Covid-proof: World spent "record" $2.1 trillion on military in 2021

World military expenditure grew for the seventh year in a row in 2021, passing the $2 trillion mark for the first time in history despite being the second year of the pandemic, according to the latest report by the Stockholm International Peace Research Institute (SIPRI).

In total, global defence spending hit $2.113 trillion (€1.95 trillion) last year, 0.7% more than in 2020, and 12% more than in 2012, the think tank said.

The United States and China accounted for more than half of total spending at 38% and 14% respectively, with India at 3.6%, the UK at 3.2% and Russia at 3.1% making up the rest of the top five big military spenders.

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"Even amid the economic fallout of the Covid-19 pandemic, world military spending hit record levels," said Dr Diego Lopes da Silva, Senior Researcher with SIPRI’s Military Expenditure and Arms Production Programme.

"There was a slowdown in the rate of real-terms growth due to inflation. In nominal terms, however, military spending grew by 6.1%."

Due to the sharp economic recovery experienced last year, however, the global military burden - total global military expenditure as a share of gross domestic product (GDP) - did actually drop by 0.1%, from 2.3% in 2020 to 2.2% in 2021.

While US spending was far higher than any other country, its actual expenditure of $801 billion was 1.4% less than the previous year. SIPRI put this down to an overall decline in US expenditure on research and development, though added that Washington remained focused on next-generation technology development.

"The increase in R&D spending over the decade 2012–21 suggests that the United States is focusing more on next-generation technologies," said Alexandra Marksteiner, Researcher with SIPRI’s Military Expenditure and Arms Production Programme. "The US Government has repeatedly stressed the need to preserve the US military’s technological edge over strategic competitors."

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The second-biggest military spender was China at an estimated $293 billion - 4.7% more than in 2020 - and the 27th consecutive year of growth. 

Nearby Japan also spent 7.3% more than the previous year - a total of $54.1 billion - as the country begins to move away from its post-war approach amid rising tensions both regionally and internationally.

"China’s growing assertiveness in and around the South and the East China seas have become a major driver of military spending in countries such as Australia and Japan," said SIPRI Senior Researcher Dr Nan Tian. 

Australian spending also increased in 2021, by 4%, reaching $3.1 billion.

India, with military spending of $76.6 billion, up by 0.9% from 2020 ranked third highest. In a push to strengthen its domestic arms industry, 64% of India's outlays in the military budget were earmarked for arms acquisitions within the country.

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The report also found that Russia had boosted its military spending by 2.9% in 2021 for the third year in a row - 4.1% of GDP - just as it was building up its forces along the Ukrainian border. The increase was largely due to record high oil and gas revenues, it was found.

"High oil and gas revenues helped Russia to boost its military spending in 2021. Russian military expenditure had been in decline between 2016 and 2019 as a result of low energy prices combined with sanctions in response to Russia’s annexation of Crimea in 2014," said Lucie Béraud-Sudreau, Director of SIPRI’s Military Expenditure and Arms Production Programme.

Russia's ‘national defence’ budget line, which accounts for around three-quarters of Russia’s total military spending and includes funding for operational costs as well as arms procurement, was revised upwards over the course of the year. The final figure was $48.4 billion, 14% higher than had been budgeted at the end of 2020.

As it has strengthened its defences against Russia in the years following the 2014 annexation of Crimea, Ukrainian military spending has risen by 72%. Spending fell in 2021, to $5.9 billion, but still accounted for 3.2% of the country’s GDP.

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The SIPRI report also found that just eight NATO member states reached the Alliance's target of spending 2% or more of GDP on defence. The issue has been the root of trans-Atlantic tensions, especially during the Presidential tenure of Donald Trump.

The UK spend a total of $68.4 billion in 2021, up 3% from the previous year and the fourth consecutive year of growth. At 2.2% of GDP, the UK did make the NATO target. Other countries to surpass the 2% goal included the US (3.5%), Turkey (2.1%), Poland (2.1%), Greece (3.9%) and Romania (2.0%).

The report added that in response to Russia's invasion of Ukraine in February 2022, a number of NATO countries including Belgium, Denmark, Germany, Lithuania, the Netherlands and Norway, had announced plans to increase military expenditure. 

SIPRI added that the acquisition of new weapon systems will "probably be at the heart" of the plans. 

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