4.2 Top Defense Contractors – U.S. Pretax Profits & Federal Income Taxes

4.4 “Balance” of Global Military Expenditures In 2010

4.5 USA President’s Proposed Discretionary Spending (FY 2013)

4.6 Department of Everything

4.7 What If Top Military Spenders Had Adopted ‘the 5% Threshold Rule’ retrospectively (2001-2010)

4.8 The (In)Security Paradox

4.9 Top Military Spender (per Capita) 2010

4.10 Opportunity Costs: Military Spending and the UN’s Development Agenda

4.11 Nuclear Proliferation

4.12 Arms Trade

4.12.1 Arms export agreements

4.12.2 Changes in Regional Arms Export Agreements between 2 Periods

4.12.3 Top 15 arms exporters 2007-2011

4.12.4 Top 20 arms importers 2007-2011

4.12.5 5 largest arms exporters and their major recipients, 2007–11

4.12.6 5 largest arms importers and their major suppliers, 2007–11

4.13 While Most People Were Hit Hard by the Recession, the Defense Industry Boomed

4.14 The World’s Biggest Defense Contractors (Sales)

4.15 Drone Proliferation

4.16 Better Ways to Create Jobs

4.16.1 Massive Defense Spending Leads to Job Loss

4.16.2 How many jobs does $1 billion buy?

4.17 G20 Countries: Renewable Energy Investment (2009)

4.18 Asian Defence Spending

4 Appendix

4.1 The Real Costs of War

4.2 Top Defense Contractors – U.S. Pretax Profits & Federal Income Taxes

4.3 Lobbying and Federal Contracts

4.4 “Balance” of Global Military Expenditures In 2010

4.5 USA President’s Proposed Discretionary Spending (FY 2013)

4.6 Department of Everything

4.7 What If Top Military Spenders Had Adopted ‘the 5% Threshold Rule’ retrospectively (2001-2010)

4.8 The (In)Security Paradox

by Stephen M. Walt, Foreign Policy, February 11, 2013

… This paradox got me thinking: what would happen if the United States were really insecure? What if we faced a malevolent peer competitor that was larger, more populous, more advanced, more productive, and more powerful than we were? What if our immediate neighbors were both hostile and military capable? What if all of the world’s major powers were united in an alliance against us? What would our foreign and defense policy look like then? Here are a few thoughts.

#1: If the United States were really insecure, it would spend a lot more on defense and raise taxes to pay for it. If the US were really threatened, most Americans would accept diminished living standards and higher taxes in order to afford a more robust defense. You know, like we did in World War II. But because we are in reality very secure today, we don’t spend that much on defense and we think we can still run the world on the cheap.

#2: If the United States were really insecure, you wouldn’t see irresponsible and grandstanding senators acting like buffoons at confirmation hearings. If they did, they’d be rightly condemned as unpatriotic know-nothings who were placing the country at risk by pandering to powerful interest groups. More broadly, a real external threat would focus the national mind and encourage a more responsible bipartisan debate on critical national security questions, instead of the monkey show we often observe these days.

#3: If the United States were really insecure, it would have to make its defense dollars stretch as far as they could. For starters, we’d have a more rational military basing structure, instead of wasting resources just to keep pork-hungry members of Congress happy.

#4: If the United States were really insecure, it wouldn’t wage wars of choice at the drop of a hat. Instead, it would conserve its strength, keep its powder dry, and focus primarily on the biggest or most dangerous challenges. Translation: There’d be a lot less for liberal interventionists to talk about.

#5: If the United States were really insecure, it would be lot more careful in how it chose its allies and would be wary of giving any of them unconditional support. If the United States were really threatened, we’d want capable allies who didn’t free-ride on our benevolence or take actions that got us into trouble with other important nations. And we wouldn’t be all that picky about whether they were democratic or not. The main question would be whether being allied with them made us safer overall. Remember: Washington was allied with Stalinist Russia during World War II and with plenty of unsavory regimes throughout the long Cold War. When you face real threats, you can’t afford to be either too picky or too generous.

#6: If the United were really insecure, we would hold military commanders and foreign policy advisors accountable for their failings and follies. Instead of firing people for sexual misconduct and other peccadillos (however regrettable they might be), we would mostly hold them accountable for their foreign policy performance. And that means serial blunderers like today’s neoconservatives would be marginalized after driving the country into a ditch, and they wouldn’t be treated as respected pundits and they wouldn’t be advising presidential hopefuls. Only a state that is very, very secure can afford to keep listening to people whose have been wrong with such disastrous consistency.

#7: If the United States were really insecure, more academics would be engaged by important policy issues and fewer would spend their time writing obscure articles and books intended for a small number of like-minded navel-gazers. In other words, academic departments would place more value on policy-relevance, because it would be seen as an important way to help the nation deal with serious external challenges. I’d also expect Americans to put more attention and effort into teaching and learning about languages and foreign cultures, so that they could maneuver in a dangerous world more effectively. Only a truly secure nation can get away with being as ignorant of the outside world as the United States is, while at the same time believing it is somehow qualified and prepared to “lead” the world.

#8: If the United States were really insecure, we would be even more likely to play hardball with our enemies. As Alexander Downes has shown, democracies don’t follow Marquis of Queensbury’s rules when they find themselves in a serious war of national survival. Instead, they are as likely to deliberately kill large numbers of civilians as non-democracies are. Although the United States often does things to other countries that it would regard as barbaric were they done to us (including targeted assassinations and economic sanctions that harm civilians), U.S. armed forces do go to considerable lengths to minimize collateral damage. That would change quickly if we thought our survival or security were really at risk.

#9: If the United States were really insecure, our civil liberties were be under even greater pressure than they are today. When countries are really scared, individual freedoms and constitutional guarantees tend to go out the window. (See under: Patriot Act, McCarthyism, “warrantless surveillance,” Alien & Sedition Acts, etc.) If the United States were not the world’s most powerful country and actually faced a serious threat to its national independence, my guess is that there would be even more aggressive efforts to police discourse, wiretap suspected fifth columnists, and generally interfere with our traditional freedoms. Among other things this is why it is critically important to weigh threats and risks carefully. If national security elites get away with inflating threats, it becomes easier to place more shackles on us at home.

#10: If the United States were really insecure, we’d have a very different attitude toward international law, and on devising legal and/or normative constraints on warfare. Right now, American dominance encourages us to use whatever forces we have at our disposal (drones, cyber capabilities, surveillance, etc.) because we assume we will always be better at it than anyone else. But if we were really threatened, we might be more interested in eliminating categories of weaponry that we recognize could do great harm to us and might not confer any real military advantage. Who knows? We might even ratify the Law of the Sea Treaty!

4.9 Top Military Spender (per Capita) 2010

Country	Military Expenditure per Capita ($)
United Arab Emirates	3340
USA	2163
Saudi Arabia	1786
Israel	1781
Singapore	1604
Kuwait	1419
Oman	1379
Norway	1286
Australia	921
France	917
Bahrain	913
UK	898
Greece	839
Denmark	836
Brunei	825
Finland	702
Netherlands	695
Luxembourg	600
Canada	596
Italy	579
Switzerland	579
Cyprus	567
Sweden	565
Belgium	505
South Korea	501
Portugal	487
Germany	465
Russia	434
Japan	428
Austria	411
Selected others
Country	Military Expenditure per Capita ($)
China	84
India	37
Brazil	144
South Africa	74
Iran	93

Data sources: SIPRI; UNFPA

4.10 Opportunity Costs: Military Spending and the UN’s Development Agenda

	% of population below international poverty line of US$1.25 per day 2000-2009*	GDP per capita average annual growth rate (%) 1990-2010	*% of central government expenditure (2000–2009) allocated to:**
Country			Health	Education	Defense
Algeria	7	1.5	4	24	17
Australia		2.3	14	10	6
Bahrain		2.8	9	16	13
Bangladesh	50	3.5	6	14	8
Botswana	31	3.5	5	26	8
Brazil	4	1.5	6	6	3
Burkina Faso	57	2.4	7	17	14
Burundi	81	-1.6	2	15	23
Cameroon	10	0.6	3	12	10
Canada		1.9	9	2	6
China	16	9.2	0	2	10
Colombia	16	1.5	9	20	13
Congo	54	0.7	4	4	10
Costa Rica	1	2.6	20	24
Denmark		1.5	0	10	3
Ethiopia	39	2.9	1	5	17
Georgia	15	2.7	5	7	17
Germany		1.3	20	1	4
Greece		2.6	7	11	8
India	42	4.9	2	3	13
Indonesia	19	2.6	1	4	7
Iran	2	2.7	7	8	10
Israel		1.8	13	16	16
Italy		0.9	14	11	4
Japan		0.8	2	6	4
Jordan		2.5	10	16	19
Kazakhstan		3.9	6	7	6
Kuwait		2	5	8	6
Lebanon		2.4	2	7	11
Malaysia			6	23	11
Morgolia	22	3.1	6	9	9
Morocco	3	2.4	3	18	13
Myanmar		8.2	3	13	23
Nepal	55	1.9	7	18	9
Oman		2	7	15	33
Pakistan	23	1.7	1	2	13
Paraguay	5	0.1	7	22	11
Russia		2.1	7	3	12
Senegal	34	1.1	3	14	7
Singapore		3.9	8	18	24
South Korea		4.2	1	15	11
Spain		2.1	1	0	3
Sri Lanka	7	4.1	6	10	18
Sudan and South Sudan		3.6	1	8	28
Sweden		2.2	4	6	5
Switzerland		0.9	0	3	5
Syria	2	1.6	2	9	24
Tajikistan	22	-0.1	2	4	9
Turkey	3	2.3	3	10	8
UAE		0.5	7	17	30
UK		2.1	15	4	7
USA		1.8	24	3	19
Yemen	18	1.5	4	22	19

Industrialized countries		1.6	19	4	12
Developing countries	26	4.8	3	8	10
Least developed countries	50	3.2
World	25	2.6	15	5	11

– Data not available

* Data refer to the most recent year available during the period specified in the column heading.

x Data refer to years or periods other than those specified in the column heading. Such data are not included in the calculation of regional and global averages.

Source: The State of the World’s Children 2012; The World Bank; International Monetary Fund

4.11 Nuclear Proliferation

4.12 Arms Trade

4.12.1 Arms export agreements

4.12.2 Changes in Regional Arms Export Agreements between 2 Periods

4.12.3 Top 15 arms exporters 2007-2011

4.12.4 Top 20 arms importers 2007-2011

4.12.5 5 largest arms exporters and their major recipients, 2007–11

4.12.6 5 largest arms importers and their major suppliers, 2007–11

4.13 While Most People Were Hit Hard by the Recession, the Defense Industry Boomed

4.14 The World’s Biggest Defense Contractors (Sales)

4.15 Drone Proliferation

4.16 Better Ways to Create Jobs

4.16.1 Massive Defense Spending Leads to Job Loss

4.16.2 How many jobs does $1 billion buy?

4.17 G20 Countries: Renewable Energy Investment (2009)

Overall Rank on Investment	Country	2009 investment ($)	5-year growth in investment, (%)	Renewable Energy Capacity (gigawatts)	5-year growth in installed capacity (%)	Percentage of total power capacity (%)	Investment Intensity[1], (%)
1	China	34,600,000,000	147.5	52.5	79	4	0.39
2	US	18,600,000,000	102.7	53.4	24.3	4	0.13
3	UK	11,200,000,000	127.4	7.5	30	8.4	0.51
4	EU – other	10,800,000,000	87	12.3	17	6.7	0.26
5	Spain	10,400,000,000	79.7	22.4	9.1	30.1	0.74
6	Brazil	7,400,000,000	147.8	9.1	13.9	9.8	0.37
7	Germany	4,300,000,000	75	36.2	14.4	29	0.15
8	Canada	3,300,000,000	70.2	7.6	18.1	4.3	0.25
9	Italy	2,600,000,000	111	9.8	12.4	4.9	0.14
10	India	2,300,000,000	72	16.5	31	9	0.06
11	Mexico	2,100,000,000	91.9	3.2	10.1	3.3	0.14
12	France	1,800,000,000	98	9.4	31.3	8.1	0.09
13	Turkey	1,600,000,000	178	0.6	30	0.4	0.19
14	Australia	1,000,000,000	62.5	3.3	40	3.1	0.12
15	Japan	800,000,000	51.1	12.9	4.2	1.3	0.02
16	Indonesia	354,000,000	95	1.1	8	4.2	0.04
17	South Africa	125,000,000					0.03
18	Argentina	80,000,000		0.5	0.1	1.9	0.01
19	South Korea	20,000,000		0.7	249.4	0.8

Source: PEW Research

Footnote

1 Clean energy investment as a percentage of gross domestic product.

4.18 Asian Defence Spending

CAGRs[1] for Total Defense Spending in Constant 2011 U.S. Dollars by Country[2]

Defense budgets for the five Asian countries, China, India, Taiwan, South Korea and Japan, over the last decade has increased. The growth has not been linear, but visibly accelerated in the second half of the last decade. In the case of Taiwan, defense spending actually decreased between 2000 and 2005, and then rose significantly afterwards. “These steeper growth trajectories in recent years might be a precursor for continued significant increases in defense spending, especially in light of large, high-profile investment decisions such as India’s Medium Multi- Role Combat Aircraft (MMRCA) selection, Japan’s F-35 order, or South Korea’s F-X-3 multi-role fighter competition.”[3]

Taiwan for historical reasons used to have very volatile relationship with China – up until 1979 when USA changed its diplomatic recognition of both China and Taiwan, Taiwanese government was still actively pursuing its aim of “recovering the mainland”. Effectively acting as a buffer between the current only superpower in the world and an aspiring superpower, the martial affair of Taiwan remains a delicate and explosive issue. Despite the apparent volatility around the Taiwan Strait, in Taiwan at least, there have been growing and significantly calls for reduction in military spending.

China is Taiwan’s largest trading partner and reciprocally Taiwan has been one of China’s main sources of foreign direct investment.[4] With the economic integration comes close cultural and social exchanges that has led many to argue that there is an opportunity to enjoy a “peace dividend” – the stable cross-strait relationship allows Taiwan to reduce military expenditure without compromising its security. Many of these people treat arms deals with USA as furthering its imperial aims rather than addressing the ‘imbalance of military strength’ across the Strait.

Both China and Taiwan are prominent consumers of conventional arms. In 2005, Taiwan imported US$1.3 billion worth of arms – a figure only exceeded by five other countries. The PRC ranked fifth globally, importing US$1.4 billion in arms. However, the scale of Taiwan’s arms imports has let up in recent years. Taiwanese arms imports fell from US$9.8 billion between 1998 and 2001 to US$4.1 billion between 2002 and 2005. Meanwhile, the island’s total military expenditures as a percentage of Gross Domestic Product (GDP) fell from 3.8 percent in 1994 to 2.2 percent in 2006.

Arms sales to Taiwan: A means to what end?, CDI, 2007

This sentiment, combined with weaker economic performance compared to other East Asian economic powerhouses, arguably contributed to the reduction of military spending between 2001 and 2005. USA president George W Bush soon after coming into the office proposed several arms deals to Taiwan. The negotiations was pushed back in 2004 when a huge demonstration of tens of thousands of people took place to protest against arms purchases totaled NT$610 billion (US$18 billion). Each was holding a cup of ‘pearl milk tea’ – a characteristic Taiwanese drink – in response to the government’s call for every citizen to drink one cup less of pearl milk tea a week to fund the arms purchase. The negotiation for these arms deals has dragged on, even now.

Taiwan’s military expenditure increased towards the end of both Taiwanese president Chen’s and USA president Bush’s second terms (2004-2008) when Chen no longer worries about his re-electability and both were willing to add substance to Chen’s pro-independence rhetoric. The situation changed again when President Ma was elected, who claims to focus on further economic integration both with China and other neighbouring countries rather than the military build-up. Despite the reduction of military spending since, there is still on-going negotiation with USA over various (updated) arms purchases. With the lackluster economic performance (one of the worst) after the financial crisis, the anti-arms purchasing movement remains strong.

Footnote