Download PDF After three years of real reductions, global defence spending rose in 2014 for the first time since 2010. However, the geographical distribution of defence spending is changing.


As a result of the 2008 financial crisis, most NATO and European countries conducted defence reviews that saw significant force reductions. And though US forces still constitute a formidable military capability in Europe, the rebalance has seen troops in Europe reduced in favour of the Middle East and the Asia-Pacific. But greatly increased instability in North Africa and the Middle East, the conflict in Ukraine and increasingly assertive behaviour by Russian forces mean that Europe’s neighbourhood is far less secure than in 2008.

The force reductions, redundancies, restructuring and reforms required by the UK’s 2010 SDSR are complete, as is the with-drawal from a combat role in Afghanistan. A new SDSR is due in 2015 but it is far from clear that the current level of de-fence funding will continue after the next general election.

Enhancements to military capabilities continue in the Gulf. In the UAE, there has been significant investment in armoured personnel carriers. Some of these are US in origin but a substantial number are also indigenous, emblematic of the UAE’s developing domestic defence industry. The UAE Air Force has flown missions against ISIS. Upgrades to the combat-aircraft fleet have been much discussed. The air force’s three-aircraft A330MRTT fleet, meanwhile, allows unprecedented capability to patrol home skies and, combined with the C-130 and C-17 fleets, gives valuable lift options.

In Africa, Boko Haram’s advances in northern Ni-geria continued and the group extended its attacks to neigh-bouring Cameroon and Niger. Nigerian forces were often over-matched and regional armed forces from states themselves threat-ened took military action – including Chad and Cameroon. Without adequate political/military strategy and commitment by Ni-geria’s government, the area under insurgent control could well grow.

Regional states in Latin America stood up new security agencies to address threats from organised crime and insur-gencies, while a number of regional states have also sought to bolster rotary-wing aviation fleets and technical surveillance systems – also designed to bolster regional capabilities to counter these threats.


After three years of real reductions, global defence spending rose in 2014 (by 1.7%) for the first time since 2010. However, the geographical distribution of de-fence spending is changing.

The reduction in the US base and OCO (overseas contingency op-erations) budgets following the drawdowns from Iraq and Afghanistan have meant that US spending has dropped from some 47% of the global total in 2010 to around 38% in 2014. Meanwhile, real defence spending in Europe also continues to decline in the aftermath of the 2008 financial crisis – on aver-age by some 2% per annum since 2010. By contrast, defence outlays are rising in many emerging economies, particularly Asia, the Middle East and Russia.

Nominal defence spending in Asia has increased by more than a quarter since 2010. However, despite the large abso-lute spending increases in Asia, percentage real-terms increases in the region have averaged some 3.8% since 2010, a rate lower than re-gional growth rates (which averaged around 6.8% over the same pe-riod). In the Middle East and North Africa, nominal defence spending is estimated to have risen by almost two-thirds since 2010. Factoring in exchange rate and inflationary effects, this equates to a 40% increase in real defence outlays over the period.

Real Russian defence spending increases have averaged 10% in the three years to 2014, with a large increase in funds allocated to finance Russia’s ambitious State Armaments Programme. Maintaining this rate of increase will be difficult given the deterioration in the Russian economy due to poor economic fun-damentals, falling oil prices and economic sanctions; and will likely require political prioritisation of defence while focusing budget cuts on other government spending areas.


Research and development was going into new platforms for the US Navy, including unmanned systems, and plans were emerging to address concerns levelled against the LCS pro-gramme. This led, in late 2014, to the requirement for a ‘Small Surface Combatant’, to be paired in a 52-strong fleet with an LCS fleet retro-fitted with systems offering improved survivability and lethality.

In the last five years the Chinese People’s Liberation Army Navy has commissioned more frigates and destroyers than in any comparable period in its history. It also now has fewer destroyer and frigate hulls in service than at any point in the last decade, though the vessels themselves have increased in size. The 61 hulls in service in 2000 had less than 600 anti-ship and surface-to-air missile tubes between them; the current fleet has almost treble that number, with only 20% more hulls.

Russia’s navy continues to focus primarily on two nuclear submarine projects: eight Borey-class SSBNs due to be equipped with the troubled Bulava SLBM; and seven Yasen-class multipurpose cruise-missile-equipped SSNs. Additional classified ‘special projects’ boats are planned. It seems unlikely that these ambitious plans will be implemented on schedule given the difficulties already ex-perienced in building 50 or so major surface warships, and the time taken to complete submarines that have gone into service in recent years.


Numbers of land platforms in Europe have reduced sub-stantially since the mid-1990s. This reduction has been driven by changing defence aspirations and procurement plans, as well as financial considerations. Between 1995 and 2015, numbers of main battle tanks in Europe declined from around 25,000 to just under 8,000. Over the same period, armoured infantry fighting vehicles declined from just over 11,000 to around 7,500.

Some observers of China’s People’s Liberation Ar-my have talked of ‘brigadisation’ of the ground forces, but this has not yet been totally realised. About 20 infantry divisions and one armoured division remain both in the 18 group armies and as independent units. After these reductions began, many divisions were downsized into one brigade of the same type. Recently, all armoured divisions – bar the 6th in Beijing – have transformed into brigades.


The coalition air-led campaign against ISIS underscores both the utility and the limitations of air-power, but suggestions the air cam-paign has failed are incorrect. An air campaign alone was never going to prove decisive against ISIS. This requires a concerted whole-of-government approach including non-military as well as military tools.

Armed UAVs apparently in Nigeria and almost certainly in Pakistan mark the beginning of the provision of such capabilities other than by the US (Israel is not known to have exported armed UAVs) – in both cases, China is almost certainly the pro-vider. The UAV observed in Nigeria appeared to be fitted with two kinds of air-to-surface weapons that China has been developing for unmanned platforms.

Underlining the importance of airborne intelligence, surveillance and reconnaissance, the US has decided to retain the U-2 ISR aircraft until 2019. Air power remains a strategic asset with the US and Russia continuing next-generation bomber projects – during 2014 the US issued a request for proposals while Rus-sia is thought to have completed the basic design of its project. Mean-while the US is examining future concepts of combat aircraft to suc-ceed the current fifth-generation programmes while both the US, Russia, China and others are considering the optimum mix of manned and unmanned aircraft that will constitute future force structures. These developments will be watched by emerging military powers across the globe.

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