriations bills.
Note that this data is typically compiled by attempting to compute the local currency military expenditures, and then converting them at market exchange rates into a common currency. Therefore changes in the currency markets can cause a nations estimated military expenditures to change, even if that nation's budget remains constant. For developing economies, including China and India, this will result a smaller estimate than if the conversion were done using purchasing power parity. The differences can be substantial. For example, the Chinese Renminbi has a market price of 6.992 per US dollar at the market exchange rate, and an estimated purchasing power parity conversion of 3.694[1]. Using the purchasing power conversion would almost double the estimate of China's military expenditure. On the other hand, converting its entire military budget using a single purchasing power equivalent would be dramatically misleading, as many elements of the budget are not amenable to such a conversion and/or do not share the same conversion factor. For example, typical international commodities such as steel, copper, oil, used in the construction of various military equipment, high tech basic research, and foreign military purchases.
Rank  | | Country | Military expenditures (USD) | Date of information |
|---|---|---|---|---|
| — | World Total | 1,470,000,000,000 | 2008[2] | |
| — | NATO Total | 1,049,875,309,000 | [citation needed] | |
| 1 |  | United States | 636,292,979,000 | 2010[3][4] |
| — |  | European Union Total | 312,259,000,000 | 2008-2009 |
| 2 |  | People's Republic of China | 70,308,600,000 | 2009[5] |
| 3 |  | France | 68,584,100,000 | 2008-2009[6] |
| 4 |  | United Kingdom | 65,149,500,000 | FY 2009-10[7] |
| 5 |  | Japan | 48,860,000,000 | 2008[8] |
| 6 |  | Germany | 45,930,000,000 | 2008[9] |
| 7 |  | Italy | 40,050,000,000 | 2008[10] |
| 8 |  | Russian Federation | 39,600,000,000 | 2009[11] |
| 9 |  | India | 32,700,000,000 | 2009-2010[12] |
| 10 |  | Iraq | 32,400,000,000 | 2009[citation needed] |
| 11 |  | Saudi Arabia | 31,050,000,000 | 2008[13] |
| 12 |  | Turkey | 30,936,000,000 | 2008[14] |
| 13 |  | South Korea | 28,500,000,000 | 2008[15] |
| 14 |  | Brazil | 23,972,836,012 | 2009[16] |
| 15 |  | Australia | 23,040,500,000 | 2009-10[17] |
| 16 |  | Spain | 18,974,000,000 | 2008 (est.)[18] |
| 17 |  | Canada | 18,281,563,210 | 2009-2010[19] [20] |
| 18 |  | Israel | 13,300,000,000 | 2009[21] |
| 19 |  | Netherlands | 12,000,000,000 | 2008[22] |
| 20 |  | Poland | 11,791,000,000 | 2009[23] |
| 21 |  | Republic of China (Taiwan) | 10,500,000,000 | 2008 |
| 22 |  | Greece | 7,934,000,000 | 2007[24] |
| 23 |  | Singapore | 7,860,000,000 | 2009[25] |
| 24 |  | Pakistan | 7,800,000,000 | 2008 |
| 25 |  | Colombia | 7,480,000,000 | 2007[26] |
| 26 |  | Sweden | 6,309,137,714 | 2007[27] |
| 27 |  | Iran | 6,300,000,000 | 2005[28] |
| 28 |  | Mexico | 6,070,000,000 | 2006[29][30] |
| 29 |  | Norway | 5,725,000,000 | 2007 |
| 30 |  | North Korea | 5,500,000,000 | 2005[31] |
| 31 |  | Chile | 5,193,000,000 | 2007[32] |
| 32 |  | Thailand | 5,000,000,000 | 2009 [33] |
| 33 |  | Algeria | 4,997,000,000 | 2009 |
| 34 |  | Indonesia | 4,740,000,000 | 2008 |
| 35 |  | Argentina | 4,300,000,000 | NA |
| 36 |  | Morocco | 4,143,000,000 | 2009 |
| 37 |  | South Africa | 4,067,879,840 | 2008-2009[34] |
| 38 |  | Belgium | 4,000,000,000 | 2007[35] |
| 39 |  | Venezuela | 4,000,000,000 | 2007 |
| 40 |  | Finland | 3,700,000,000 | 2009[36] |
| 41 |  | Portugal | 3,497,800,000 | 2003 |
| 42 |  | Egypt | 3,300,000,000 | 2003[37] |
| 43 |  | Denmark | 3,271,600,000 | 2003 |
| 44 |  | Vietnam | 3,200,000,000 | 2005 [38] |
| 45 |  | Kuwait | 3,007,000,000 | 2005 |
| 46 |  | Austria | 2,978,000,000 | FY08[39] |
| 47 |  | Romania | 2,900,000,000 | 2007[40] |
| 48 |  | Czech Republic | 2,840,000,000 | 2008[41] |
| 49 |  | Peru | 2,829,300,000 | 2009 [42] |
| 50 |  | Switzerland | 2,548,000,000 | 2005 |
| 51 |  | Azerbaijan | 2,460,000,000 | 2009[43][44] |
| 52 |  | Ukraine | 2,066,806,000 | 2008[45] |
| 53 |  | Angola | 2,000,000,000 | 2005 |
| 54 |  | Ecuador | 1,691,776,803 | 2008 [46] |
| 55 |  | Malaysia | 1,690,000,000 | NA |
| 56 |  | Sri Lanka | 1,610,000,000 | 2009 [47] |
| 57 |  | United Arab Emirates | 1,600,000,000 | NA |
| 58 |  | New Zealand | 1,526,000,000 | 2008 |
| 59 |  | Slovakia | 1,408,000,000 | 2008 |
| 60 |  | Jordan | 1,392,000,000 | 2005 |
| 61 |  | Hungary | 1,376,000,000 | 2007 |
| 62 |  | Philippines | 1,348,000,000 | 2007 |
| 63 |  | Bulgaria | 1,339,000,000 | 2008[48] |
| 64 |  | Libya | 1,300,000,000 | 2007 |
| 65 |  | Ireland | 1,300,000,000 | 2007 |
| 66 |  | Serbia | 1,200,000,000 | 2007 |
| 67 |  | Croatia | 1,140,000,000 | 2008 |
| 68 |  | Yemen | 992,200,000 | 2005 |
| 69 |  | Syria | 858,000,000 | 2005 |
| 70 |  | Bangladesh | 836,900,000 | 2007 |
| 71 |  | Georgia | 780,000,000 | 2007 |
| 72 |  | Nigeria | 737,600,000 | 2005 |
| 73 |  | Qatar | 694,000,000 | 2005 |
| 74 |  | Cuba | 694,000,000 | NA |
| 75 |  | Bahrain | 627,700,000 | 2005 |
| 76 |  | Lithuania | 621,000,000 | 2007 |
| 77 |  | Sudan | 587,000,000 | 2004 |
| 78 |  | Lebanon | 540,600,000 | 2004 |
| 79 |  | Armenia | 495,000,000 | 2009[49] |
| 80 |  | Belarus | 420,500,000 | 2006 |
| 81 |  | Ethiopia | 400,000,000 | 2008/9[50][51] |
| 82 |  | Cyprus | 384,000,000 | NA |
| 83 |  | Uruguay | 371,200,000 | 2005 |
| 84 |  | Slovenia | 370,000,000 | 2007 |
| 85 |  | Tunisia | 356,000,000 | NA |
| 86 |  | Madagascar | 329,000,000 | 2005 |
| 87 |  | Botswana | 325,500,000 | 2005 |
| 88 |  | Brunei | 290,700,000 | 2004 |
| 89 |  | Kenya | 575,500,000 | 2009 |
| 90 |  | Estonia | 259,000,000 | FY06 |
| 91 |  | Oman | 252,990,000 | 2005 |
| 92 |  | Côte d'Ivoire | 246,600,000 | 2005 |
| 93 |  | Albania | 235,000,000 | 2007 |
| 94 |  | Bosnia and Herzegovina | 234,300,000 | NA |
| 95 |  | Luxembourg | 231,076,480 | 2003 |
| 96 |  | Cameroon | 230,200,000 | 2005 |
| 97 |  | Kazakhstan | 221,800,000 | FY02 |
| 98 |  | Eritrea | 220,100,000 | 2005 |
| 99 |  | Uzbekistan | 200,000,000 | NA |
| 100 |  | Uganda | 192,800,000 | 2005 |
| 101 |  | Dominican Republic | 180,000,000 | FY98 |
| 102 |  | Guatemala | 169,800,000 | 2005 |
| 103 |  | El Salvador | 161,700,000 | 2005 |
| 104 |  | Equatorial Guinea | 152,200,000 | 2005 |
| 105 |  | Panama | 150,000,000 | 2005 |
| 106 |  | Namibia | 149,500,000 | 2005 |
| 107 |  | Bolivia | 130,000,000 | 2005 |
| 108 |  | Zimbabwe | 124,700,000 | 2005 |
| 109 |  | Afghanistan | 122,400,000 | 2005 |
| 110 |  | Zambia | 121,700,000 | 2005 |
| 111 |  | Guinea | 119,700,000 | 2005 |
| 112 |  | Republic of Macedonia | 117,710,000 | 2006 |
| 113 |  | Senegal | 117,300,000 | 2005 |
| 114 |  | Cambodia | 112,000,000 | NA |
| 115 |  | Mali | 106,300,000 | 2005 |
| 116 |  | Nepal | 104,900,000 | 2005 |
| 117 |  | Congo, Democratic Republic of the | 103,700,000 | 2005 |
| 118 |  | Benin | 100,900,000 | 2005 |
| 119 |  | Honduras | 99,410,000 | 2005 |
| 120 |  | Turkmenistan | 90,000,000 | NA |
| 121 |  | Latvia | 87,000,000 | 2007 |
| 122 |  | Congo, Republic of the | 85,220,000 | 2005 |
| 123 |  | Ghana | 83,650,000 | 2005 |
| 124 |  | Costa Rica [52] | 83,460,000 | 2005 |
| 125 |  | Mozambique | 78,030,000 | 2005 |
| 126 |  | Burkina Faso | 74,830,000 | 2005 |
| 127 |  | Chad | 68,950,000 | 2005 |
| 128 |  | Liberia | 67,400,000 | 2005 |
| 129 |  | Trinidad and Tobago | 66,720,000 | 2003 |
| 130 |  | Rwanda | 53,660,000 | 2005 |
| 131 |  | Paraguay | 53,100,000 | 2003 |
| 132 |  | Maldives | 45,070,000 | 2005 |
| 133 |  | Niger | 44,780,000 | 2005 |
| 134 |  | Malta | 44,640,000 | 2005 |
| 135 |  | Burundi | 43,900,000 | 2005 |
| 136 |  | Swaziland | 41,600,000 | 2005 |
| 137 |  | Lesotho | 41,100,000 | 2005 |
| 138 |  | Burma | NA | NA |
| 139 |  | Fiji | 36,000,000 | 2004 |
| 140 |  | Tajikistan | 35,400,000 | FY01 |
| 141 |  | Nicaragua | 32,270,000 | 2005 |
| 142 |  | Jamaica | 31,170,000 | 2003 |
| 143 |  | Togo | 29,980,000 | 2005 |
| 144 |  | Djibouti | 29,050,000 | 2005 |
| 145 |  | Iceland | 26,000,000 | 2008[53] |
| 146 |  | Haiti | 25,960,000 | 2003 |
| 147 |  | Mongolia | 23,100,000 | FY02 |
| 148 |  | Somalia | 22,340,000 | 2005 |
| 149 |  | Tanzania | 21,200,000 | 2005 |
| 150 |  | Mauritania | 19,320,000 | 2005 |
| 151 |  | Kyrgyzstan | 19,200,000 | FY01 |
| 152 |  | Belize | 19,000,000 | 2005 |
| 153 |  | Papua New Guinea | 16,900,000 | 2003 |
| 154 |  | Central African Republic | 16,370,000 | 2005 |
| 155 |  | Malawi | 15,810,000 | 2005 |
| 156 |  | Seychelles | 14,850,000 | 2005 |
| 157 |  | Sierra Leone | 14,250,000 | 2005 |
| 158 |  | Comoros | 12,870,000 | 2005 |
| 159 |  | Mauritius | 12,040,000 | 2005 |
| 160 |  | Laos | 11,040,000 | 2005 |
| 161 |  | Guinea-Bissau | 9,455,000 | 2005 |
| 162 |  | Moldova | 8,700,000 | 2004 |
| 163 |  | Bhutan | 8,281,000 | 2005 |
| 164 |  | Suriname | 7,494,000 | 2005 |
| 165 |  | Cape Verde | 7,178,000 | 2005 |
| 166 |  | Guyana | 6,479,000 | 2003 |
| 167 |  | East Timor | 4,400,000 | FY03 |
| 168 |  | Bermuda, UK overseas territory | 4,030,000 | 2001 |
| 169 |  | Gambia, The | 1,547,000 | 2004 |
| 170 |  | San Marino | 700,000 | 2005 |
| 171 |  | São Tomé and Príncipe | 581,700 | 2004 |
[edit] Stockholm International Peace Research Institute figures
The Stockholm International Peace Research Institute produces a list of the top 10 biggest spenders of military expenditure annually in their Yearbook publication. The following figures are calculated for 2008 using market exchange rates.[54]
| Rank | Country | Spending ($ b.) | World Share (%) | |
| — | World Total | 1464.0 | 100 | |
| 1 | | United States | 607.0 | 41.5 |
| 2 | | China | 84.9[55] | 5.8 |
| 3 | | France | 65.7 | 4.5 |
| 4 | | United Kingdom | 65.3 | 4.5 |
| 5 | | Russian Federation | 58.6[56] | 4.0 |
| 6 | | Germany | 46.8 | 3.2 |
| 7 | | Japan | 46.3 | 3.2 |
| 8 | | Italy | 40.6 | 2.8 |
| 9 | | Saudi Arabia | 38.2 | 2.6 |
| 10 | | India | 30.0 | 2.1 |
[edit] List of countries by military expenditure as a percentage of GDP
Below is a list of countries ranked by order of military expenditure as a percentage of GDP. This statistic reflects the importance of military buildup and army modernization for all countries. It also indicated how much priority each country places in military expenditure.
The greater a country spends on its military as a percentage of its GDP, the less money it will have to spend on other crucial aspects such as infrastructure and education, and the more likely it will come under scrutiny from other countries.[57]
The trend is that developing countries, especially Middle Eastern countries with emerging markets due to their oil wealth, and countries in proximity of conflict zones seem to be spending the most as a percentage of their GDP to modernize their military and to try to catch up with Western countries, which spend less as a result of having built a strong modernized military over the past few decades.
The source of this table is the World Fact Book 2008, published by the Central Intelligence Agency, available at https://www.cia.gov/library/publications/the-world-factbook/rankorder/2034rank.html. Countries for which no information is available are not included in this list.
| Rank | | Country | Military expenditures as % of GDP | Date of information |
|---|---|---|---|---|
| 1 | | Oman | 11.4 | 2005 est. |
| 2 | | Qatar | 10 | 2005 est. |
| 3 | | Saudi Arabia | 10 | 2005 est. |
| 4 | | Iraq | 8.6 | 2006 |
| 5 | | Jordan | 8.6 | 2006 |
| 6 | | Israel | 7.3 | 2006 |
| 7 | | Yemen | 6.6 | 2006 |
| 8 | | Armenia | 6.5 | FY01 |
| 9 | | Eritrea | 6.3 | 2006 est. |
| 10 | | Macedonia | 6 | 2005 est. |
| 11 | | Burundi | 5.9 | 2006 est. |
| 12 | | Syria | 5.9 | 2005 est. |
| 13 | | Angola | 5.7 | 2006 |
| 14 | | Mauritania | 5.5 | 2006 |
| 15 | | Maldives | 5.5 | 2005 est. |
| 16 | | Kuwait | 5.3 | 2006 |
| 17 | | Turkey | 5.3 | 2005 est. |
| 18 | | El Salvador | 5 | 2006 |
| 19 | | Morocco | 5 | 2003 est. |
| 20 | | Singapore | 4.9 | 2005 est. |
| 21 | | Swaziland | 4.7 | 2006 |
| 22 | | Bahrain | 4.5 | 2006 |
| 23 | | Bosnia and Herzegovina | 4.5 | 2005 est. |
| 24 | | Brunei | 4.5 | 2006 |
| 25 | | Greece | 4.3 | 2005 est. |
| 26 | | Chad | 4.2 | 2006 |
| 27 | | United States | 4.06 | 2005 est. |
| 28 | | Libya | 3.9 | 2005 est. |
| 29 | | Russian Federation | 3.9 | 2005 |
| 30 | | Tajikistan | 3.9 | 2005 est. |
| 31 | | Cuba | 3.8 | 2006 est. |
| 32 | | Djibouti | 3.8 | 2006 |
| 33 | | Cyprus | 3.8 | 2005 est. |
| 34 | | Zimbabwe | 3.8 | 2006 |
| 35 | | Namibia | 3.7 | 2006 |
| 36 | | Colombia | 3.5 | 2007 est. |
| 37 | | Ecuador | 3.4 | 2008 est. |
| 38 |  | Gabon | 3.4 | 2005 est. |
| 39 | | Egypt | 3.4 | 2005 est. |
| 40 | | Turkmenistan | 3.4 | 2005 est. |
| 41 | | Algeria | 3.3 | 2006 |
| 42 | | Botswana | 3.3 | 2006 |
| 43 | | United Arab Emirates | 3.1 | 2005 est. |
| 44 | | Guinea-Bissau | 3.1 | 2005 est. |
| 45 | | Lebanon | 3.1 | 2005 est. |
| 46 | | Congo, Republic of the | 3.1 | 2006 |
| 47 |  | Solomon Islands | 3 | 2006 |
| 48 | | Cambodia | 3 | 2005 est. |
| 49 | | Ethiopia | 3 | 2006 |
| 50 | | Indonesia | 3 | 2005 est. |
| 51 | | Sudan | 3 | 2005 est. |
| 52 | | Pakistan | 3 | 2007 est. |
| 53 | | Rwanda | 2.9 | 2006 est. |
| 54 | | Comoros | 2.8 | 2006 |
| 55 | | Ecuador | 2.8 | 2006 |
| 56 | | Kenya | 2.8 | 2006 |
| 57 | | Chile | 2.7 | 2006 |
| 58 | | Korea, South | 2.7 | 2006 |
| 59 | | Azerbaijan | 2.6 | 2005 est. |
| 60 | | Lesotho | 2.6 | 2006 |
| 61 | | France | 2.6 | 2005 est. |
| 62 | | Brazil | 2.6 | 2006 est. |
| 63 | | Sri Lanka | 2.6 | 2006 |
| 64 | | Bulgaria | 2.6 | 2005 est. |
| 65 | | Congo, Democratic Republic of the | 2.5 | 2006 |
| 66 | | India | 2.5 | 2006 |
| 67 | | Iran | 2.5 | 2006 |
| 68 | | Vietnam | 2.5 | 2005 est. |
| 69 | | Australia | 2.4 | 2006 |
| 70 | | United Kingdom | 2.4 | 2005 est. |
| 71 | | Croatia | 2.39 | 2005 est. |
| 72 | | Portugal | 2.3 | 2005 est. |
| 73 | | Sierra Leone | 2.3 | 2006 |
| 74 | | Fiji | 2.2 | 2005 est. |
| 75 | | Taiwan | 2.2 | |
| 76 | | Uganda | 2.2 | 2006 |
| 77 | | Burma | 2.1 | 2005 est. |
| 78 | | Malaysia | 2.03 | 2005 est. |
| 79 | | Estonia | 2 | 2005 est. |
| 80 | World | 2 | 2005 est. | |
| 81 | | Uzbekistan | 2 | 2005 est. |
| 82 | | Seychelles | 2 | 2006 est. |
| 83 | | Finland | 2 | 2005 est. |
| 84 | | Afghanistan | 1.9 | 2006 est. |
| 85 | | Romania | 1.9 | 2007 est. |
| 86 | | Norway | 1.9 | 2005 est. |
| 87 | | Mali | 1.9 | 2006 |
| 88 | | Bolivia | 1.9 | 2006 |
| 89 | | Slovakia | 1.87 | 2005 est. |
| 90 | | Guyana | 1.8 | 2006 |
| 91 | | Thailand | 1.8 | 2005 est. |
| 92 | | Zambia | 1.8 | 2005 est. |
| 93 | | Italy | 1.8 | 2005 est. |
| 94 | | Hungary | 1.75 | 2005 est. |
| 95 | | Poland | 1.71 | 2005 est. |
| 96 | | People's Republic of China | 1.7 | 2009 |
| 97 | | Benin | 1.7 | 2006 |
| 98 | | Guinea | 1.7 | 2006 |
| 99 | | South Africa | 1.7 | 2006 |
| 100 | | Slovenia | 1.7 | 2005 est. |
| 101 | | Cote d'Ivoire | 1.6 | 2005 est |
| 102 | | Netherlands | 1.6 | 2005 est. |
| 103 | | Togo | 1.6 | 2005 est. |
| 104 | | Uruguay | 1.6 | 2006 |
| 105 | | Nepal | 1.6 | 2006 |
| 106 | | Bangladesh | 1.5 | 2006 |
| 107 | | Sweden | 1.5 | 2005 est. |
| 108 | | Peru | 1.5 | 2006 |
| 109 | | Nigeria | 1.5 | 2006 |
| 110 | | Denmark | 1.5 | |
| 111 | | Germany | 1.5 | 2005 est. |
| 112 | | Albania | 1.49 | 2005 est. |
| 113 | | Czech Republic | 1.46 | 2007 est. |
| 114 | | Belize | 1.4 | 2006 |
| 115 | | Ukraine | 1.4 | 2005 est. |
| 116 | | Belarus | 1.4 | 2005 est. |
| 117 | | Kyrgyzstan | 1.4 | 2005 est. |
| 118 | | Papua New Guinea | 1.4 | 2005 est. |
| 119 | | Tunisia | 1.4 | 2006 |
| 120 | | Senegal | 1.4 | 2005 est. |
| 121 | | Mongolia | 1.4 | 2006 |
| 122 | | Argentina | 1.3 | 2005 est. |
| 123 | | Cameroon | 1.3 | 2006 |
| 124 | | Niger | 1.3 | 2006 |
| 125 | | Malawi | 1.3 | 2006 |
| 126 | | Liberia | 1.3 | 2006 est. |
| 127 | | Belgium | 1.3 | 2005 est. |
| 128 | | Latvia | 1.2 | 2005 est. |
| 129 | | Burkina Faso | 1.2 | 2006 |
| 130 | | Venezuela | 1.2 | 2005 est. |
| 131 | | Spain | 1.2 | 2005 est. |
| 132 | | Lithuania | 1.2 | |
| 133 | | Canada | 1.1 | 2005 est. |
| 134 | | Central African Republic | 1.1 | 2006 est. |
| 135 | | Bhutan | 1 | 2005 est. |
| 136 | | Madagascar | 1 | 2006 |
| 137 | | Switzerland | 1 | 2005 est. |
| 138 | | Panama | 1 | 2006 |
| 139 | | Paraguay | 1 | 2006 est. |
| 140 | | New Zealand | 1 | 2005 est. |
| 141 | | Austria | 0.9 | 2005 est. |
| 142 | | Kazakhstan | 0.9 | FY02 |
| 143 | | Luxembourg | 0.9 | 2005 est. |
| 144 |  | Tonga | 0.9 | 2006 est. |
| 145 | | Somalia | 0.9 | 2005 est. |
| 146 | | Philippines | 0.9 | 2005 est. |
| 147 | | Ireland | 0.9 | 2005 est. |
| 148 | | Dominican Republic | 0.8 | 2006 |
| 149 | | São Tomé and Príncipe | 0.8 | 2006 |
| 150 | | Japan | 0.8 | 2006 |
| 151 | | Mozambique | 0.8 | 2006 |
| 152 | | Ghana | 0.8 | 2006 est. |
| 153 | | Cape Verde | 0.7 | 2005 |
| 154 | | Malta | 0.7 | 2006 est. |
| 155 | | Honduras | 0.6 | 2006 est. |
| 156 | | Nicaragua | 0.6 | 2006 |
| 157 | | Suriname | 0.6 | 2006 est. |
| 158 | | Jamaica | 0.6 | 2006 est. |
| 159 | | Georgia | 0.59 | 2005 est. |
| 160 |  | Barbados | 0.5 | 2006 est. |
| 161 | | Gambia, The | 0.5 | 2006 |
| 162 |  | Bahamas, The | 0.5 | 2006 |
| 163 | | Mexico | 0.5 | 2006 est. |
| 164 | | Laos | 0.5 | 2006 |
| 165 | | Costa Rica [52] | 0.4 | 2006 |
| 166 | | Guatemala | 0.4 | 2006 |
| 167 | | Moldova | 0.4 | 2005 est. |
| 168 | | Haiti | 0.4 | 2006 |
| 169 | | Mauritius | 0.3 | 2006 est. |
| 170 | | Trinidad and Tobago | 0.3 | 2006 |
| 171 | | Tanzania | 0.2 | 2005 est. |
| 172 | | Bermuda | 0.11 | 2005 est. |
| 173 | | Equatorial Guinea | 0.1 | 2006 est. |
| 174 | | Iceland | 0.0 | 2005 est. |
| - | | European Union | 0.7-4.3 | 2005-2007 est. |
[edit] List of countries by military expenditure as purchasing power parity (PPP)
Here is a list of major spenders in terms of purchasing power parity (PPP) estimated by the Stockholm International Peace Research Institute (SIPRI). These figures should be treated with caution since estimating defence expenditure using PPP can be misleading[58].
| Rank | Country | Military expenditures as PPP (USD billion) | |
|---|---|---|---|
| 1 | | USA | 547 |
| 2 | | China | 140 |
| 3 | | Russian Federation | 78.7 |
| 4 | | India | 72.7 |
| 5 | | United Kingdom | 54.7 |
| 6 | | Saudi Arabia | 52.8 |
| 7 | | France | 47.9 |
| 8 | | Japan | 37.0 |
| 9 | | Germany | 33.0 |
| 10 | | Italy | 29.6 |
| 11 | | South Korea | 29.4 |
| 12 | | Brazil | 26.1 |
| 13 | | Iran | 22.1 |
| 14 | | Turkey | 16.5 |
| 15 | | Republic of China | 15.8 |
[edit] See also
 | Wikinews has related news: Global annual military spending tops $1.2 trillion |
- Military budget of the United States
- List of countries by size of armed forces
- List of countries without an army
[edit] External Links
- List of Countries by Military Expenditure per Capita Comparison using data from this page and countries by population
[edit] Notes
- ^ Data as of Oct 2007. See Renminbi
- ^ The FY 2009 Pentagon Spending Request - Global Military Spending http://www.armscontrolcenter.org/policy/securityspending/articles/fy09_dod_request_global/ Center for Arms Control and Non/Proliferation study
- ^ http://www.aip.org/fyi/2009/102.html
- ^ http://www.defpro.com/news/details/8887/
- ^ China's defense budget to grow 14.9% in 2009
- ^ Conférence de presse de M. Hervé Morin, ministre de la Défense
- ^ HM Treasury: Budget 2009
- ^ Asia Times Online
- ^ Deutsche Welle
- ^ http://www.scribd.com/doc/5207716/Budget-Difesa-ITALIA-2008.
- ^ http://news.xinhuanet.com/english/2009-05/07/content_11325911.htm
- ^ [1]
- ^ Stockholm International Peace Research Institute: The fifteen major spenders in 2007.
- ^ NATO-Turkey Compendium on Financial and Economic Data Relating to Defense
- ^ http://www.koreatimes.co.kr/www/news/nation/2008/01/205_16590.html
- ^ National Congress of Brazil. Brazilian Federal Budget (2009) - Ministry of Defense (Ministério da Defesa).
- ^ Australian Department of Defence (2009). Defence Portfolio Budget Statements 2009-10. Table 5, Page 19.
- ^ http://www.nato.int/docu/pr/2009/p09-009.pdf
- ^ Departmental Planned Spending and Full-Time Equivalents
- ^ Exchange rates 14 Aug 2009
- ^ 51.6 mld NIS
- ^ Rijksbegroting
- ^ 25 mld PLN
- ^ Stockholm International Peace Research Institute
- ^ http://www.straitstimes.com/Breaking%2BNews/Singapore/Story/STIStory_337818.html
- ^ http://www.mindefensa.gov.co/descargas/Documentos_Home/Presupuesto_MDN_2007.pdf
- ^ Så fördelas pengarna
- ^ Iran's defense spending 'a fraction of Persian Gulf neighbors'
- ^ Global Firepower, Mexico profile
- ^ CIA World Factbook, Military expenditures
- ^ Party for Socialism and Liberation (PSL): The U.S. military machine: North Korea bomb test in perspective
- ^ Saorbats, Chile profile
- ^ Ministry of Finance - Thailand.
- ^ Budget at a glance
- ^ Uitgaven
- ^ http://www.vm.fi/vm/fi/04_julkaisut_ja_asiakirjat/01_julkaisut/01_budjetit/20090126Budjet/Budjettikatsaus_suomi_NETTI%2bKANNET.pdf
- ^ Federation of American Scientists—Egypt Military Force
- ^ Global Security military expenditures
- ^ Austrian Budget for 2007-2008: 2.037 Billion Euros/ Exchangerate 1:1.46
- ^ (MoND Budget as of 2007)
- ^ The FY 2009 Pentagon Spending Request - Global Military Spending http://www.armscontrolcenter.org/policy/securityspending/articles/fy09_dod_request_global/ Center for Arms Control and Non/Proliferation study
- ^ Ministry of Economy and Finance of Peru.
- ^ The budget of the Azeri Armed Forces reaches $2 Billion
- ^ http://jamestown.org/edm/article.php?article_id=2373496 Azerbaijan military budget to increase by $343 mln from 2008 budget
- ^ Ukrainian Armed Forces White Book
- ^ [www.ccmr.org/public/library_file_proxy.cfm/lid/5590].
- ^ Ministry of Finance and Planning Sri Lanka.
- ^ План за организационно изграждане и модернизация на въоръжените сили до 2015 година
- ^ Armenian military budget 2009
- ^ Al Jazeera English - Africa - Famine-hit Ethiopia ups army budget
- ^ allAfrica.com: Ethiopia: Country to Spend $5.6 Billion in 2008/09 (Page 1 of 1)
- ^ a b Costa Rica abolished its military in 1949, but the CIA World Factbook counts the expenditures of the Ministry of Public Security as military spending. SIPRI lists the amount as "not available or not applicable", yet mentions "Expenditure for paramilitary forces, border guard, and maritime and air surveillance is less than 0.05% of GDP"
- ^ Icelandic State Budget for 2008
- ^ http://www.sipri.org/yearbook/2009/05/05A
- ^ SIPRI estimate
- ^ SIPRI estimate
- ^ World Politics Review | China's Latest Military Spending Increase Garners Anxious Reactions
- ^ The Chinese Defense Budget: Myths and Reality http://www.cato-at-liberty.org/2007/04/23/the-chinese-defense-budget-myths-and-reality/
[edit] References
Military budget of the United States
From Wikipedia, the free encyclopedia
 |
| Part of a series on: |
| U.S. Budget & Debt Topics |
The military budget is that portion of the United States discretionary federal budget that is allocated to the Department of Defense. This military budget pays the salaries, training, and healthcare of uniformed and civilian personnel, maintains arms, equipment and facilities, funds operations, and develops and buys new equipment. The budget funds all branches of the U.S. military: Army, Navy, Air Force, Marine Corps, and Coast Guard.
For the 2009 fiscal year, the base budget rose to $515.4 billion. Adding emergency discretionary spending and supplemental spending brings the sum to $651.2 billion.[1] This does not include many military-related items that are outside of the Defense Department budget, such as nuclear weapons research, maintenance and production (about $9.3 billion, which is in the Department of Energy budget), Veterans Affairs (about $33.2 billion), interest on debt incurred in past wars, or the wars in Iraq and Afghanistan (which are largely funded through extra-budgetary supplements, about $170 billion in 2007). As of 2009, the United States government is spending about $1 trillion annually on defense-related purposes. [2]
Contents[hide] |
[edit] Budget for 2009
[edit] By title
The federally budgeted (see below) military expenditure of the United States Department of Defense for fiscal year 2009 is[1]:
| Components | Funding | Change From FY08 |
| Operations and maintenance | $179.8 Bil. | +9.5% |
| Military Personnel | $125.2 Bil. | +7.5% |
| Procurement | $104.2 Bil. | +5.3% |
| Research, Development, Testing & Evaluation | $79.6 Bil. | +4.1% |
| Military Construction | $21.2 Bil. | +19.1% |
| Family Housing | $3.2 Bil. | +10.3% |
| Resolving and Management Funds | $2.2 Bil. | -18.5% |
| Total Base Spending | $515.4 Bil. | +5.7% |
Not included in the DoD budget is $23.4 billion to be spent by the Department of Energy to develop and maintain nuclear warheads.[3]
[edit] By service
| Service | 2007 Budget request | Percentage of Total |
| Army | $110.3 Bil. | 25.1% |
| Navy/Marine Corps | $127.1 Bil. | 28.8% |
| Air Force | $130.2 Bil. | 29.5% |
| Defense Wide | $73.4 Bil. | 16.6% |
[edit] Programs spending more than $1 billion
The $84.1 billion procurement budget includes several programs with 2008 allocations of more than $1 billion.
| Program | 2008 Budget request[4] | Change, 2007 to 2008 |
| Missile Defense | $8.8 Bil. | -6.2% |
| F-35 Joint Strike Fighter | $6.1 Bil. | +23.0% |
| F-22 Raptor | $4.6 Bil. | +15.0% |
| Future Combat System | $3.7 Bil. | +8.1% |
| DDG 1000 Destroyer | $3.5 Bil. | +2.7% |
| Carrier Replacement Program | $3.1 Bil. | +117.7% |
| F/A-18E/F Hornet | $2.6 Bil. | -13.5% |
| Virginia class submarine | $2.7 Bil. | -1.1% |
| V-22 Osprey | $2.6 Bil. | +23.9% |
| MH-60R/S | $1.6 Bil. | +3.9% |
| C-130 | $1.6 Bil. | +7.3% |
| Chemical Demilitarization | $1.5 Bil. | +16.6% |
| San Antonio class amphibious transport dock | $1.4 Bil. | +263.5% |
| Littoral combat ship | $1.2 Bil. | +30.4% |
| Stryker | $1.2 Bil. | +29.6% |
| Evolved Expendable Launch Vehicle | $1.2 Bil. | +33.8% |
| Space-Based Infrared System | $1.1 Bil. | +59.9% |
| EA-18G Growler | $1.6 Bil. | +56.4% |
[edit] Military budget and total US federal spending
The U.S. defense budget accounted in fiscal year 2008 for about 21% of the United States federal budget.
Because of constitutional limitations, military funding is appropriated in a discretionary spending account. (Such accounts permit government planners to have more flexibility to change spending each year, as opposed to mandatory spending accounts that mandate spending on programs outside of the budgetary process.) In recent years, discretionary spending as a whole has amounted to about one-third of total federal outlays.[5] Military funding's share of discretionary funding was 50.5% in 2003, and has risen steadily ever since.[6]
For FY 2008, basic spending on defense amounted to roughly 4 or 5% of the national GDP, depending on the source.[7][8] For FY 2009, defense spending amount to 4.7% of GDP.[9] Because the U.S. GDP has risen over time, the military budget can rise in absolute terms while shrinking as a percentage of the GDP. For example, the Department of Defense budget is slated to rise to $574.5 billion in 2014, up 12% from 2009 but representing a predicted decline to 3.09% of GDP.[10]
The recent invasions of Iraq and Afghanistan are largely funded through supplementary spending bills outside the Federal Budget, so they are not included in the military budget figures listed above.[11] In addition, the United States has black budget military spending which is not listed as Federal spending and is not included in published military spending figures. Other military-related items, like maintenance of the nuclear arsenal and the money spent by the Veterans Affairs Department, are not included in the official budget. Thus, the total amount spent by the United States on military spending is higher.
[edit] Comparison with other countries
The 2005 U.S. military budget is almost as much as the rest of the world's defense spending combined [12] and is over eight times larger than the military budget of China (compared at the nominal US dollar / Renminbi rate, not the PPP rate). The United States and its close allies are responsible for about two-thirds of the world's military spending (of which, in turn, the U.S. is responsible for the majority). In 2007, US military spending was above 1/4 of combined industrial and agricultural production in the USA.
In 2003, the United States spent about 47% of the world's total military spending of US$910.6 billion, according to the Stockholm International Peace Research Institute.
The United States spends 4.06% of its GDP on its military (considering only basic Department of Defense budget spending), more than France's 2.6% and less than Saudi Arabia's 10%.[13] This is historically low for the United States since it peaked in 1944 at 37.8% of GDP (it reached the lowest point of 3.0% in 1999-2001). Even during the peak of the Vietnam War the percentage reached a high of 9.4% in 1968.[14]
[edit] Commentary on military budget
During FY 2008, the U.S. government spent nearly $800 billion on defense and homeland security, approximately 32% of tax collections of $2.5 trillion.[15]
- Department of Defense: $741 billion
- Homeland Security: $52 billion
In February 2009, Congressman Barney Frank, D-Mass., called for a reduction in the defense budget: "The math is compelling: if we do not make reductions approximating 25 percent of the military budget starting fairly soon, it will be impossible to continue to fund an adequate level of domestic activity even with a repeal of Bush's tax cuts for the very wealthy. I am working with a variety of thoughtful analysts to show how we can make very substantial cuts in the military budget without in any way diminishing the security we need...[American] well-being is far more endangered by a proposal for substantial reductions in Medicare, Social Security or other important domestic areas than it would be by canceling weapons systems that have no justification from any threat we are likely to face."[16]
Republican historian Robert Kagan has argued that 2009 is not the time to cut defense spending, relating such spending to jobs and support for allies: "A reduction in defense spending this year would unnerve American allies and undercut efforts to gain greater cooperation. There is already a sense around the world...that the United States is in terminal decline. Many fear that the economic crisis will cause the United States to pull back from overseas commitments. The announcement of a defense cutback would be taken by the world as evidence that the American retreat has begun."[17]
U.S. Secretary of Defense Robert Gates wrote in January 2009 that the U.S. should adjust its priorities and spending to address the changing nature of threats in the world: "What all these potential adversaries -- from terrorist cells to rogue nations to rising powers -- have in common is that they have learned that it is unwise to confront the United States directly on conventional military terms. The United States cannot take its current dominance for granted and needs to invest in the programs, platforms, and personnel that will ensure that dominance's persistence. But it is also important to keep some perspective. As much as the U.S. Navy has shrunk since the end of the Cold War, for example, in terms of tonnage, its battle fleet is still larger than the next 13 navies combined -- and 11 of those 13 navies are U.S. allies or partners."[18] Secretary Gates announced some of his budget recommendations in April 2009.[19]
The Congressional Research Service has noted a discrepancy between a budget that is declining as a percentage of GDP while the responsibilities of the DoD have not decreased and additional pressures on the defense budget have arisen due to broader missions in the post-9/11 world, dramatic increases in personnel and operating costs, and new requirements resulting from wartime lessons in the Iraq War and Operation Enduring Freedom.[20]
[edit] See also
| Wikinews has related news: Global annual military spending tops $1.2 trillion |
- Foreign policy of the United States
- United States and state terrorism
- Overseas expansion of the United States
- Overseas interventions of the United States
- List of United States military history events
- List of United States military bases
- List of countries and federations by military expenditures
- List of countries by size of armed forces
[edit] References
- ^ a b http://www.gpoaccess.gov/usbudget/fy09/pdf/budget/defense.pdf
- ^ Robert Higgs. "The Trillion-Dollar Defense Budget Is Already Here". http://www.independent.org/newsroom/article.asp?id=1941. Retrieved March 15 2007.
- ^ http://www.armscontrolcenter.org/archives/002238.php
- ^ Department of Defense: 2006-2008 Program Acquisition Costs by Weapon System
- ^ Congressional Appropriations: An Updated Analysis
- ^ "Fiscal Year 2002 Budget". Center for Defense Information. http://www.cdi.org/issues/budget/fy'02/. Retrieved 2006-07-13.
- ^ Eaglen, Mackenzie; Eric Sayers (23-Mar-2009). "USA: A 21st Century Maritime Posture for an Uncertain Future". Defense Industry Daily (Watershed Publishing). http://www.defenseindustrydaily.com/USA-A-21st-Century-Maritime-Posture-for-an-Uncertain-Future-05342/. Retrieved 12 July 2009.
- ^ "Choices or Echoes?", Cato Institute
- ^ "Obama's Budget Would Return Defense Spending to Pre-9/11 Levels". The Heritage Foundation. http://www.heritage.org/research/features/BudgetChartBook/Obama-Budget-Would-Return-Defense-Spending-to-Pre-911-Levels.aspx. Retrieved 13 July 2009.
- ^ CRS Defense: FY2010 Authorization and Appropriations, page 4
- ^ David Isenberg, Budgeting for Empire: The effect of Iraq and Afghanistan on Military Forces, Budgets and Plans
- ^ "World Military Spending". Global Issues That Affect Everyone. 2006-03-27. http://www.globalissues.org/Geopolitics/ArmsTrade/Spending.asp. Retrieved 2006-07-13.
- ^ CIA World Factbook. "Rank Order - Military expenditures percent of GDP". https://www.cia.gov/library/publications/the-world-factbook/rankorder/2034rank.html. Retrieved 2006-05-26.
- ^ "Relative Size of US Military Spending from 1940 to 2003". TruthAndPolitics.org. http://www.truthandpolitics.org/military-relative-size.php.
- ^ GAO-2008 Report Page 35
- ^ Barney Frank - The Nation
- ^ Robert Kagan - Washington Post
- ^ Gates-A Balanced Strategy
- ^ Slate-Gates Follows Through
- ^ CRS Defense: FY2010 Authorization and Appropriations, pages 6 - 8
[edit] External links
- "Office of the Under Secretary of Defense (Comptroller)" Annual Department of Defense budget materials.
- "MilitaryBudget.info" Information and news about the defense budget.
World Military Spending
Author and Page information
Of all the enemies to public liberty war is, perhaps, the most to be dreaded because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes … known instruments for bringing the many under the domination of the few.… No nation could preserve its freedom in the midst of continual warfare.
— James Madison, Political Observations, 1795
This web page has the following sub-sections:
World Military Spending
Global military expenditure stands at over $1.2 trillion in annual expenditure and has been rising in recent years.
(1991 figures are unavailable.)
Summarizing some key details from chapter 5 of the Stockholm International Peace Research Institute (SIPRI)'s 2008 Year Book on Armaments, Disarmament and International Security for 2007:
- World military expenditure in 2007 is estimated to have reached $1.339 trillion in current dollars (just over $1.2 trillion in 2005 constant dollars, as per above graph);
- This represents a 6 per cent increase in real terms since 2006 and a 45 per cent increase over the 10-year period since 1998;
- This corresponds to 2.5 per cent of world gross domestic product (GDP), or $202 for each person in the world;
- The USA, responsible for about 80 per cent of the increase in 2005, is the principal determinant of the current world trend, and its military expenditure now accounts for just under half of the world total, at 45% of the world total;
SIPRI also comments on the increasing concentration of military expenditure, i.e. that a small number of countries spend the largest sums:
- The 15 countries with the highest spending account for 83 per cent of the total;
- The USA is responsible for 45 per cent of the world total, distantly followed by the UK, China, France, and Japan each with 4 to 5 per cent of the world share.
Using SIPRI data:
SIPRI also adds that recently more countries have increased their military spending. Factors include
- Foreign policy objectives
- Real or perceived threats
- Armed conflict and policies to contribute to multilateral peacekeeping operations
- Availability of economic resources
The last point refers to rapidly developing nations like China and India that have seen their economies boom in recent years. In addition, high and rising world market prices for minerals and fossil fuels (at least until recently) have also enabled some nations to spend more on their militaries.
In their earlier 2006 report SIPRI noted that, Algeria, Azerbaijan, Russia and Saudi Arabia have been able to increase spending because of increased oil and gas revenues, while Chile and Peru's increases are resource-driven, "because their military spending is linked by law to profits from the exploitation of key natural resources."
Also, "China and India, the world's two emerging economic powers, are demonstrating a sustained increase in their military expenditure and contribute to the growth in world military spending. In absolute terms their current spending is only a fraction of the USA's. Their increases are largely commensurate with their economic growth."
The military expenditure database from SIPRI also shows that while percentage increases over the previous decade may be large for some nations, their overall spending amounts may be varied:
The latest figures SIPRI uses are from 2007, and where necessary (e.g. China and Russia), include estimates. These figures also do not reflect the global financial crisis, the worst since the Great Depression of the 1930s, which future figures will likely reflect.
In a similar report from 2004, the authors also noted that, "There is a large gap between what countries are prepared to allocate for military means to provide security and maintain their global and regional power status, on the one hand, and to alleviate poverty and promote economic development, on the other."
Indeed, compare the military spending with the entire budget of the United Nations:
The United Nations and all its agencies and funds spend about $20 billion each year, or about $3 for each of the world's inhabitants. This is a very small sum compared to most government budgets and it is just a tiny fraction of the world's military spending. Yet for nearly two decades, the UN has faced a financial difficulties and it has been forced to cut back on important programs in all areas. Many member states have not paid their full dues and have cut their donations to the UN's voluntary funds. As of August 31, 2008, members' arrears to the Regular Budget topped $919 million, of which the United States alone owed $846 million (92% of the regular budget arrears).
— UN Financial Crisis, Global Policy Forum (accessed February 22, 2009)
The UN was created after World War II with leading efforts by the United States and key allies.
- The UN was set up to be committed to preserving peace through international cooperation and collective security.
- Yet, the UN's entire budget is just a tiny fraction of the world's military expenditure, approximately 1.5%
- While the UN is not perfect and has many internal issues that need addressing, it is revealing that the world can spend so much on their military but contribute so little to the goals of global security, international cooperation and peace.
-
For more info about the United Nations»
- This web site's section on the United Nations and Development looks at its role in fighting poverty and other issues, plus some of the problems it faces.
- The United Nations web site
At the current level of spending (for 2006), it would take just a handful of years for the world's donor countries to cover their entire aid shortfall, of some 2 trillion dollars in promised official aid since 1970, more than 35 years ago.
Other spending priorities»
These issues have been of concern for a number of years. For example, consider this from 1998:
The illegal international drugs trade is estimated to be worth more than $400 billion, coming second only to military expenditure.
And consider the following, reflecting world priorities:
| Global Priority | $U.S. Billions |
|---|---|
| Cosmetics in the United States | 8 |
| Ice cream in Europe | 11 |
| Perfumes in Europe and the United States | 12 |
| Pet foods in Europe and the United States | 17 |
| Business entertainment in Japan | 35 |
| Cigarettes in Europe | 50 |
| Alcoholic drinks in Europe | 105 |
| Narcotics drugs in the world | 400 |
| Military spending in the world | 780 |
And compare that to what was estimated as additional costs to achieve universal access to basic social services in all developing countries:
| Global Priority | $U.S. Billions |
|---|---|
| Basic education for all | 6 |
| Water and sanitation for all | 9 |
| Reproductive health for all women | 12 |
| Basic health and nutrition | 13 |
(Source: The state of human development, United Nations Human Development Report 1998, Chapter 1, p.37)
It would seem ironic that the world spends more on things to destroy each other (military) and to destroy ourselves (drugs, alcohol and cigarettes) than on anything else.
These statistics are quickly getting old. If someone has had the time to research updated statistics, please let me know!
US Military Spending
The United States has unquestionably been the most formidable military power in recent years. Its spending levels, as noted earlier, is the principle determinant of world military spending and is therefore worth looking at further.
Generally, US military spending has been on the rise. Recent increases are attributed to the so-called War on Terror and the Afghanistan and Iraq invasions, but it had also been rising before that.
For example, Christopher Hellman, an expert on military budget analysis notes in The Runaway Military Budget: An Analysis 
Travis Sharp, from the Center for Arms Control provides spending figures from 2000 to the requested figures for 2010 shown here:
Overall spending
Defense budget vs War spending
The decline seen in recent years above are due to a number of factors:
- Iraq war reduction and redeployment to Afghanistan
- 2010 figures are preliminary as of writing, not including nuclear weapons programs
- The global financial crisis, affecting all nations, is making governments rethink some military spending.
Nonetheless, compared to the rest of the world, these numbers have long been described as "staggering."
In Context: US Military Spending Versus Rest of the World
When the US Fiscal Year 2009 budget request for military spending came out in early 2008, Travis Sharp and Christopher Hellman (mentioned earlier) projected the spending of other nations planned for 2008 thus allowing comparison between US military spending and the rest of the world:
Pie chart
Top spenders ranked (and sources)
| Military spending in 2008 ($ Billions, and percent of total) | |||
| Country | Dollars (billions) | % of total | Rank |
|---|---|---|---|
| Source: U.S. Military Spending vs. the World, Center for Arms Control and Non-Proliferation, February 22, 2008 Notes:
If you are viewing this table on another site, please see http://www.globalissues.org/article/75/world-military-spending for further details. | |||
| United States |  711 | 48.28% | 1 |
| China | 121.9 | 8.28% | 2 |
| Russia | 70 | 4.75% | 3 |
| United Kingdom | 55.4 | 3.76% | 4 |
| France | 54 | 3.67% | 5 |
| Japan | 41.1 | 2.79% | 6 |
| Germany | 37.8 | 2.57% | 7 |
| Italy | 30.6 | 2.08% | 8 |
| Saudi Arabia | 29.5 | 2.00% | 9 |
| South Korea | 24.6 | 1.67% | 10 |
| India | 22.4 | 1.52% | 11 |
| Australia | 17.2 | 1.17% | 12 |
| Brazil | 16.2 | 1.10% | 13 |
| Canada | 15 | 1.02% | 14 |
| Spain | 14.4 | 0.98% | 15 |
| Turkey | 11.6 | 0.79% | 16 |
| Israel | 11 | 0.75% | 17 |
| Netherlands | 9.9 | 0.67% | 18 |
| United Arab Emirates | 9.5 | 0.65% | 19 |
| Taiwan | 7.7 | 0.52% | 20 |
| Greece | 7.3 | 0.50% | 21 |
| Iran | 7.2 | 0.49% | 22 |
| Myanmar | 6.9 | 0.47% | 23 |
| Singapore | 6.3 | 0.43% | 24 |
| Poland | 6.2 | 0.42% | 25 |
| Sweden | 5.8 | 0.39% | 26 |
| Colombia | 5.4 | 0.37% | 27 |
| Chile | 4.7 | 0.32% | 28 |
| Belgium | 4.4 | 0.30% | 29 |
| Egypt | 4.3 | 0.29% | 30 |
| Pakistan | 4.2 | 0.29% | 31 |
| Denmark | 3.9 | 0.26% | 32 |
| Indonesia | 3.6 | 0.24% | 33 |
| Switzerland | 3.5 | 0.24% | 34 |
| Kuwait | 3.5 | 0.24% | 35 |
| South Africa | 3.5 | 0.24% | 36 |
| Oman | 3.3 | 0.22% | 37 |
| Malaysia | 3.2 | 0.22% | 38 |
| Mexico | 3.2 | 0.22% | 39 |
| Portugal | 3.1 | 0.21% | 40 |
| Algeria | 3.1 | 0.21% | 41 |
| Finland | 2.8 | 0.19% | 42 |
| Austria | 2.6 | 0.18% | 43 |
| Venezuela | 2.6 | 0.18% | 44 |
| Czech Republic | 2.5 | 0.17% | 45 |
| Romania | 2.3 | 0.16% | 46 |
| Qatar | 2.3 | 0.16% | 47 |
| Thailand | 2.3 | 0.16% | 48 |
| Morocco | 2.2 | 0.15% | 49 |
| Argentina | 1.9 | 0.13% | 50 |
| Ukraine | 1.7 | 0.12% | 51 |
| Cuba | 1.7 | 0.12% | 52 |
| Angola | 1.6 | 0.11% | 53 |
| New Zealand | 1.5 | 0.10% | 54 |
| Hungary | 1.3 | 0.09% | 55 |
| Ireland | 1.1 | 0.07% | 56 |
| Jordan | 1.1 | 0.07% | 57 |
| Peru | 1.1 | 0.07% | 58 |
| North Korea | n/a | n/a | 59 |
| Global Total (not all countries shown): 1,472.7 | 100% | n/a | |
Why does the US number seem so high when the budget announced $517.9 for the Department of Defense?
Unfortunately, the budget numbers can be a bit confusing. For example, the Fiscal Year budget requests for US military spending do not include combat figures (which are supplemental requests that Congress approves separately). The budget for nuclear weapons falls under the Department of Energy, and for the 2009 request, was about $29 billion.
The cost of war (Iraq and Afghanistan) is estimated to be about $170 billion for the 2009 spending alone. Christopher Hellman and Travis Sharp also discuss the US fiscal year 2009 Pentagon spending request and note that "Congress has already approved nearly $700 billion in supplemental funding for operations in Iraq and Afghanistan and an additional $126 billion in FY'08 war funding is still pending before the House and Senate."
Furthermore, other costs such as care for veterans, health care, military training/aid, secret operations, may fall under other departments or be counted separately.
The frustration of confusing numbers seemed to hit a raw nerve for the Center for Defense Information, concluding
The articles that newspapers all over the country publish today will be filled with [military spending] numbers to the first decimal point; they will seem precise. Few of them will be accurate; many will be incomplete, some will be both. Worse, few of us will be able to tell what numbers are too high, which are too low, and which are so riddled with gimmicks to make them lose real meaning.
— Winslow T. Wheeler, What Do the Pentagon's Numbers Really Mean? The Chaos in America's Vast Security Budget, Center for Defense Information, February 4, 2008
Commenting on the earlier data, Chris Hellman, noted that when adjusted for inflation the request for 2007 together with that needed for nuclear weapons the 2007 spending request exceeds the average amount spent by the Pentagon during the Cold War, for a military that is one-third smaller than it was just over a decade ago.
Generally, compared to Cold War levels, the amount of military spending and expenditure in most nations has been reduced. For example, global military spending declined from $1.2 trillion in 1985 to $809 billion in 1998, though since 2005 has risen to over $1 trillion again. The United States' spending, up to 2009 requests may have be reduced compared to the Cold War era but is still close to Cold War levels.
Supporters of America's high military expenditure often argue that using raw dollars is not a fair measure, but that instead it should be per capita or as percentage of Gross Domestic Product (GDP), and even then the spending numbers miss out the fact that US provides global stability with its high spending and allows other nations to avoid such high spending. However, as researcher Chris Hellman notes,
Linking military spending to the GDP is an argument frequently made by supporters of higher military budgets. Comparing military spending (or any other spending for that matter) to the GDP tells you how large a burden such spending puts on the US economy, but it tells you nothing about the burden a $440 billion military budget puts on U.S. taxpayers. Our economy may be able to bear higher military spending, but the question today is whether current military spending levels are necessary and whether these funds are going towards the proper priorities. Further, such comparisons are only made when the economy is healthy. It is unlikely that those arguing that military spending should be a certain portion of GDP would continue to make this case if the economy suddenly weakened, thus requiring dramatic cuts in the military.
— Chris Hellman, The Runaway Military Budget: An Analysis
In regards to the high spending allowing other nations to spend less, that is often part of a supportive theory of the global hegemon being good for the world. Granted, other nations in such a position would likely want to be able to dominate as much of the world as possible, as past empires have throughout history.
However, whether this global hegemony and stability actually means positive stability, peace and prosperity for the entire world (or most of it) is subjective. That is, certainly the hegemony at the time, and its allies would benefit from the stability, relative peace and prosperity for themselves, but often ignored in this is whether the policies pursued for their advantages breeds contempt elsewhere (in the modern era that may equate to "anti-Americanism", resorting to terrorism and other forms of hatred.)
As noted in other parts of this site, unfortunately more powerful countries have also pursued policies that have contributed to more poverty, and at times even overthrown fledgling democracies in favor of dictatorships or more malleable democracies. (Osama Bin Laden, for example, was part of an enormous Islamic militancy encouraged and trained by the US to help fight the Soviet Union. Of course, these extremists are all too happy to take credit for fighting off the Soviets in Afghanistan, never acknowledging how it could not have been done without their so-called "great satan" friend-turned-enemy!)
So the global good hegemon theory may help justify high spending and even stability for a number of other countries, but it does not necessarily apply to the whole world. To be fair, this criticism can also be a bit simplistic especially if an empire finds itself against a competitor with similar ambitions, that risks polarizing the world, and answers are likely difficult to find.
But even for the large US economy, the high military spending may not be sustainable in the long term. Noting trends in military spending, SIPRI added that the massive increase in US military spending has been one of the factors contributing to the deterioration of the US economy since 2001. SIPRI continues that, "In addition to its direct impact of high military expenditure, there are also indirect and more long-term effects. According to one study taking these factors into account, the overall past and future costs until year 2016 to the USA for the war in Iraq have been estimated to $2.267 trillion."
In Context: US military budget vs. other US priorities
The peace lobby, the Friends Committee on National Legislation, calculates for Fiscal Year 2009 that the majority of US tax payer's money goes towards war:
As a pie chart
Furthermore, "national defense" category of federal spending is typically just over half of the United States discretionary budget (the money the President/Administration and Congress have direct control over, and must decide and act to spend each year. This is different to mandatory spending, the money that is spent in compliance with existing laws, such as social security benefits, medicare, paying the interest on the national debt and so on). For recent years here is how military, education and health budgets (the top 3) have fared:
| Discretionary budgets in $ (billions) and percentages | |||||||
| Year | Total ($) | Defense ($) | Defense (%) | Education ($) | Education (%) | Health ($) | Health (%) |
|---|---|---|---|---|---|---|---|
Sources and notes
| |||||||
| 2009 | 997 | 541 | 54 | 61.9 | 6.2 | 52.7 | 5.3 |
| 2008 | 930 | 481.4 | 51.8 | 58.6 | 6.3 | 52.3 | 5.6 |
| 2007 | 873 | 460 | 52.7 | 56.8 | 6.5 | 53.1 | 6.1 |
| 2006 | 840.5 | 438.8 | 52 | 58.4 | 6.9 | 51 | 6.1 |
| 2005 | 820 | 421 | 51 | 60 | 7 | 51 | 6.2 |
| 2004 | 782 | 399 | 51 | 55 | 7 | 49 | 6.3 |
| 2003 | 767 | 396 | 51.6 | 52 | 6.8 | 49 | 6.4 |
For those hoping the world can decrease its military spending, SIPRI warns that "while the invasion [of Iraq] may have served as warning to other states with weapons of mass destruction, it could have the reverse effect in that some states may see an increase in arsenals as the only way to prevent a forced regime change."
In this new era, traditional military threats to the USA are fairly remote. All of their enemies, former enemies and even allies do not pose a military threat to the United States. For a while now, critics of large military spending have pointed out that most likely forms of threat to the United States would be through terrorist actions, rather than conventional warfare, and that the spending is still geared towards Cold War-type scenarios and other such conventional confrontations.
[T]he lion's share of this money is not spent by the Pentagon on protecting American citizens. It goes to supporting U.S. military activities, including interventions, throughout the world. Were this budget and the organization it finances called the "Military Department," then attitudes might be quite different. Americans are willing to pay for defense, but they would probably be much less willing to spend billions of dollars if the money were labeled "Foreign Military Operations."
— The Billions For "Defense" Jeopardize Our Safety, Center For Defense Information, March 9, 2000
And, of course, this will come from American tax payer money. Many studies and polls show that military spending is one of the last things on the minds of American people.
But it is not just the U.S. military spending. In fact, as Jan Oberg argues, western militarism often overlaps with civilian functions affecting attitudes to militarism in general. As a result, when revelations come out that some Western militaries may have trained dictators and human rights violators, the justification given may be surprising, which we look at in the next page.
Where next?
Related articles
- The Arms Trade is Big Business
- World Military Spending
- Training Human Rights Violators
- Military Propaganda for Arms Sales
- Small Arms—they cause 90% of civilian casualties
- A Code of Conduct for Arms Sales
- Landmines
- Arms Trade Links for more information
- The US Nuclear Superpower
- North Korea and Nuclear Weapons
--
Palash Biswas
Pl Read:
http://nandigramunited.blogspot.com/
No comments:
Post a Comment