Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Is Crude Oil Firmly on the Upswing Now? - 20th Feb 20
What Can Stop the Stocks Bull – Or At Least, Make It Pause? - 20th Feb 20
Trump and Economic News That Drive Gold, Not Just Coronavirus - 20th Feb 20
Coronavirus COVID19 UK Infection Prevention, Boosting Immune Systems, Birmingham, Sheffield - 20th Feb 20
Silver’s Valuable Insights Into the Upcoming PMs Rally - 20th Feb 20
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From Overclockers.co.uk - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20
The Growing Weaponization of Space - 14th Feb 20
Will the 2020s Be Good or Bad for the Gold Market? - 14th Feb 20
Predictive Modeling Suggests Gold Price Will Break Above $1650 Within 15~30 Days - 14th Feb 20
UK Coronavirus COVID-19 Infections and Deaths Trend Forecast 2020 - 14th Feb 20
Coronavirus, Powell and Gold - 14th Feb 20
How the Corona Virus is Affecting Global Stock Markets - 14th Feb 20
British Pound GBP Trend and Elliott Wave Analysis - 13th Feb 20
Owning and Driving a Land Rover Discovery Sport in 2020 - 2 YEAR Review - 13th Feb 20
Shipping Rates Plunge, Commodities and Stocks May Follow - 13th Feb 20
Powell says Fed will aggressively use QE to fight next recession - 13th Feb 20
PALLADIUM - THIS Is What a Run on the Bank for Precious Metals Looks Like… - 13th Feb 20
Bitcoin: "Is it too late to get in?" Get Answers Now - 13th Feb 20
China Coronavirus Infections Soar by 1/3rd to 60,000, Deaths Jump to 1,367 - 13th Feb 20
Crude Oil Price Action – Like a Coiled Spring Already? - 13th Feb 20
China Under Reporting Coronavirus COVID-19 Infections, Africa and South America Hidden Outbreaks - 12th Feb 20
Will USD X Decline About to Trigger Precious Metals Rally - 12th Feb 20
Copper Market is a Coiled Spring - 12th Feb 20
Dow Theory Stock Market Warning from the Utilities Index - 12th Feb 20
How to Get Virgin Media Engineers to FIX Hub 3.0 Problems and NOT BS Customers - 12th Feb 20
China Under Reporting Coronavirus COVID-19 Infections by 66% Due to Capacity Constraints - 12th Feb 20
Is Coronavirus the Black Swan That Takes Gold To-Da-Moon? - 12th Feb 20
Stock Market 2020 – A Close Look At What To Expect - 12th Feb 20
IBM AI Mega-trend Tech Stocks Investing 2020 - 11th Feb 20
The US Dollar’s Subtle Message for Gold - 11th Feb 20
What All To Do Before Opening A Bank Account For Your Business - 11th Feb 20
How and When to Enter Day Trades & Swing Trade For Maximum Gains - 11th Feb 20
The Great Stock Market Dichotomy - 11th Feb 20
Stock Market Sector Rotation Should Peak Within 60+ Days – Part II - 11th Feb 20
CoronaVirus Pandemic Stocks Bear Market Risk 2020? - Video - 11th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Who Are ASEAN’s Biggest Military Spenders, Really? 

Politics / Asian Economies May 16, 2017 - 02:58 PM GMT

By: Dan_Steinbock

Politics The conventional military narratives highlight aggregate expenditures and downplay per capita spending. Realities are more nuanced, both globally and in Southeast Asia.

The conventional narrative is that China has become assertive, while the West is ignoring its defense needs. According to SIPRI research, in the past decade military spending in China and Russia increased 118% and 87%, respectively, while US spending plunged almost 5%.  


Yet, the list of top-10 military spenders includes the US ($611 billion), China ($215 billion), Russia ($69 billion), followed by Saudi Arabia, India, major EU economies, Japan and South Korea. Together, they account for three-fourths of the total. Washington spends more dollars a year on its military than the next seven biggest spenders combined - which penalizes US living standards and stability abroad.

Moreover, the US is escalating. The Trump administration is planning a huge Reagan-style rearmament and requesting $54 billion; an almost 10% increase in a single year – even as its public debt amounts to $20 trillion (105% of US GDP).

Indeed, military spending should also be assessed in per capita terms. In this view, Saudi Arabia and the US lead, with $2,000 and $1,900 per person, respectively. The two are followed by Europeans, South Korea, Russia and Japan. In contrast, China and India come last (with just 8% and 2% of the US level, respectively).

In the past decade, increases in military budget in per capita terms have soared in Saudi Arabia (40%), but been slower in China and India (less than 15% each); and even less in Russia (6%). Moreover, in the past decade, per capita incomes in China and India increased strongly (10.8% and 8%, respectively). In both, military spending has increased faster but after a very low starting point.

There is a deep gap between current realities and perceptions of military spending.  ASEAN nations are not an exception to the rule.

ASEAN’s military spenders

In Southeast Asia, the largest military spenders are the tiny Singapore ($10 billion) and Indonesia ($8.2 billion), followed by Thailand and Vietnam (about $5-6 billion), and Malaysia and Philippines (around $4 billion) (Figure 1).

The per capita picture is very different. In this view, Singapore ($1,750) and Brunei ($940) are ASEAN’s big spenders, far ahead of Malaysia ($136).  What this means is that, in per capita terms, Singaporeans spend on average 46 times more than the Filipinos in their military.  In the past, Myanmar puts almost as much money into the military as Vietnam ($53) and more than the Philippines ($38), whereas Indonesia is a more moderate player ($31) (Figure 2).

So if Singapore is ASEAN’s Uncle Sam in per capita big spending, then Brunei is comparable to France, Malaysia to China and Philippines to India.

In effect, until 2010, the Philippines’ military expenditures decreased two decades from 1.6% to 0.8% as share of GDP. During the Aquino era, Washington initiated its pivot to Asia and Manila executed its pivot toward the US. In the process, the Philippine military expenditures soared to almost 1.4% of GDP. In this view geopolitics rather than economic development motivated the Aquino priorities.

Economic development or military needs

If per capita incomes rise fast, then relative increases in military budgets are to be expected, and vice versa. In the past decade, per capita incomes rose by 4.2% in Singapore; but military expenditures even faster. In Brunei, the gap was worse as per capita incomes shrank by more than 0.4%, but military spending grew by 2.8%.

In per capita terms, such gaps between incomes and military spending are not sustainable over time. And as newly-industrialized economies are now stagnating and high prices do not favor oil exporters, policymakers must consider reassessments in the future or prepare for popular resentment.

Indeed, where gains in per capita incomes exceed those in military expenditures, economic development tends to prevail over defense. In Southeast Asia, these countries include Malaysia, Myanmar and Laos.

Conversely, where gains in per capita military spending exceed those in per capita incomes, defense needs tend to prevail over economic development.  In addition to Singapore and Brunei, these countries include Cambodia, Indonesia, and Philippines in the past decade.

With scarce resources, there are always priorities. 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.

If ASEAN countries that still have relatively low per capita incomes seek rapid economic development, excessive military spending 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 favor geopolitics.

Dr. Dan Steinbock is an internationally recognised expert of the nascent multipolar world. He is the CEO of Difference Group and has served as Research Director at the India, China and America Institute (USA) and visiting fellow at the Shanghai Institutes for International Studies (China) and the EU Centre (Singapore). For more, see www.differencegroup.net   

© 2017 Copyright Dan Steinbock - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules