5. Military Expenditure*

Elisabeth Sköns, Evamaria Loose-Weintraub, Wuyi Omitoogun and Petter Stålenheim

Military expenditure increased in many regions during 1999. This came after a long period of declining military spending that largely coincided with the post-cold war period. Total world military expenditure increased by 2.1% in real terms in 1999 and amounted to roughly $780 billion. While this is almost one-third less than 10 years earlier, it still represents a significant share of world economic resources: 2.6% of world gross national product (GNP).
The rise in military expenditure in 1999 is primarily the result of increases in major spender countries, including the USA, France, Russia and China. Their military expenditure has a great impact on the world total, since they account for a major share of it—the USA 36%, France 7%, and Russia and China 3% each. Russian military expenditure increased sharply in 1999, by an estimated 24% in real terms. In a longer-term perspective, the level of Russian military expenditure in 1999 was 53% lower than in 1992, while most other countries have reduced their military expenditure by less than one-third over the entire decade of the 1990s.
There have also been significant increases in other regions, including Africa and South Asia, and in other parts of Western Europe. The countries with the heaviest economic burden of military expenditure are generally poor countries, involved in armed conflict and/or located in areas of tension. In many of the countries at war, official military expenditure figures significantly understate the economic burden of military activities.

• Appendix 5A contains tables of military expenditure in local currency and constant dollars, and as a share of gross domestic product (GDP) for the period 1990–99.

• Appendix 5B shows the military expenditure of NATO countries on personnel and equipment.

• Appendix 5C explains the sources and methods for the data collection.

• Appendix 5D, by Wuyi Omitoogun, examines military expenditure in Africa.

Military expenditure in Africa has been increasing since 1997 after a relatively long period of decline. The increase is due primarily to the involvement of many countries of the region in armed conflict, either directly or indirectly. The costs and methods of financing armed conflict vary but usually involve legal or illegal appropriation of national resources outside the official defence budget, making it difficult to accurately report the amount of economic resources committed to military activities. While African military expenditure represents a small share of the world total, it constitutes a heavy economic burden in many African countries where social needs are competing for scarce economic resources.