WASHINGTON - A senior Pentagon advisory group, in a series of bluntly worded briefings, is warning President-elect Barack Obama that the Defense Department’s current budget is “not sustainable,” and he must scale back or eliminate some of the military’s most prized weapons programs.

The briefings were prepared by the Defense Business Board, an internal management oversight body. It contends that the nation’s recent financial crisis makes it imperative that the Pentagon and Congress slash some of the nation’s most costly and troubled weapons to ensure they can finance the military’s most pressing priorities.

Those include rebuilding ground forces battered by multiple tours to Iraq and Afghanistan and expanding the ranks to wage the war on terrorism.

“Business as usual is no longer an option,” according to one of the internal briefings prepared in late October for the presidential transition, copies of which were provided to the Globe. “The current and future fiscal environments facing the department demand bold action.”

The briefings do not specify which programs should be cut, but defense analysts say that prime targets would probably include the new F-35 fight er jet, a series of Navy ship programs, and a massive Army project to build a new generation of ground combat vehicles, all of which have been skyrocketing in cost and suffering long development delays.

Such cuts would affect the New England economy. General Dynamics builds warships and submarines in Maine and Connecticut, while Raytheon, Massachusetts’ largest employer, is involved in numerous weapons programs from ships to missile defenses and satellites.

Pentagon insiders and defense budget specialists say the Pentagon has been on a largely unchecked spending spree since 2001 that will prove politically difficult to curtail but nevertheless must be reined in.

“The forces arrayed against terminating defense programs are today so powerful that if you try to do that it will be like the British Army at the Somme in World War I,” said Winslow Wheeler, director of the Straus Military Reform Project at the liberal Center for Defense Information in Washington. “You will just get mowed down by the defense industry and military services’ machine guns.”

Since the Sept. 11, 2001 terrorist attacks, funding has grown for both the annual defense budget and emergency spending for the wars in Iraq and Afghanistan. The latest Pentagon budget, for the fiscal year that began Oct. 1, is an estimated $512 billion, not including more than $800 billion in additional war spending that has been allotted since 2001.

But a series of forces are now at play that make such large expenditures untenable, according to the Defense Business Board, the Pentagon oversight group, which includes about 20 private sector executives appointed by the secretary of defense.

The board, which meets at least four times a year, has a full-time staff and is an official government body. Because the board’s report has not been made public, a Pentagon spokesman would not comment on it.

One factor is historical. Since the end of World War II there have a been four periods of significant increases in US defense spending and all were followed by significant decreases in funding from Congress, the group says.

Added pressure on the Pentagon budget comes from what the briefing calls “fiscal constraint in a tough economy” that is saddled with rising deficits and growing political support for increased government spending in other areas.

“We are all acutely aware there is a financial crisis going on,” said a senior defense official closely involved in the transition process.

Exacerbating the problem, according to the advisory group, are the rising costs of military personnel, their healthcare, and overhead. The documents estimate that more than half the annual defense budget now goes to “people costs,” including $60 billion a year for the healthcare of service members and retirees.

They will almost certainly grow, even with a reduction in US troops in Iraq, given that the Pentagon has said it will increase ground forces by more than 70,000 troops over the next few years.

That leaves dozens of weapons systems and other equipment under development as prime areas for cost-savings, according to Steven Kosiak, vice president of budget studies at the nonpartisan Center for Strategic and Budgetary Assessments in Washington.

“The areas most likely to get cut are acquisition and procurement,” Kosiak said. “As long as the administration is committed to increasing troop strength you have to pay those people costs, and there is not a lot of flexibility when it comes to benefits.”

A recent analysis by the Government Accountability Office, the investigative arm of Congress, assessed the Pentagon’s 95 largest weapons programs and found that as of March 2008 they had collectively increased in cost by nearly $300 billion over initial estimates.

“None had proceeded through development while meeting the best-practice standards for mature technologies, stable design, and mature production processes all prerequisites for achieving planned cost and schedule outcomes,” the GAO said in documents published last week to help guide the presidential transition.

It added: “Over the next five years, [the Defense Department] expects to invest more than $357 billion on major defense acquisition programs. Much of this investment will be used to address cost overruns rooted in poor planning, execution, and oversight.”

All the branches of the military are in a similar situation. The Army plans to invest an estimated $160 billion in the coming years on a set of new combat vehicles collectively known as the Future Combat System. But their capabilities “are still early in development and have not yet been demonstrated,” according to GAO.

The Navy, meanwhile, has continued to bust its budget for shipbuilding. The service’s six most recent new ship designs have experienced cumulative cost growth of $2.4 billion over original estimates, according to GAO. Their delivery has also been delayed, on average, by 97 months.

The Air Force’s portfolio for new equipment, meanwhile, “will demand unprecedented levels of funding,” according to GAO’s transition materials. Its development costs have increased nearly 50 percent above original estimates and eight separate programs have had to report cost breaches to Congress.

The F-35 Joint Strike Fighter - designed for the Air Force, Navy and Marine Corps and the most costly aircraft procurement effort in history - “faces considerable risks stemming from its decision to reduce test assets and the flight-test program to pay for development and manufacturing cost increases,” according to the GAO.

Other programs suffering from big cost increases and delays include space systems such as satellites and the national missile defense system, the largest research and development program on the Pentagon’s books.

Together these programs constitute a military crisis in their own right, according to the internal Pentagon documents.

The Pentagon, one document states, “cannot reset the current force, modernize and transform in all portfolios at the same time. Choices must be made across capabilities and within systems to deliver capability at known prices within a specific period of time.”

And a few cuts here or there won’t do the trick, they add. “Taking cuts at the margin won’t work this time, nor will pushing things off to later years.”

[Original article at the Boston Globe's website.]

Kevin Rudd has foreshadowed a dramatic expansion of the Royal Australian Navy to counter a military build-up being bankrolled by Asia’s growing economic prosperity.

The Prime Minister last night warned that nations across Asia were modernising their military forces, particularly with more powerful jet fighters and submarines, and that Australia must respond with its own upgrade.

In a blunt warning to the national congress of the Returned and Services League, Mr Rudd also said he wanted to use Australia’s status as “a middle power” to promote comprehensive diplomatic engagement within the region and through the UN as a buffer against regional rivalries.

“We see a substantial arms build-up over time,” Mr Rudd said in Townsville. “We need to be aware of the changes taking place. And we must make sure that we have the right mix of capabilities to deal with any contingencies that might arise in the future.”

Mr Rudd did not name any particular nation as posing a specific military threat. But Australian and US intelligence agencies are known to be wary of the growing economic might of China and India.
And they have lately warned that China is building an underground naval base at Sanya, on Hainan Island, off its southern coast, with berths for up to 20 advanced nuclear submarines.

Earlier this year, the Chinese navy had at least 55 submarines, eight of them nuclear-powered. Many were equipped with Yingji-8 anti-ship cruise missiles that can be launched from under water. It is believed there are a further 13 nuclear submarines in the planning stages. China announced in March it would lift its military budget this year by a record 19.4per cent to $63 billion, but Washington believes its actual spending is much higher.

Since taking power last November, Mr Rudd’s Government guaranteed an annual 3 per cent real growth rate in defence spending until 2017-18 and has quarantined the department from budget cuts. He has been preparing a Defence white paper to be completed within months, as well as a national security statement expected to be delivered within weeks.

And the Prime Minister has pursued frenetic regional diplomacy, defying Opposition criticism to visit China, Japan, South Korea, Indonesia, Malaysia and Singapore.

Last night, Mr Rudd told the RSL that the Asia-Pacific region was so dynamic and included so many “flashpoints” that Australia could not bank on never-ending regional co-operation.

“The Asia-Pacific region will become more prosperous and its population will continue to grow,” he said. “Militarily, however, as it has already become economically and politically, the Asia-Pacific will become a much more contested region.”

By 2050, Australia’s population would reach 35 million, while China’s would peak at 1.5 billion by 2020 and India’s would hit 1.8billion by the middle of the century.

“The demographic changes in our region will mean that by 2020, when we look to our north, we will see a very different region to the one we see now — one where population, food, water and energy resources pressures will be great,” he said.

These pressures would add to those around pre-existing political fault lines, such as territorial disputes.
With North and South Korea still technically at war and China and Taiwan unable to resolve basic questions of sovereignty, increasing military spending was an issue of concern.

“As a general observation, the modernisation of Asian military forces is being characterised by significant improvements in air combat capability, and naval forces, including greater numbers and more advanced submarines.”

Mr Rudd said Australia must therefore look to its own military resources and maintain a flexible land force able to contribute to “high-end military engagements”.

“We need an advanced naval capability that can protect our sea lanes of communication and support our land forces as they deploy,” he said. “And we need an air force that can fill support and combat roles and can deter, defeat and provide assistance to land and maritime forces.”

Mr Rudd said the power of the US would decline relative to that of other nations in coming decades but that it would remain the world’s only superpower until the middle of the century and maintain its “global leadership role”.

He also used his speech to bring context to his foreign policy moves since taking office, stressing that his proposal for the creation of an Asian Economic Community with a role on security, not just trade, was tied to his determination to use Australia’s status as a middle power to encourage regional security.
Likewise, he said, his proposed creation of an International Commission on Nuclear Non-Proliferation and Disarmament was part of an attempt to respond to the spread of nuclear weapons to more and more nations.

“Australia has the credibility and the drive to lead initiatives like this, in part because they are in our interest, but also because they make a positive contribution to the international community,” Mr Rudd said. “But diplomacy must always be reinforced by a credible national defence strategy.

“We need to make sure that we have an Australian Defence Force that can answer the call if it is needed.”

Earlier yesterday, Brendan Nelson told the RSL there should be a formal national apology to Vietnam veterans, acknowledging they were ill-treated when they returned to Australia in the 1960s and 1970s.

The Opposition Leader said Vietnam veterans deserved an apology for being subject to abuse and mistreatment on their return from service.

Within hours, the proposal was rejected by the Vietnam Veterans Association.

Vietnam Veterans Association national president Ron Coxon told The Australian last night Vietnam veterans felt they had already been honoured by the 1987 welcome home march, the construction of a national memorial in 1992 and the recognition of major battles such as Long Tan.

“I don’t think he would achieve anything by doing that,” Mr Coxon said of Dr Nelson’s proposal. “They would be better looking after veterans in the claims process rather than apologising for it.”

Text of report in English by South Korean news agency Yonhap [Yonhap headline: "(lead) Northeast Asia Urged To Accelerate Efforts To Form OSCE-Style Security Body"]

CHEJU ISLAND, June 23 (Yonhap) - The 4th Cheju Peace Forum, an international conference, ended here on Saturday with a call for Northeast Asian countries to double their efforts to create a standing organization to handle multilateral security issues.

Participants proposed the Organization for Security and Cooperation in Europe (OSCE) as a role model, while reaffirming their support for the six-party talks on the North Korean nuclear crisis.

“Today’s critical security issues in Northeast Asia, most notably the North Korean nuclear challenge, arms race pressures, and the structural instability associated with rising military spending by states within the region and newly emerging non-traditional security challenges, urgently require new measures to encourage multilateral security cooperation in the region,” read the declaration adopted to crown the three-day event on South Korea’s southern resort island of Cheju.

The biennial forum brought together 120 former and current heads of state, other political leaders, scholars and businessmen under the theme of “Peace and Prosperity in Northeast Asia: Exploring the European Experience.”

In the declaration, they emphasized that Northeast Asia can learn practical lessons from the European experience of negotiating and establishing the OSCE.

The creation of the OSCE, the world’s largest regional security organization with 56 member states, dates back to the 1975 Helsinki Accord between the Soviet-bloc nations and the democratic West to ease tensions and promote human rights and trade. The landmark agreement was a fruit of years of negotiations based in Helsinki.

The declaration said Cheju Island can play a similar role.

“To ensure a lasting, flexible, and evolving process of dialogue and negotiation between the states, peoples, and public and private institutions of the Northeast Asian region, we advocate a new Cheju Process, modelled on and drawing on the valuable lessons of the Helsinki Process,” it read.

Cheju, 90 km south of mainland Korea, was designated by the South Korean government as an “Island of World Peace,” in 2005. One of the country’s most popular tourist attractions, the island is now aiming to emerge as a hub for regional peace activities.

Meanwhile, US Ambassador to South Korea Alexander Vershbow said the six-way talks on North Korea’s nuclear programme can serve as a framework for continued multilateral consultations and cooperation in the region.

“Just as the five parties are using their combined leverage and resources to help convince the North Koreans to abandon their nuclear arsenal, countries in the Northeast Asian region could use their combined leverage and resources to address other issues in the future,” he said at the end of the forum here.

Samuel R. Berger, national security adviser to President Bill Clinton, echoed the view.

“A multilateral security and cooperation forum would assist significantly in development a regional security community in Northeast Asia which could mitigate tensions, resolve disputes and engender all-important habits of cooperation,” he said.

He stressed the significance of Washington’s role.

“As we have recognized here at this conference, US leadership is necessary for realizing a multilateral security and cooperation forum in Northeast Asia,” he said.

Source: Yonhap news agency, Seoul, in English 1109 gmt 23 Jun 07

China’s military spending soared last year, vaulting Beijing into second place by some measures in the global arms bazaar, but still lagged far behind the United States.

U.S. military spending, fuelled by war in Iraq and Afghanistan, reached $529-billion (U.S.) last year, or nearly half of all the world’s total defence spending, according to the Stockholm International Peace Research Institute.

“The large increase in the USA’s military spending is to a great extent due to the costly military operations in Afghanistan and Iraq,” it said. The Pentagon burned through $1.4-billion every day last year, or $1,756 for each American over the course of a year.

By comparison, Canada is ranked 13th in the world in overall military spending, at $13.5-billion a year, or $414 a person.

While total U.S. defence spending dwarfs the rest of the world, it remains a relatively small part - roughly 4 per cent - of the total U.S. economy. That’s more than double the Canadian defence spending level but less than half the proportion spent in some countries such as Saudi Arabia, Pakistan and South Korea.

But it was China, not the United States, that boosted its military spending the most in recent years. Last year, China spent an estimated $188-billion (measured in terms of purchasing power parity), the institute said in its annual report released yesterday in Stockholm.

By that measure, Beijing is now the world’s second-biggest military spender, well ahead of India, Russia and Britain. Even when China ’s spending is expressed at the official exchange rate, widely viewed to significantly undervalue the yuan, it drops to an estimated $50-billion, which tops Asian countries in spending.

(Chinese spending is also skewed by the relatively low cost of paying a huge conscript army where each of 2.2 million soldiers gets paid the equivalent of less than $100 a month).

There’s little good news in the institute’s 2007 yearbook. The brief decline in post-Cold War defence spending has been eclipsed by significantly greater military expenditures, up 37 per cent in the past decade.

The so-called war on terror is largely responsible for soaring military expenditures by the United States and some of its allies.

Still, China’s ambitious push to transform its military from an unwieldy conscript-based army into a powerful, modern force capable of projecting power throughout Asia and beyond is also redefining the military balance.

“In 2006, China’s military expenditure continued to increase rapidly, for the first time surpassing that of Japan and hence making China the biggest military spender in Asia,” the report said.

Last year, China also successfully destroyed an orbiting satellite with a missile, pushing the arms race into space. It is also investing massively in new warships and longer-range combat aircraft.

Even Beijing’s own official figures, almost universally regarded as massively understating Chinese military spending, called for an 18-per-cent increase this year.

Washington and Beijing are in a war of words, both accusing the other of unnecessary military spending.

Beijing still lacks “the military capability to accomplish with confidence its political objectives on the island [of Taiwan] particularly when confronted with the prospect of U.S. intervention,” a Pentagon report on China’s military power concluded last month.

China shot back, claiming the Bush administration was “in pursuit of absolute military advantage” despite already having “the world’s most powerful military.”

Yesterday’s report ranged far beyond the big arms spenders.

“There are roughly 1,700 tonnes of highly enriched uranium and 500 tonnes of separated plutonium in the world, sufficient to produce over 100,000 nuclear weapons,” it noted.

The institute also reported that the world’s poorest countries tended to spend the most on defence. “The ratio of military spending to social spending was found to be highest in those countries with the lowest per-capita incomes,” it said.

“It is worth asking how cost-effective military expenditure is as a way of increasing the security of human lives,” said Elisabeth Skons, who headed the team compiling the report. “Millions of lives could be saved through basic health interventions that would cost a fraction of what the world spends on military forces every year.”

The Big Spenders

The United States still has the world’s highest military budget, but China is coming up fast. Figures in U.S. dollars.

Top Five Military Spenders (2006)

*Expenditure in U.S. dollars, at constant 2005 prices and exchange rates. **Estimated figure.

SOURCE: SIPRI YEARBOOK 2007

A growing worry for Washington: China’s sharply rising military budget. Beijing’s spending on military programs and forces will jump 15% to 20% a year for the next several years as production begins in costly programs that have been in the development and testing stage for the past several years. An increase at that level is consistent with China’s economic growth and its military ambitions and prowess in East Asia and the Pacific. While long classified, China’s military budget is thought by Western intelligence analysts to be about $150 billion in U.S. dollars this year, fully three times what recent official Chinese statements declare. That’s still far below the $650-billion U.S. defense spending plan on tap for 2008, but China’s projected increase – a doubling in six years – is a cause for concern.

China’s procurement goals cover several areas: Enhanced air defenses and air radar, a proposed mobile intercontinental ballistic missile launch system, new submarines, destroyers and aircraft carriers, more combat jets, military transportation equipment, covert defense communications and replacement satellites. China is thought to currently possess an arsenal of 20 to 30 nuclear missiles in stationary silos.

China’s large appetite for military expansion will prompt the U.S. and the European Union (EU) to beef up enforcement of military export controls on sensitive technologies, namely hardware and software with potential military applications. That could have the effect of delaying approval of export licenses for some U.S. companies, such as for sophisticated electronics and aerospace products, for instance. It will also lead to even more pressure from the U.S. on the EU not to lift its ban on military sales to China, but France and Germany want to explore the possibility of limited sales. It remains unknown what and how much Russia sells to China.

The fast rise in defense spending also will add weight to arguments for more U.S. military exports and support, such as joint training exercises, to benefit Taiwan, South Korea and Japan, especially Navy- and Air Force-related sales. Annual government-to-government foreign military sales in the region will probably double as a result, from about $2 billion to $4 billion, in a few years.

BRIEFLY: Asia/Pacific: Tokyo

Japan should raise its military spending, as other countries in the region do, and share the costs of defending itself with the United States, Washington’s ambassador to Tokyo said Tuesday.

Ambassador Thomas Schieffer said Japan, whose defense is largely covered by the United States under a bilateral security treaty, spends roughly the same amount on its military as it did in 1998. In contrast, the U.S. defense budget nearly doubled from 1998 to 2007, while China, South Korea and Russia also increased military spending, he said.

”We believe that Japan benefits from being in an alliance with a partner whose military capabilities have increased over the last 10 years,” Schieffer said in a speech. ”And we believe that Japan should consider the benefits of increasing its own defense spending to make a greater, not lesser, contribution to its own security.”

Before the presidential election, reports began to circulate that the Pentagon was planning to propose a defense spending increase of roughly $450 billion over five years. That’s in addition to the increases in the base budget already laid out in the 2009 Future Years Defense Plan.

The services have been laying the groundwork for the request for several months. Earlier this year, briefing slides showing $60 billion to $80 billion per year in new expenditures started making the rounds inside the Beltway, supported by a public campaign by conservative think tanks and politicians to establish a floor on defense spending at 4 percent of GDP.

The uniformed services are trying to lock in the next administration by creating a political cost for holding the line on defense spending. Conservative groups are hoping to ramp up defense spending as a tool to limit options for a Democratic Congress and president to pass new, and potentially costly, social programs, including health care reform.

They also like the idea of creating an unrealistically high baseline of expectations for defense spending that will allow them to claim President Obama has cut defense spending.

Let us be clear: There is no indication that the president-elect intends to cut defense spending, and indeed, during his campaign he promised to increase the size of the ground forces, which makes an increase in spending almost inevitable. As with any transition, there will be some adjustments to specific programs, but cutting individual weapon systems is not and has never been synonymous with cutting spending overall.

There are so many things wrong with this emerging process that it is hard to address the issue concisely. Promoting overspending on defense in order to forestall popular social spending is undemocratic - it creates a false tension between national security and other public policy goals.

The informal alliance between the services and conservative think tanks threatens to further politicize the military. The abuse of national security arguments to win political arguments is both morally suspect and threatens the security of the nation by delinking strategic assessment from public policy.

Ultimately, the most dangerous aspect of this development is the threat posed to civil-military relations. We went through a similar process eight years ago, and the results were painful and unsatisfactory.

In the mid-1990s, congressional Republicans, concerned that the Clinton administration was allowing the Department of Defense to run on inertia, mandated the Pentagon produce a Quadrennial Defense Review (QDR). The 1997 QDR did nothing to stanch concerns. Indeed, it was eviscerated as an empty bureaucratic document by another congressional mandated review, the National Defense Panel (NDP).

The reaction was swift. For the 2001 QDR, the role of the NDP was gutted. From being a public review of the QDR after issued, the NDP became an internal advisory panel to help shape the QDR. More significantly, the services became much more active in trying to shape the next QDR to bind the next administration while working on making alliances on Capitol Hill.

Starting in 1998, the services were working with powerful congressional players to create a document and a process that would block external criticism and also bind the next administration.

The roots of former Defense Secretary Donald Rumsfeld’s dicey relations with the uniformed military stemmed from his refusal to accept a fait accompli in the form of a QDR largely drafted without his input. The consequences of the rift were severe. After 9/11, when the United States found itself at war first in Afghanistan and then Iraq, Rumsfeld was quick to reject military advice and perhaps too willing to accept suggestions from self-interested amateurs and pundits from outside.

The roots of this rest in the inappropriate conduct of the services from 1998 to 2001, when they sought essentially to shake off key elements of civilian oversight.

And now, we see the past as prologue. The services have not learned the lessons of 2001. They are trying to limit civilian control by conspiring to lock in the new administration. No good can come of this. Either the incoming administration will assert itself and as a result cause tremendous tension with the services, or it will roll over and cause irreparable harm to the concept of civilian control over the military.

There is a way to avoid this potential train wreck. Instead of focusing tactically on individual systems, the services should be acting strategically and building a cooperative relationship with the incoming administration. Instead of trying to constrain and marginalize the civilian leadership, the services should engage and try to convince the new team. Mutual respect will go much further than tired inside-the-Beltway tactics and Pentagon games.

Bernard Finel is a senior fellow at the American Security Project and lead author of “Are We Winning? Measuring Progress in the Struggle Against Violent Jihadism.”

[Original article at Defense News]

Armed forces may be organized as standing forces (e.g. regular army), which describes a professional army that is engaged in no other profession than preparing for and engaging in warfare. Korea has compulsory military service; conscript service obligation is 24-28 months, depending on the military branch involved (to be reduced to 18 months beginning 2016).

This list of six countries by size of armed forces displays national troop levels by active troop strength. This list is indicative only, as strict comparisons cannot accurately be made. For example, “troop strength” in some forces might include administrative or paramilitary functions that in another country might be civilian roles and therefore excluded from the below figures.

This chart of six countries by size of military capabilities displays tank, destroyer, frigate, corvette, nuclear submarine, conventional submarine, fighter aircraft and nuclear weapons.

World military expenditure in 2006 is estimated at $1204 billion in current prices. This represents an increase of 3.5 per cent in real terms since 2005 and of 37 per cent over the 10-year period since 1997. World military expenditure is extremely unevenly distributed. In 2006 the 15 countries with the highest spending accounted for 83 per cent of the total. The USA is responsible for 46 per cent of the world total, distantly followed by the UK, France, Japan and China with 4-5 per cent each.The rapid increase in the United States’ military spending is to a large extent due to continued costly military operations in Afghanistan and Iraq. Between September 2001 and June 2006, the US Government provided a total of $432 billion in annual and supplemental appropriations under the heading ‘global war on terrorism’. This massive increase in US military spending has been one of the factors contributing to the deterioration of the US economy since 2001. In addition to its direct impact of high military expenditure, there are also indirect and more long-term effects. In 2006 China continued its steep increase in military expenditure, for the first time surpassing that of Japan and hence replacing Japan as the country in Asia with the highest level of military expenditure and as the fourth biggest spender in the world. Amid intense discussions on the right level of Japanese military spending, Japan decided, for the fifth consecutive year, to reduce its military spending in 2006 while at the same time focusing its military budget on missile defense.

Military Expenditure of 6 countries in Asia-Pacific region

World Rank Order: Military expenditures (percent of GDP)

reference: CIA The World Factbook

SIPRI (Stockholm International Peace Research Institute) Yearbook: military expenditure database World military expenditure in 2006 is estimated at $1,204 billion in current prices. This represents an increase of 3.5 % in real terms since 2005 and of 37 % over the 10-year period since 1997. Average spending per capita has increased from $173 in 2005 to $177 in 2006 at constant (2005) prices and exchange rates and to $184 at current prices.

World military expenditure, 1988-2006

World military expenditure is extremely unevenly distributed. In 2006 the 15 countries with the highest spending accounted for 83 per cent of the total. The USA is responsible for 46 per cent of the world total, distantly followed by the UK, France, Japan and China with 4-5 per cent each.

PDF:

The fifteen major spenders in 2006

A comparison of government spending priorities between samples of countries in different per capita income groups shows that the lower the income group, the higher the priority given to military spending in relation to social spending. Over the 5-year period 1999-2003, the share of military expenditure in GDP has been kept at a constant level in the high- and middle-income country-samples, while it has decreased somewhat in the low-income sample. At the same time social spending as a share of GDP has increased in high- and low-income groups but remained relatively stable in middle-income countries.

Military expenditure as a share of GDP, 1998-2003

Military expenditure in US dollars, at constant (2005) prices and exchange rates;

The rapid increase in the United States’ military spending is to a large extent due to continued costly military operations in Afghanistan and Iraq. Most of the increase resulted from supplementary allocations in addition to the regular budget. Between September 2001 and June 2006, the US Government provided a total of $432 billion in annual and supplemental appropriations under the heading ‘global war on terrorism’. This massive increase in US military spending has been one of the factors contributing to the deterioration of the US economy since 2001. In addition to its direct impact of high military expenditure, there are also indirect and more long-term effects. According to one study taking these factors into account, the overall past and future costs until year 2016 to the USA for the war in Iraq have been estimated to $2267 billion.

In 2006 China continued its steep increase in military expenditure, for the first time surpassing that of Japan and hence replacing Japan as the country in Asia with the highest level of military expenditure and as the fourth biggest spender in the world. Amid intense discussions on the right level of Japanese military spending, Japan decided, for the fifth consecutive year, to reduce its military spending in 2006 while at the same time focusing its military budget on missile defense.

Tomgram:

[Note for Tomdispatch readers: A few weeks ago, this site published Nick Turse's "Two Men, Two Legs, and Too Much Suffering: America's Forgotten Vietnamese Victims." The result was a small flood of letters from readers -- many of them Vietnam veterans -- looking for a way to donate money toward the purchase of new artificial legs for Pham Van Chap and Nguyen Van Tu, profiled in the piece. Now there is a way, thanks to the extraordinary efforts of two men: Tom Leckinger, with the U.S. Army in Vietnam and Cambodia in 1970 and today a resident of Hanoi where he served as the country representative for the humanitarian organization Veterans for America, and Chuck Searcy, a fellow U.S. Vietnam veteran, who has lived in Vietnam for more than a decade and serves as the country representative for the Vietnam Veterans Memorial Fund.

Any reader can now make a direct donation to purchase (and contribute to the continuing care for) new legs for Mr. Pham and Mr. Nguyen by sending a check or money order (payable to the Vietnam Veterans Memorial Fund) to:

Vietnam Veterans Memorial Fund
1023 15th Street NW
Suite 200
Washington, DC 20005

Please include a separate note indicating that your donation (tax deductible in the U.S.) is restricted to the "Two Men, Two Legs Fund." Any extra funds will be used for similarly disabled Vietnamese. Nick Turse, who coordinated this effort, is still in Vietnam interviewing.]

Often what is hidden in our world is so simply because no cares or thinks to look. Yes, a fair amount of attention has recently been given to the staggering new Pentagon budget request, the largest since World War II, that the Bush administration has just submitted to Congress for fiscal year 2009. It comes in at $515.4 billion – a 7.5% hike for an already bloated Pentagon — and that doesn’t include all sorts of Defense Department funds that will be stowed away elsewhere (even if in plain sight), nor does it include the couple of hundred billion dollars or more in funds to be appropriated largely via “supplemental” requests for the ongoing military disasters in Iraq and Afghanistan. Even the official budget, however, includes staggering sums for procuring major new weapons systems and for R&D leading to ever more such big-ticket items in the future. According to Steve Kosiak, vice president of budget studies at the Center for Strategic and Budgetary Assessments, “The fiscal year 2009 budget may be about as good as it gets for defense contractors.” When all is said and done, this will probably be a trillion dollar “defense” budget.

As it happens, military budgets like this have a multiplier effect globally. After all, there’s no such thing as a one-nation arms race. It’s just that no one here thinking about what we’re about to feed the Pentagon pays much attention to such things. Fortunately, John Feffer, an expert on military policy and Asia, has been doing just that. He is the co-director of a particularly interesting website, Foreign Policy In Focus at the Institute for Policy Studies in Washington — with which Tomdispatch hopes to collaborate on projects in the future. (To subscribe to FPIF’s e-news service, click here.) In the following piece, he brings genuine arms-race news to all of us. Yes, Virginia, there is indeed an arms race underway; it’s taking off in Northeast Asia; and it’s dangerous. Tom

Asia’s Hidden Arms Race

Six Countries Talk Peace While Preparing for War
By John Feffer

Read all about it! Diplomats remain upbeat about solving the nuclear stand-off with North Korea; optimists envision a peace treaty to replace the armistice that halted, but failed to formally end, the Korean War 55 years ago. Some leaders and scholars are even urging the transformation of the Six Party Talks over the Korean nuclear issue, involving the United States, Japan, China, Russia, and the two Koreas, into a permanent peace structure in Northeast Asia.

The countries in the region all seem determined to make nice right now. Yasuo Fukuda, the new Japanese prime minister, is considerably more pacific than his predecessor, the ultra-nationalist Shinzo Abe. The new South Korean president, Lee Myung-bak, despite his conservative credentials, is committed to continuing the previous president’s engagement policy with North Korea and plans to reach out to Japan via his first post-inaugural state visit. The party that won the recent Taiwanese parliamentary elections, the Kuomintang, wants to rebuild bridges to the Mainland and, when it comes to the Communist Party there, mend fences the ruling Democratic Progressive Party tried to pull down. Beijing, for its part, is being super-conciliatory toward practically everyone in this Olympic year.

Despite all this peace-talk, something else, quite momentous and hardly noticed, is underway in the region. The real money in Northeast Asia is going elsewhere. While in the news sunshine prevails, in the shadows an already massive regional arms race is threatening to shift into overdrive. Since the dawn of the twenty-first century, five of the six countries involved in the Six Party Talks have increased their military spending by 50% or more. The sixth, Japan, has maintained a steady, if sizeable military budget while nonetheless aspiring to keep pace. Every country in the region is now eagerly investing staggering amounts of money in new weapons systems and new offensive capabilities.

The arms race in Northeast Asia undercuts all talk of peace in the region. It also sustains a growing global military-industrial complex. Northeast Asia is where four of the world’s largest militaries — those of the United States, China, Russia, and Japan — confront each other. Together, the countries participating in the Six Party Talks account for approximately 65% of world military expenditures, with the United States responsible for roughly half the global total.

Here is the real news that should hit the front pages of papers today: Wars grip Iraq, Afghanistan, and large swathes of Africa, but the heart of the global military-industrial complex lies in Northeast Asia. Any attempt to drive a stake through this potentially destabilizing monster must start with the militaries that face one another there.

The Japanese Reversal

The Northeast Asian arms buildup — a three-tiered scramble to dominate the seas, beef up air forces, and control the next frontier of space — runs counter to conventional wisdom. After all, isn’t Japan still operating under a “peace constitution”? Hasn’t South Korea committed to the peaceful reunification of the Korean peninsula? Didn’t China recently wake up to the virtues of soft power? And how could North Korea and Russia, both of which suffered disastrous economic reversals in the 1990s, have had the wherewithal to compete in an arms race? As it turns out, these obstacles have proved little more than speed bumps on the road to regional hyper-militarism.

Perhaps the most paradoxical participant in this new arms race is Japan. Its famous peace constitution has traditionally been one of the few brakes on arms spending in the region. The country has long limited its military expenditures to an informal ceiling of 1% of its overall budget. As that budget grew, however, so did military spending. Japan’s army is now larger than Britain’s, and the country spends more on its military than all but four other nations. (China surpassed Japan in military spending for the first time in 2006.) Nonetheless, for decades, the provisions of its peace constitution at least put limits on the offensive capabilities of the Japanese military, which is still referred to as its Self-Defense Forces.

These days, however, even the definition of “offensive” is changing. In 1999, the country’s Self Defense Forces first used offensive force when its naval vessels fired on suspected North Korean spy ships. Less than a decade later, Japan provides support far from its “defensive” zone for U.S. wars, including providing fuel to coalition forces in Afghanistan and transport in Iraq.

Japan was once incapable of bombing other countries largely because its air force didn’t have an in-air refueling capability. Thanks to Boeing, however, the first KC-767 tanker aircraft will arrive in Japan later this year, providing government officials, who occasionally assert the country’s right to launch preemptive strikes, with the means to do so. This is not happy news for Japan’s neighbors, who retain vivid memories of the 1930s and 1940s, when its military went on an imperial rampage throughout the region.

Tokyo already has among the best air forces and naval fighting forces in the world, trailing only the United States. But leading Japanese officials have displayed an even larger appetite. Some Japanese politicians are lobbying to amend the peace constitution or even scrap it entirely, while sending military spending skyrocketing. To promote these ideas, they use the thin rationale that Japan should be participating regularly in “international peacekeeping missions.”

The Japanese Defense Agency — their Pentagon — which was upgraded to ministry level last year, wants more goodies like an aircraft carrier, nuclear-powered submarines, and long-range missiles. A light aircraft carrier, which the government has coyly labeled a “destroyer,” will be ready in 2009. The subs and missiles, however, will have to wait. So, too, will Tokyo’s attempt to take a quantum leap forward in air-fighting capabilities by importing advanced U.S. F-22 stealth planes. Concerned about releasing latest-generation technology to the outside world, Congress scotched this deal at the last moment in August 2007.

Washington has been a good deal more accommodating when it comes to missile defense. Japan has been a far more enthusiastic supporter of missile defense than any of America’s European allies. In fact, the United States and Japan are spending billions of dollars to set up an early-warning-and-response prototype of such an advanced missile system. Part of this missile shield is land-based. Last month, Japan installed its third Patriot Advanced Capability-3 (PAC-3) surface-to-air interceptor and plans on nine more by 2011. The more ambitious part of the program, however, is based at sea. In December, Japan conducted its first sea-based interceptor test.

With Japan and the United States in the lead, a space race is also on in Northeast Asia. Last year, China tested its own anti-ballistic missile system by shooting down one of its old weather satellites. While at present this is far from an actual missile-defense system, China effectively served notice that it is up to the technological challenge of hitting a bullet with a bullet in space. Meanwhile, thanks to U.S. pressure Russia too is upgrading its missile defense systems, while pouring money into the development of new missiles that can bypass any putative shield the U.S. and its allies can develop.

Give Me Peace, But Not Just Yet

The two most recent South Korean presidents, Nobel Peace Prize winner Kim Dae-Jung and the left-leaning Roh Moo-Hyun, have been well-known for their efforts to foster reconciliation with North Korea. Less well-known have been their programs to beef up South Korea’s military. The dark side of their engagement policy has been its unstated quid pro quo of satisfying the security concerns of South Korean hawks by giving their military everything it wants — and then some. Between 1999 and 2006, South Korean military spending jumped more than 70%. In 2007, at the launching ceremony for a new Aegis-equipped destroyer, which brought South Korea into an elite club of just five countries with such technology, President Roh Moo-Hyun declared, “At the present time, Northeast Asia is still in an arms race, and we cannot just sit back and watch.” By 2020, the South Korean navy wants to build three more Aegis destroyers at a cost of $1 billion each.

South Korean hawks are not only responding to concerns about North Korea, the traditional threat around which the South has organized its military. They are concerned about a declining military commitment from the United States, which has reduced the levels of American troops that traditionally garrison the country and pushed hard for greater military “burden-sharing.”

South Korea’s leaders and military officials are anxious that the Pentagon may continue to focus on the Middle East and Central Asia to the exclusion of its Pacific commitments. To prepare for the contingency of going it alone, South Korea has embarked on an ambitious $665 billion Defense Reform 2020 initiative, which will increase the military budget by roughly 10% a year until 2020. In those years, while troop levels will actually fall, most of the extra money will go to a host of expensive, high-tech systems such as new F-15K fighters from Boeing, SM-6 ship-to-air missiles that can form a low-altitude missile shield, and Global Hawk unmanned aerial vehicles.

If South Korea’s spending spree remains largely under the radar, China’s military expenditures have received considerable media scrutiny. Newspaper accounts have focused on China’s military spending, which officially rose to $45 billion for 2007. However, that public figure, according to U.S. intelligence estimates, tells only half the story. Beijing’s spending, claim these sources, is really in the $100 billion range. With this money, China is pushing forward with an ambitious naval program that will include the addition to its naval forces of five new nuclear-powered attack subs, a mid-sized aircraft carrier, and — clandestinely — the supposed construction of a huge 93,000-ton nuclear-powered carrier by 2020.

Lost in the hype around China’s apparent quest for a world-class military to match its world-class economy are the gaps in the country’s offensive capabilities. It has only a couple of hundred nuclear weapons and fewer than two dozen ICBMs pointed at the United States. Its navy doesn’t have a “blue-water” capability, lacking (as yet) any aircraft carriers, a large force of nuclear-powered submarines, and the overseas basing infrastructure to support them. It relies heavily on imports and can’t yet build the sort of aircraft that would allow it to project serious force over large distances.

China, however, has been the only modestly credible threat on the horizon that the Pentagon has been able to wield to justify military spending at levels not seen since World War II. The Pentagon can’t use its big naval destroyers against al-Qaeda; Virginia-class subs can’t do much to fight the Taliban or insurgents in Iraq. Yet these systems figure prominently in the Pentagon’s long-range plans to build a 313-ship navy. Congressman John Murtha (D-PA), who made headlines back in 2005 with his newfound opposition to the Iraq War, is typical of congressional hawks when he warns of the need to prepare for a coming conflict with China. “We’ve got to be able to have a military that can deploy to stop China or Russia or any other country that challenges us,” he recently told Reuters. “I’ve felt we had to be concerned about the direction China was going.” To counter China, the United States has pursued a classic containment strategy of strengthening military ties with India, Australia, the Philippines, and Japan.

The Bush administration trumpets its accomplishment of increasing military spending 74% since 2001. In addition to the $12.7 billion for new warships, there’s $17 billion for new aircraft and over $10 billion for missile defense. The administration wants to increase the Army from 482,400 to 547,400 troops by 2012. A sizable portion of the administration’s $607 billion Pentagon budget request for 2009, which doesn’t even include massive supplemental funding for the wars in Iraq and Afghanistan, will go to maintaining and expanding the U.S. military presence in the Pacific. The Democratic frontrunners for the presidential nomination have also called for troop increases and have said nothing about slowing, freezing, or even cutting the military budget. No matter who is elected, under the next administration, as under the last one, the United States will surely continue to be the chief driver of global arms spending.

The Armies of Austerity

Increased military spending is not always just a function of affluence. As the Russian economy contracted in the 1990s, the arms export industry became an ever more critical way for the faltering country to earn hard currency. Today, flush with oil and natural gas revenues, Russia has regained its place as the world’s second largest arms dealer by almost doubling its arms exports since 2000. Washington’s moves to establish a global missile defense system and encroach on Russian interests in Central Asia have only encouraged Moscow to boost its military spending in an effort to recover its lost superpower status.

With the renewed growth of the Russian economy on the strength of energy sales, Russian arms expenditures began to take off again in the new millennium, increasing nearly four-fold between 2000 and 2006. The Russian government, which projected a 29% increase in spending for 2007, plans to replace nearly half its arsenal with new weaponry by 2015.

Compared to Russia, North Korea has had the full experience of economic collapse with very little subsequent recovery. Yet, despite its woefully limited means, it has tried to keep up with the great powers that surround it. By many estimates, Pyongyang devotes as much as a quarter of its budget to the military (even though prosperous South Korea still spends as much, or more, on its military than the North’s entire gross domestic product). North Korea’s failure to match the conventional military spending of South Korea, much less Japan or the United States, was what made the building of a “nuclear deterrent” increasingly attractive to its leaders. In other words, the current nuclear crisis that sucks up so much diplomatic attention in Northeast Asia today is at least partly a result of the region’s accelerating conventional arms race and North Korea’s inability to keep pace.

Critics of the North Korean regime often point out that its military spending is ultimately a human rights violation, because the government essentially takes food out of the mouths of its people to spend on armaments. North Korea is, however, just a particularly gross example of an expanding global problem. Each of the six countries in the new Pacific arms race has devised a wealth of rationales for its military spending — and each has ignored significant domestic needs in the process.

Given the sums that would be necessary to address the decommissioning of nuclear weapons, the looming crisis of climate change, and the destabilizing gap between rich and poor, such spending priorities are in themselves a threat to humanity. The world put 37% more into military spending in 2006 than in 1997. If the “peace dividend” that was to follow the end of the Cold War never quite appeared, a decade later the world finds itself burdened with quite the opposite: a genuine peace deficit.

John Feffer is the co-director of Foreign Policy In Focus at the Institute for Policy Studies in Washington, DC. He is the author of North Korea, South Korea: U.S. Policy at a Time of Crisis (Seven Stories, 2003) among other books.

Copyright 2008 John Feffer