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Global Military Spending ‘Unaffected By Recession’

Russia is reportedly dropping plans to update much of its military equipment.

Russia is reportedly dropping plans to update much of its military equipment.

(RFE/RL) -- The International Institute for Strategic Studies (IISS), a leading British think tank, says the total amount of money spent on world defense budgets rose to $1.55 trillion in 2008, and likely continued to climb further last year.

Global defense budgets represented $1.3 trillion in 2006.

The figures are included in the 490-page Military Balance 2010 report, the London-based think tank’s annual assessment of the military capabilities and defense economics of 170 countries worldwide.

In general, countries accounting for the biggest share of global military spending, including China, the United States, France, and Japan, have increased spending or kept their budgets unchanged in the past 18 months.

IISS defense economist Mark Stoker says that's the reason why the economic crisis hasn't had a dramatic impact on global defense spending.

"Certainly we've seen a stagnation [in military spending] in many countries and something of a cut in various other countries, [but] what's really keeping the global totals at fairly high levels is the fact that big-spending nations such as the U.S., China, India, to an extent Brazil -- most of those countries are carrying on spending more on defense as each year goes by," Stoker says.

Those increases, Stoker notes, may not be as significant as the figures suggest because they reflect the effects of the fluctuating dollar.

Calculated in terms of its proportion to global GDP, defense spending has remained steady in the past few years -- 2.56 percent of GDP in 2008, compared to 2.6 percent in 2004.

Spending Down In Russia

The impact of the financial crisis on defense and security spending has varied across regions and countries.

Russia was the only leading country making a reduction in spending.

The report says Russia's military ambitions have been hit hard by a 7.5 percent GDP contraction in 2009, and that Moscow’s plan to update military equipment has "effectively been abandoned."

Asian states are surging ahead militarily, with both India and China maintaining their recent trend of double-digit increases in defense spending.

The report noted that India boosted defense spending by 21 percent in 2009 following the November, 2008, Mumbai attacks.

Other countries in the region such as Australia, Indonesia, and Singapore have also posted increases.

Most countries in the Middle East also increased their defense budgets in 2009, if only modestly.

Stoker says the rate of increase in defense spending around the world is expected to slow in the next few years after a decade of significant growth.

"I think that that rate of increase is going to tail off in coming years,” Stoker says. “There will still be countries such as India, China, Brazil...who will continue to increase spending probably at fairly robust rates. I think that other countries, though, notably the U.S. and most of the larger members of NATO, just don't have the flexibility to increase spending."

In the United States, after defense spending almost doubled under the administration of former President George W. Bush, the report says a budget deficit of 12.5 percent in 2009 "marked the end” of this phase of steeply rising defense spending.

Massive stimulus packages contributed to an increase in budget deficits in Europe. And when the time comes to redress these fiscal imbalances, the report says “discretionary spending will come under considerable pressure and defense is likely to suffer.”

Among European NATO members, only Norway and Denmark are likely to increase defense spending in 2010, the report says.

Meanwhile, most other countries will do well to increase budgets in line with inflation or match existing budget levels.