11 September 2008 1 Defence Efforts International Comparison Attempt 2008 Edition Most of the comparisons focus on implemented budgets (2007 data are the.

11 September 2008

1

Defence EffortsInternational Comparison Attempt

2008 Edition

Most of the comparisons focus on implemented budgets (2007 data are the last available information).

EuroDéfense FranceÉcole militaire – BP 44 – 75007 Paris, France

Phone/Fax: +33 (0)1 44 42 42 15

Email: [email protected]

11 September 2008

2

CommentsMethodology

Official statistics can induce biases of understanding since, for historical or methodological reasons, they are not presented through similar parameters or identical definitions (for instance, pensions are not systematically included in the defence budget).

EuroDéfense's approach aims at providing an analytical and interpretative framework of defence efforts by presenting, as much as possible, data:

- related to implemented budgets and not voted ones, which helps underlying the effective defence effort of the selected countries;

- without pensions, to facilitate comparisons with countries which do not finance them through their defence budget;

- in taking account, for pro forma comparisons, of only defence-related spending of French Gendarmerie and Italian Carabinieri;

- in purchasing power parities when possible, since it helps correct the effects of short-term exchange rates fluctuations and the under- or over-evaluations of national currencies;

- in euros, in other cases, to facilitate international comparisons, by using the average annual exchange rates established by the European Central Bank;

- in constant values, to make long-run comparisons possible without the deforming effects of inflation over long-run series.

Note on the United States

The budget of Pentagon does not include expenditures realized by the Department of Energy in the field of nuclear deterrence, which represent an annual average budget of 22.3 billion dollars over the 2006-2012 period.

A large share of American military expenditures in Iraq and Afghanistan are not directly included in the DoD budget, but supported by specific supplemental budgets voted each year by the Congress. Therefore truly implemented or already-voted expenditures are included in the Outlays* aggregate, but DoD expenditure forecasts do not take account of them.

Note on the United Kingdom

The new public finance system adopted in 2002 by the United Kingdom makes uneasy the distinction of expen-ditures by nature because of a so-called "commercial" accounting system, which tends to globalize expenditures by mission. Data presented here correspond to guesstimates based on EuroDéfense analyses.

Note on France

France has been using a new public finance nomenclature, known as LOLF (Loi organique relative aux lois de finances), since fiscal year 2006. This approach in terms of missions and programmes is going to reduce the preciseness of information in a similar way as it happened in the United Kingdom since 2002.

* DoD Comptroller Office Definition : "Outlays, or expenditures, are the liquidation of the Government's obligations. Outlays generally represent cash payments."

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3

Defence expenditures as % of GDP 2001-2007(NATO standard or alike, without pensions)

1,66%

2,34%

2,99%

1,81%

1,36% 1,39%

1,13% 1,05%1,18%

1,00%1,14%

1,00%

1,10%1,25%1,29%

1,64%

3,64%

2,06%

United States United Kingdom France V2 Sweden Netherlands Denmark Germany Italy V2 Spain

2001 2002 2003 2004 2005 2006 2007

V2: French gendarmerie and Italian carabinieri with a rate of military activity at 5% and 15%, respectively; including funds provided by Industry or Research Ministries.

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4

393 419462

90 95 100

0

100

200

300

400

2005 2006 2007

442 444 456

162 163 172

0

100

200

300

400

2005 2006 2007

116125

139

44 47 50

0

20

40

60

80

100

120

140

2005 2006 2007

1,38 1,36 1,35

1,88 1,98 1,96

0,00

0,50

1,00

1,50

2,00

2005 2006 2007

1 499 1 490 1 513

330 329 347

0

500

1 000

1 500

2005 2006 2007

2,73 2,72 2,65 2,652,632,47

4,55

ratio USA/EU 27

4,53 4,35

0,73 0,69 0,69

4,37 4,39 4,60

V2: French gendarmerie and Italian carabinieri with a rate of military activity at 5% and 15%, respectively; including funds provided by Industry or Research Ministries.

United States / European Union 2004-2006(OTAN V2 standard or alike, without pensions)

Defence expenditures (billion PPP euros)

Capital expenditures (billion PPP euros, production + R&D + tests)

United States

27 countries of the European Union

Military personnel (millions)

Defence expenditures per inhabitant (PPP euros)

Capital expenditures per inhabitant (PPP euros)

11 September 2008

5

0

50

100

150

200

250

300

350

400

450

500

550

600

billi

ons

of F

Y09

con

stan

t US

$0

Global budget

RDT&E

Procurement

US Defence Budget 1950-2013(DoD-051 Outlays)

NB: "Global War on Terrorism" operations included up to 2009.

11 September 2008

6

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Source: US Census Bureau

European Union /United States arms trade(millions dollars)

EU United States

United States EU

11 September 2008

7

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

United Kingdom Sweden Spain Italy France Germany

Source: US Census Bureau

Imports of US military equipment (millions dollars)

11 September 2008

8

0

100

200

300

400

500

600

700

800

900

1 000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

United Kindgom Sweden Spain Italy France Germany

Source: US Census Bureau

Exports of military equipment towards the US(millions dollars)

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9

0

10

20

30

40

50

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

France Germany Spain* Italy* United Kingdom

42,1

31,0

25,0

14,4

10,8

V2: French gendarmerie and Italian carabinieri with a rate of military activity at 5% and 15%, respectively; including funds provided by Industry or Research Ministries.

Defence expenditures, real expenses(without pensions, billion 2007 euros)

11 September 2008

10

0

5

10

15

20

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

France Germany Spain* United Kingdom Italy*

20,8

4,8

7,3

14,7

3,4

V2: French gendarmerie and Italian carabinieri with a rate of military activity at 5% and 15%, respectively; including funds provided by Industry or Research Ministries.

New rules of public finances

Equipment expenditures(excl. infrastructures, R&D and MRO included, billion 2007 euros)

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11

43%

30%

51%

33% 35%

26%

43%38%

44%

34%

44%

30%

43%

38%

32%

44%

30%33%

36%

47%

30%

47%

29%34%

50%

25%

50%

33%29%

46%

33%

49%

31%29%

47%

France Germany Spain United Kingdom Italy

2001 2002 2003 2004 2005 2006 2007

Share of equipment expenditures in the total defence budget

(without infrastructure and pensions, R&D and MRO included)

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12

57

3024

43

24

102

21 1823

46

20

85

25

47

28

91

2424

49

29 26 25

91

19

55

29 28

95

54

28 26

97

12

26

109

France Germany Spain United Kingdom Italy

2001 2002 2003 2004 2005 2006 2007

V2: French gendarmerie and Italian carabinieri with a rate of military activity at 5% and 15%, respectively; including funds provided by Industry or Research Ministries.

Equipment expenditures per soldier (OTAN standard, thousand euros)

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13

100 000

150 000

200 000

250 000

300 000

350 000

400 000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

France V2 Germany Italy V2 Spain United Kingdom

V2: French gendarmerie and Italian carabinieri with a rate of military activity at 5% and 15%, respectively.

Military personnel(NATO standard)

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14

0

5

10

15

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

France Germany Spain Italy United Kingdom

Personnel expenditures(civil and military, billion 2007 euros)

New rules of public finances

11 September 2008

15

Western Europe

Oceania

South AsiaCentral America

South America

Central/Eastern

Europe

Middle East

North Africa

Sub-Saharan Africa

North

America

East Asia

1996: 831 billion dollars 2007: 1214 billion dollars

30,8%

12,5%

46,3%44,4%

12,5%

21,5%

+46.1%

5,2%6,5%

Russia included in "Central/Eastern Europe "Source: Stockholm International Peace Research Institute

World military expenditures in 1996 and 2007(constant 2005 dollars, market exchange rates)

Central America

South America

South AsiaOceania

Eastern Asia

Middle East

North Africa

Sub-Saharan Africa

Central/Eastern Europe

North America

Western Europe