In a recent study released by the Stockholm International Peace Research Institute it describes the dynamic growth being experienced by the defense industry. The five largest spenders were identified as the United States, China, India, the United Kingdom and Russia. These countries represent 62% of the entire spend. It is a common practice to compare the amount being spent in a way that supports one’s political view. And although this does create a prospective it also conveys a false equivalency.
For example, the United States, the largest spender of defense dollar, has a growing emphasis on research and development and this is done primarily to protect the warfighter. Whereas the Russians have an emphasis on munitions and artillery to replace what has been lost. The U.S. Government is spending a budgeted $880 billion on defense this year, with an additional $300+
Billion coming from foreign governments seeking U.S. made equipment. The Russians have a defense budget of ~$176 billion that has double over the last 12 months. They amount they export is unclear, but countries such as North Korea and India have certain ties to their weapons platforms.
It is common to use benchmarks like percentage of GDP, or country-to-country comparison, but these are too simplistic in their approach. Japan and Russia have both doubled their defense spending, but for entirely different reasons. The Japanese are reacting to the threat in the North China Sea and the Russian’s are hoping not to lose a war. Beyond this there are several underlying issues such as the falling value of the Ruble or the inflationary trends around the world.
In recent years the U.S. defense industry has benefited hugely from foreign interest in our advanced systems. We have seen countries like Poland purchasing quantities of our Abrams M1A2 tanks or Japan purchasing squadrons for F-35 fighter planes. We have a technology exchange occurring with Australia to build nuclear powered submarines which will result in hundreds of billions of dollars to the United States. Total exports are expected rise dynamically from the current $300 billion annually. Yet this is not easily deciphered or understand due to the complexity of the sales. One such example is the annual multi-billion-dollar U.S. subsidy conveyed to Israel for advance systems.
These disparities and others open the door to strategic questions that have challenged traditional thinking. Considerations regarding the vulnerability of a multi-billion aircraft carrier to a swarm of inexpensive drones. Or the practicality of using a HIMAR missile at the cost of $115,000 each to defend against an Iranian-made drone with an engine from a weed whacker. Recently, numerous allies have been found to be selling aging equipment off to the war effort and re-filling their stocks with more modern solutions.
Although defense spending continues to be debated frequently on the evening news, the complexities of a multi-trillion-dollar market is nearly impossible to delineate down to a yes or no answer. In weighing the alternatives, the use of the dollar as a unit of measurement fails to consider how different countries might emphasize human life. Or how a sense of security is obtained when you know a contended border is protected by advanced sensor arrays. Even the opaquer knowledge of knowing that an ally is dependent U.S. technology in their own protection. The result is that only through good leadership and a broad consideration of all issues that defense spending touches can the growing spending be determined as good or bad.
Numbers to consider:
1. The Gross Domestic Product of the World for 2023 is $112.6 Trillion.
2. The Gross Domestic Product of the United States for 2023 is $25.5 Trillion.
3. The Gross Amount the world will spend on defense for 2023 is $2.3 Trillion.
4. The US budget for defense spending is $880 Billion.
5. The US will Export more than $300 billion in defense weapons in 2023.
6. The amount of Aid as of July 2023 sent to Ukraine is $75 billion.