By Dan Steinbock
The conventional narrative concerning global military expenditures is simple: China has become militarily assertive, while the West has ignored its defence needs. The truth, however, is far more nuanced. According to research completed by the Stockholm International Peace Research Institute (SIPRI), in the past decade, military spending in China and Russia increased by 118% and 87% respectively. In contrast, US spending plunged almost 5%.
However, using the traditional metric of aggregate expenditure, the list of top-10 military spenders is led by the US at $611 billion. The US is followed by China at $215 billion and Russia at $69 billion, then by Saudi Arabia, India, major EU economies, Japan, and South Korea. Washington spends more dollars a year on its military than the next seven biggest spenders combined.
It seems there is a dichotomy between perception and reality in global military expenditures. So how does Southeast Asia compare? In order to judge this, alternate forms of quantifying military spending are needed.
Using a different metric
Military spending should also be assessed in per capita terms. With this view, Saudi Arabia takes the global lead, spending $2,000 per person. The US follows closely with $1,900. They are followed by Europeans, South Korea, Russia, and Japan. Here, China and India come last, with only 8% and 2% of the US level, respectively.
In the past decade, per capita increases in military budget have soared in Saudi Arabia (40% growth), but have been slower in China and India (less than 15% growth each). During the same period, per capita incomes in China and India have increased strongly (10.8% and 8%, respectively). This indicates wider repercussions of military expenditures globally. ASEAN nations are no exception to the rule.
ASEAN’s military spenders
The Association of Southeast Asian Nations (ASEAN) was established in 1967 with the goals of promoting economic growth, collaboration, peace, and stability in Southeast Asia. In ASEAN, the largest aggregate military spenders are Singapore at $10 billion, and Indonesia at $8.2 billion. They are followed by Thailand and Vietnam at about $5-6 billion, and then by Malaysia and the Philippines around $4 billion.
However, the per capita picture is very different. In this view, Singapore remains the largest spender with $1,750 per capita. It is followed by Brunei with a per capita spending of $940. Next, after a huge jump is Malaysia’s $136, the Philippines $38, and the Philippine’s $38. If Singapore is ASEAN’s Uncle Sam in per capita big spending, then Brunei is comparable to France, Malaysia to China, and the Philippines to India.
The trade-off in military spending and economic development
If per capita incomes rise quickly, then relative increases in military budgets are to be expected, and vice versa. In the past decade, per capita income rose by 4.2% in Singapore, but military expenditures rose even more. In Brunei, the gap was bigger; per capita income shrank by more than 0.4%, but military spending grew by 2.8%.
Indeed, where gains in per capita incomes exceed those in military expenditures, economic development tends to prevail over defence needs. In Southeast Asia, these countries include Malaysia, Myanmar and Laos. Conversely, where gains in per capita military spending exceed those in per capita incomes, defence needs tend to prevail over economic development. In addition to Singapore and Brunei, these countries include Cambodia, Indonesia, and the Philippines in the past decade.
The path towards growth
In per capita terms, such gaps between incomes and military spending are not sustainable over time. If nations truly seek economic development, they must often make difficult choices. The more countries focus on economic growth and the less they exhaust monies in military spending, the more they may enjoy rapid economic growth – and vice versa.
With scarce resources, there are always priorities. Newly industrialised economies are now stagnating and high prices do not favour oil exporters. Policymakers must reassess strategies for the future or prepare for popular resentment.
If ASEAN countries that still have relatively low per capita incomes seek rapid economic development, excessive military spending is not the answer. If anything, it is the best way not to achieve the targeted economic objectives and an even better way to undermine social goals. Living standards seldom rise fast in countries that favour geopolitics.
Dr Steinbock is the founder of the Difference Group and has served as the research director at the India, China, and America Institute in the US, and as a visiting fellow at the Shanghai Institutes for International Studies in China and the EU Center in Singapore.
The original version of this article was released by The Manila Times on May 15, 2017
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