Although Asia today is the centre of attraction for its economic growth, longstanding conflicts that threaten to escalate are prompting some newly rich countries to splurge on defence spending on a scale that used to be associated only with Western powers.
Decades-old disputes involving the Koreas, China, Japan and India are well-known, but even countries that have enjoyed relative peace are not immune. Thailand’s military, for example, remains on alert near the disputed border area around the Preah Vihear temple, the subject of an International Court of Justice hearing last month.
The areas of most concern, however, are territories in the South China Sea claimed by China as well as several Southeast Asian countries; and in the East China Sea where Tokyo and Beijing continue to spar over the islands that the Japanese call Senkaku and the Chinese call Diaoyu. These tensions, as well as the nuclear sabre-rattling by North Korea, are stoking demand for arms and ammunition across the region.
Perhaps it is no surprise, then, that data from the Stockholm International Peace Research Institute (SIPRI) show Asian expenditures on big-ticket defence equipment are rising at a time when the rest of the world is reining in defence spending.
Worldwide military expenditure including armed forces, defence ministries, paramilitary forces and military space activities, declined about 0.5% last year for the first time since 1998. The total, however, still stood at a staggering $1.75 trillion or 2.5% of global gross domestic product, according to the Institute.
North America, especially the United States, cut its expenditures by as much as 6%. Reduced budgets were also seen in Western and Central Europe, as well as some South Asian countries and Oceania.
In contrast, expenditures by some Eastern European countries along with Russia increased by 15.7%, while East and Central Asia along with China spent 7.8% more than they had a year earlier. In the Middle East and North Africa, spending in 2012 was roughly equal to the total of the previous two years, reflecting the seriousness of the conflicts taking place.
“We are seeing what may be the beginning of a shift in the balance of world military spending from the rich Western countries to emerging regions, as austerity policies and the drawdown in Afghanistan reduce spending in the former, while economic growth funds continuing increases elsewhere,” said Dr Sam Perlo-Freeman, director of SIPRI’s Military Expenditure and Arms Production Programme.
China’s overall expenditure of $166 billion, a 7.8% increase from 2011, ranked it second in 2012 behind the United States ($682 billion).
In Southeast Asia, growth in expenditures averaged close to 4% a year over the past decade, though the pace slowed slightly from 2009-12. Indonesia and Vietnam were among the major contributors, reflecting their concern about maritime security as well as their increasing ability to afford higher defence expenditures.
Vietnam’s defence spending last year of $3.36 billion represented 2.4% of its GDP, while China’s expenditure was 2.0% of GDP.
Ongoing tensions over maritime borders, especially in the South China Sea between Vietnam and China, along with purchases of big-ticket hardware, account for the gains in Asean spending. Indonesia, Vietnam and Singapore have already ordered submarines, while Malaysia, Thailand and the Philippines have confirmed plans to acquire more submarines or
The new importance that military expenditure has in Asian economies can be reflected in the export and import statistics of arms transfers tracked by the SIPRI. Arms expenditures are small in the wider context of defence, but still make up $70 billion worldwide.
The role Asia takes in the defence industry is also increasing, with China passing Great Britain to move into fifth place among arms exporters from 2008-12, including a third-place ranking last year.
“China’s rise has been driven primarily by large-scale arms acquisitions by Pakistan,” said Dr Paul Holtom, director of the SIPRI Arms Transfers Programme.
“However, a number of recent deals indicate that China is establishing itself as a significant arms supplier to a growing number of important recipient states.”