The Russian full-scale invasion of Ukraine has triggered the beginning of a new round of the global arms race. This invasion has disproved the decades-long belief that nuclear balance and the strength of the international community had reduced the risks of a major conventional war. It simultaneously demonstrated that the majority of the world's armies are not prepared for such wars, which rapidly consume large amounts of weapons and ammunition. Moreover, the conflict has shown that in the event of a nuclear power initiating a conventional war against a neighbour, its nuclear-armed allies may refrain from active participation in the conflict, fearing nuclear escalation. Therefore, we should count on ourselves first and foremost, at least initially, which means there is a need to arm.
Overall, global military spending in 2023 increased by 6.8% compared to the previous year, totaling $2.44 trillion, as calculated in the annual review of military expenditures by the Stockholm International Peace Research Institute (SIPRI). Although defence spending has been increasing for the last nine years, this year's growth was the highest since 2009. Defence expenditures accounted for 2.3% of global GDP, or $306 per capita, which is the highest figure since 1990.
The top five leaders in defence spending in 2023 (as in the previous year) were the USA, China, Russia, India, and Saudi Arabia. The USA spent $916 billion on defence, which represents 38% of all global expenditures and is three times higher than the expenditures of China, which holds second place in the ranking with $296 billion according to SIPRI estimates. Together, these two countries accounted for exactly half of the world's military expenditures, clearly indicating who currently aspires to the role of global powers.
Russia, ranking third, increased its defence budget by about a quarter over the year to $109 billion (5.9% of GDP and 16% of total government expenditure), marking the highest level of its military spending since the dissolution of the USSR. Actual figures may be even higher, as the opacity of Russian financial information has notably increased since the start of the war, the SIPRI experts note. Notably, despite the fact that Russia is in a state of war and mobilising its resources, its military spending is still almost three times lower than that of China.
Altogether, the top 10 countries on the SIPRI list accounted for 74% of all defence spending globally. Ukraine saw the most significant increase in military expenditures (up to $64.8 billion, a 51% increase). The share of defence spending in the budget grew for nine out of the top ten countries on the list.
In the world's largest military alliance, NATO, defence spending rose 5.2% year-on-year and 19% over 10 years to $1341 billion, with European NATO members accounting for 28% of this amount and the highest in the past 10 years. European defence budgets rose to $588 billion, up 16% over 2022. Eastern European countries' military spending saw the most drastic increase, up 31% over the year and 118% over 10 years, to $181 billion. The leaders in defence spending growth were Poland (up 75%) and Finland, which became the 31st member of NATO in April 2023 (up 54% for the year, to $7.3 billion). Helsinki tripled its expenditures on arms purchases last year, acquiring F-35 fighter jets, air defence systems, and replacing weapons that had been sent to Ukraine. At the same time, defence spending in Central and Western Europe increased by only 10%, and in some European countries military budgets even decreased: for example, in Greece (by 17%), Italy (by 5.9%) and Romania (by 4.7%).
However, Russia is not the only culprit behind the new arms race. It is also driven by the ongoing dynamic growth in China's military expenditures, North Korea reaching the nuclear threshold, and Iran's build-up of arms and foreign policy aggression.
The main catalyst for the arms race in Asia is China and to a lesser extent Korea. Military spending in Asia and Oceania reached $595 billion in 2023, increasing by 4.4% over the year, with Beijing increasing its expenditure by 6%. China's military spending has been growing consistently for 29 years, the longest period of uninterrupted growth for a military budget in the world. However, against the backdrop of slowing Chinese economic growth, the growth rate of military spending has also declined. While Beijing's defence spending increased by about 150% in each period from 1994 to 2003 and from 2004 to 2013, it increased by only 60% between 2014 and 2023.
Nevertheless, China accounts for 12% of global and 50% of regional defence expenditures, prompting other countries in the region to respond to Beijing's growing military power, according to the SIPRI experts. For example, India's defence spending grew by 4.2% over the year to 83.6 billion. In Japan, the defence budget grew by 11% over the year, reaching $50.2 billion, which was the most significant increase in defence spending in the country since 1972. In 2023-2027, as part of the largest military build-up programme since the end of World War II, Tokyo intends to spend $310 billion on strengthening its Air Force, Navy, as well as on the purchase of long-range missiles and other means for counterattacks. Military experts tend to view this as preparation for a possible escalation around Taiwan. Last year, Taiwan increased its defence spending by 11% to $16.6 billion and also established several off-budget funds to purchase F-16 fighter jets and naval systems. Overall, defence spending in East Asian countries grew by 6.2% over the year to $411 billion.
In the Middle East, military spending increased by 9% to $200 billion, the largest annual growth in a decade. The largest increases were seen in Saudi Arabia (up 4.3% for the year to $75.8 billion, or 7.1% of GDP), Turkey (up 37% to $15.8 billion), and Israel (up 24% to $27.5 billion). In Israel, towards the end of the year, monthly military spending nearly tripled to $4.7 billion due to the start of operations in Gaza. Iran almost did not increase its defence spending over the year and ranks fourth in the Middle East at $10.3 billion.
In general, it can be said that defence spending grew most intensively in the countries that were in a state of armed conflict this year — Ukraine (+51%), Russia (+24%) and Israel (+24%). Or those who suddenly found themselves in the orbit of a possible conflict, such as Poland (+75%), Finland (+51%) and Japan (+11%). The high conflict environment also defines the militarisation of Africa. Although the African continent accounts for just over 2% of global defence spending, it is among the leaders in terms of militarisation rates—the continent's military expenditures grew by 22% (to $51.6 billion). For example, in the Democratic Republic of the Congo, amid tensions with Rwanda and clashes with non-state armed groups, defence spending increased by 105%, and in South Sudan, due to the escalation of internal violence and the civil war in neighbouring Sudan, it increased by 78%.