The world is undergoing a change. Global military spending has started to rise in real terms for the first time since the United States began its withdrawal of troops from wars in Iraq and Afghanistan, according to the Stockholm International Peace Research Institute. The Institute's April report stated that global defense budgets rose 1 percent to $1.68 trillion in 2015, about 2.3 percent of the world's gross domestic product. The US was the biggest spender at $596 billion, down 2.4 percent from 2014, and China increased its output by 7.4 percent to $215 billion. The many reasons for the shift include key geopolitical controversies; the shift reflects the realities and anxieties of a more complex world.
The fears of Western nations concerning Russia's multi-year-long aggression in Eastern Europe and the Middle East are increasingly growing. Both Russia and Eastern European countries have ramped up defense spending from 2014 to 2015 after Russia's 2014 invasion of Crimea and unrest in Ukraine. Eastern European countries remain wary of a Russian advance into North Atlantic Treaty Organization (NATO) territory. From 2014 to 2015, Russia increased military spending by 7.5 percent, Poland by 21.8 percent, Romania by 10.7 percent, Latvia by 13.7 percent, and Lithuania by a whopping 32.7 percent. Russia spent the largest total amount in the region on defense at $66.4 billion. As the geopolitical climate around Eastern Europe and the Middle East, especially Syria and Turkey continues to be anxious, Russia and neighboring nations could very well ramp up military spending in the years to come.
The Obama and Xi administrations of the US and People's Republic of China have pivoted toward the Pacific Ocean and South China Sea in both an economic and military sense. In the last few years, tension has increased between China and Japan, the US's military ally by treaty, over Japan's proposed constitutional reinterpretation to allow it to exercise collective self-defense and ownership of the Senkaku or Diaoyu Islands. The US and China have also been at odds over territory in the South China Sea, specifically Chinese plans to build artificial islands as part of extending borders and influence. Chinese ambitions have spurred neighboring countries as well. From 2014 to 2015, China increased military spending by 7.4 percent, Vietnam by 7.6 percent, Malaysia by 7.7 percent, Indonesia by 16.5 percent, and the Philippines by a whopping 25.5 percent. China spent the largest total amount in the region on defense at $214.8 billion. The Trans-Pacific Partnership's exclusion of China, China's foreign policy vision, and continual disputes between China and Japan make even more military spending likely.
The US will remain the world's biggest spender on military as its foreign policy shifts towards an Asian emphasis and faces greater challenges with ISIL and Syria in the Middle East. As European and NATO countries that have long eschewed big military budgets ramp up spending in the wake of the Paris and Brussels terror attacks, the world could enter a new era of contention. Increased military spending will benefit international defense and weapons contractors including Lockheed Martin
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