on US-Euro defense spending
Defense spending in the United States has varied greatly over the last century, from under 1% in 1929 to 43% in 1944, illustrating how quickly the government can fund and mobilize its military, especially during periods of war or presumed hostilities. Defense spending declined in the later years of the Cold War, dropping to around half the amount spent by the Reagan Administration in the mid 1980s. With the breakup of the Soviet Union, fall of the Iron Curtain, and German reunification, the US Government kept spending relatively low during the Clinton era. That is, until 9/11 and the War on Terror, when spending increased to fund the military intervention and later surge in Afghanistan and Iraq. Defense spending is expected to decline to 4.6% of GDP by 2015, to approximately $750 billion, or around the same level as 2005’s Iraq initiative.
The five biggest contributors to global military expenditures in 2013 were, respectively, the United States, China, Russia, Saudi Arabia, and France, with two-thirds of all expenditures originating from America and its allies. The majority of these allies are the 28 European countries that are member states of the North Atlantic Treaty Organization (NATO), the transatlantic security institution that aimed to prevent Soviet aggression during the Cold War. In comparison to the United States and Russia, the European continent has gone light on defense spending since World War II, due in part to American largesse, NATO enlargement, and the Eastern bloc-Soviet Union alliance.
As of 2014, the United States contributes more than 70% of all NATO defense spending, followed by Britain, Estonia, and Greece, with each spending around half that of the United States. France, Turkey, and Poland each allocate just under 2% of their GDP to NATO spending. The Baltic States, formerly aligned with the Soviet Union, currently contribute less than 1% of their GDP to the NATO alliance. Although Russia has amassed a large stockpile of nuclear weapons and military equipment from the arms race during the Cold War, NATO has the advantages such as collective defense, ballistic missile defense shield, and nuclear capability. As a result of recent Russian adventures into Ukraine and the Crimea, NATO secretary general Anders Fogh Rasmussen has called for members to begin increasing their defense spending to 2–2.5% of GDP, which could garner up to $43 billion and help ease the financial burden on the United States.
Western sanctions on assets and travel imposed upon Russian officials and companies for their government’s incursion into Ukraine and the Crimea have succeeded in politically isolating Russia, weakening the ruble, downgrading Russia’s credit rating to BBB-, and increasing capital flight from financial markets. The Russian Federation is juggling high inflation, decreasing currency reserves, and a stagnant economy that is heavily dependent on oil and gas exports, which are nearing record lows and account for around 50% of the Russian Federation’s budget. Russia is expected to be in a recession until 2017 because of these sanctions. Seen as an aggressor, Russia was effectively expelled from the G8, the European Union downgraded their bilateral relationship, and NATO not only froze its cooperation, but is actively engaged in joint military exercises with former Soviet Republics in the region.
In military terms, Russia has been resurrected as an adversary of the West. In response to these recent events, Moscow has demonstrated that sanctions and international pressure have little influence on its foreign policy, as the Putin Administration has kept its focus on Ukraine and China. The Russian government has increased their emphasis on restructuring the military and attracting Chinese investments, most recently increasing their military exercises, mock bombings, and over flight activities in the Baltic Sea and Arctic (ranging as far as Ireland and Portugal). A strong military that can intimidate NATO makes the Putin administration popular among citizens, and with defense spending at 5.2% of GDP or $91 billion, this popularity may continue until the full effects of the recession are felt. In early November 2014, the Russian Foreign Ministry notified the United States that it would not attend the 2016 nuclear security summit in Chicago, citing doubts about the value of the summit and disregard for differing views on nuclear security. Instead, Russia would focus their attention on the United Nations nuclear body, the International Atomic Energy Agency (IAEA), bi-annual summit on preventing nuclear terrorism.
The increased American presence and NATO expansion in Central and Eastern Europe over the last decade negatively impacts Russian security in the region. Northern European countries feel especially vulnerable after the Russia-Ukraine crisis and Crimean annexation, and, as a result, the defense think tanks and corresponding defense spending has become a priority for those nations in the eye of the storm. Aggression has consequences, as a result of Russian aggression, American units are training with foreign militaries and NATO partners to push back or confront Russian expansion in Europe. After a period of stagnant or decreasing defense and military expenditures, forecasts and trends expect that Eastern European countries will expand their defense outlays over the next 12 months. Additionally, as a result of heightened Russian activity, northern European countries and NATO agreed to cooperate in improving military capacities in the Baltic States and extend the existing Scandinavian air force training partnership to Denmark.
Russia is also expected to increase defense spending, and is currently awaiting delivery of 2 French Mistral class warships valued at $1.58 billion. Although the Russian government paid a deposit to DCNS, the company contracted to build these ships, prior to European Union sanctions against Russian arms trading, the French government insists that the deal will be honored if a Ukrainian-Russian ceasefire is met. DCNS is liable to provide the ships or return the funds, as the contract was signed and paid prior to sanctions. Russia has given an ultimatum to the French government: deliver the two helicopter carriers before the end of November or face legal action. The French have also been negotiating with the Indian government over the last three years for delivery of 126 Rafale fighter jets to the Indian Air Force, a deal valued at $20 billion.
China recently unveiled their version of the F-35, the J-31, which was built from secret blueprints that were stolen by Chinese cyber spies. The long wait and hefty price tag of the F-35 has persuaded foreign governments to create their own version, i.e. India’s HAL AMCA, Turkey’s TAI TFX, Russia’s PAK FA, and Japan’s Mitsubishi ATD-X, and the Chinese J-31 joins the list as a less expensive and more attractive option for countries that cannot afford the multi-million dollar price tag for American stealth fighter aircrafts.
Although Lockheed Martin admits they were hacked, they stress that China did not steal the ‘crown jewels’ of their research and development efforts for the F-35. This demonstrates both cyber attack and cyber defense, as the J-31 does not have the advanced weaponry, avionics, look-down/shoot-down capability, modern stealth technology, and radar-defeating composites that the original American version has. Cyber attacks are when people attempt to penetrate or hack cyber defenses, obtain research and development data, identity security, and almost any other type of information that is saved or shared online or offline.
These cyber attacks and thefts against the United States drain around $400 million from the economy each year; according to a recent government commission on intellectual property, China accounts for 75–80% of this activity. The United States government needs to establish an ‘active cyber defense’ or create a new cyber deterrence strategy to combat these cyber attacks. Over the last year, China and Russia have secured several agreements regarding financial, commercial, and strategic cooperation in advanced weapons, engineering, trade and investment, and oil and natural gas, including a $456 billion deal between state-owned gas companies China National Petroleum Corporation and Gazprom.
The general perception regarding American-Russian military and defense spending is that when one country decreases or increases spending, the other follows suit. As such, Moscow is currently investing internally for external exercises, for example in southeastern Ukraine, and the United States has increased spending in August and September, not because of the Russian-Ukraine crisis, but for initiatives against the Islamic State. However, this increase may or may not be a trend going into 2015, as it goes against public opinion. According to a recent Pew Research survey, about half of Americans think defense spending should be kept at current levels, while also ensuring the country’s role as the only military superpower.
Additionally, 67% of Americans viewed the Islamic militant group in Iraq and Syria known as ISIS as a major threat. The United States has continued investing resources in unmanned aerial vehicles, UAVs, for missile strikes and reconnaissance missions. In addition, there are seven UAVs currently assigned to the U.S. Border Patrol surveilling the southern border of the United States observing and recording ground activities. These movements are sent back to control centers that may then send human personnel (military, law enforcement or contractors) to investigate. A similar strategy of observation is employed in inaccessible terrains, while also using UAVs as force multipliers. In Iraq, UAVs provide support for Kurds and the Iraqi government, and as they are not manned, pose a smaller risk for American armed forces in the loss of experienced and expensive pilots or boots on the ground.
The American-led invasion of Iraq has turned into the American-led intervention in Iraq a decade later. Despite recent successes in Iraq and with NATO missions, the Foreign Policy Initiative complained that with ongoing spending reductions the armed services “will no longer be sized to conduct large-scale, prolonged stability operations,” then the US “will no longer be prepared to win the peace afterwards.”
