Asia Defense Spending: 2000-2011
Asia Defense Spending: 2000-2011 October 15, 2012
Outline • Methodology • Macro Trends • Trends for China, India, Japan, South Korea, and Taiwan • Defense Spending Categories • Key Findings and Areas for Further Research
2
Methodology • Report covers China, India, Japan, South Korea, and Taiwan • Top 5 defense spenders in Asia (not including Russia and Australia) • Capture 87 percent of Asian defense spending in 2011
• Primary source: national government documents • Standardized defense spending categories • See report’s methodology section for more details 3
MACRO TRENDS
Total Defense Spending Spending (in billions of constant 2011 US$)
100 90 80 70 60
50 40 30 20 10 0
China
India
Japan
South Korea
Taiwan
Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; analysis by CSIS DefenseIndustrial Initiatives Group.
5
Indexed Total Defense Spending Constant 2011 LCU
4.5
4.5
4
4
3.5
3.5
Indexed changes in spending
Indexed changes in spending
Constant 2011 USD
3 2.5 2 1.5
3 2.5 2 1.5
1
1
0.5
0.5
0
0
China
India
South Korea
Taiwan
Japan
Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; analysis by CSIS DefenseIndustrial Initiatives Group.
6
CAGRs for Total Defense Spending in Constant 2011 U.S. Dollars Defense Spending CAGR Countries 2000-2005
2005-2011
2000-2011
China
12.1%
14.5%
13.4%
India
2.2%
4.8%
3.6%
Japan
0.6%
6.0%
3.5%
South Korea
6.9%
3.0%
4.8%
Taiwan
-1.2%
4.3%
1.8%
Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; analysis by CSIS DefenseIndustrial Initiatives Group.
7
Per-Soldier Defense Spending Per-soldier spending (in thousands of constant 2011 US$)
300
250
200
150
100
50
0
China
India
Japan
South Korea
Taiwan
Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; IISS Military Balance; analysis by CSIS Defense-Industrial Initiatives Group.
8
Per-Soldier Defense Spending Per-soldier spending (in thousands of constant 2011 US$)
60
50
40
30
20
10
0
China
India
South Korea
Taiwan
Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; IISS Military Balance; analysis by CSIS Defense-Industrial Initiatives Group.
9
CAGRs for Total and Per-Soldier Defense Spending in Constant 2011 U.S. Dollars Defense Spending 2000-2011 CAGR Countries
Total
Per-Soldier
China
13.4%
13.2%
India
3.6%
3.5%
Japan
3.5%
3.1%
South Korea
4.8%
5.2%
Taiwan
1.8%
4.0%
Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; IISS Military Balance; analysis by CSIS Defense-Industrial Initiatives Group.
10
TRENDS FOR CHINA, INDIA, JAPAN, SOUTH KOREA, AND TAIWAN
China 160
160
140
140
120
120
100
100
80
80
60
60
40
40
20
20
0
0
SIPRI
Defense Spending
SIPRI
Per soldier spending (constant 2011, in US thousands)
Spending (constant 2011, in US billions)
Total and Per-Soldier Defense Spending
Spending per Soldier
Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; IISS Military Balance; SIPRI Military Expenditure Database; analysis by CSIS Defense-Industrial Initiatives Group.
12
China 100%
Distribution of Total Defense Spending by Category
90% 80%
32.2
34.3
33.8
33.9
33.8
32.2
33.3
32.2
34.2
33.7
34.3
33.6
32.6
34.0
33.2
33.7
33.6
32.0
31.9
32.5
33.6
33.8
33.5
34.0
70% 60% 50% 40% 30% 20% 10% 0%
Personnel
O&M
Defense Investment
Note: 2008 breakdown data was provided by China to the United Nations and republished in the U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; SIPRI Military Expenditure Database; analysis by CSIS Defense-Industrial Initiatives Group.
13
India 100
35
90 30 80 25
70 60
20
50 15
40 30
10
20 5 10 0
Per-soldier spending (in thousands of constant 2011 US$)
Spending (in billions of constant 2011 US$)
Total and Per-Soldier Defense Spending
0
Defense Spending
Spending per Soldier
Sources: Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; IISS Military Balance; analysis by CSIS Defense-Industrial Initiatives Group.
14
India Distribution of Total Defense Spending by Category 100% 90% 80%
2.6
3.0
2.8
5.2
5.7
5.6
2.4 2.0
26.5
23.6
24.9
33.2
1.3 2.8
1.7 3.7
1.7 3.3
1.8
39.0
36.2
36.4
36.2
3.5
1.7 3.3
1.5
1.5
1.6
3.4
4.1
3.5
31.9
31.3
35.8
33.2
70% 60% 50% 40%
35.0
38.2
40.1
43.2
32.0 33.2
35.3
35.5
34.8
23.6
23.2
23.1
23.6
26.9 26.2
26.8
30% 20% 10%
24.0
26.7
28.0
27.5
31.1
36.9
32.3
35.0
0%
Personnel
O&M
Defense Procurement
Defense R&D
Other
Sources: Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; analysis by CSIS Defense-Industrial Initiatives Group.
15
Japan Total and Per-Soldier Defense Spending 300
90 250
80 70
200
60 50
150
40 100
30 20
50
10 0
Per-soldier spending (in thousands of constant 2011 US$)
Spending (in billions of constant 2011 US$)
100
0
Defense Spending
Spending per Soldier
Sources: Japanese MoD White Papers, 2005-2011; IISS Military Balance; analysis by CSIS Defense-Industrial Initiatives Group.
16
Japan Distribution of Total Spending Defense Spending by Category 100% 90%
1.7
1.8
1.8
1.7
1.6
1.5
1.6
1.6
2.7
1.6 2.6
3.0
3.5
2.7
3.6
3.0
3.6
2.5
3.4
1.7 1.8
18.6
18.6
18.6
18.3
18.1
18.6
17.9
18.1
17.2
17.5
16.5
16.7
32.6
32.0
32.1
32.0
32.2
32.2
32.2
33.4
33.3
34.2
34.0
34.9
44.8
45.1
45.1
45.0
44.4
44.6
44.6
44.0
44.4
44.2
44.5
44.9
1.6 2.4
1.6
80% 70% 60% 50% 40% 30% 20% 10% 0%
Personnel
O&M
Procurement
Sources: Japanese MoD White Papers, 2005-2011; analysis by CSIS Defense-Industrial Initiatives Group.
R&D
Other
17
South Korea 100
50
90
45
80
40
70
35
60
30
50
25
40
20
30
15
20
10
10
5
0
0
Defense Spending
Per-soldier spending (in thousands of constant 2011 US$)
Spending (in billions of constant 2011 US$)
Total and Per-Soldier Defense Spending
Spending per Soldier
Sources: South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; IISS Military Balance; analysis by CSIS Defense-Industrial Initiatives Group.
18
South Korea Distribution of Total Defense Spending by Category 100%
5.1
4.5
4.7
4.1
4.1
4.3
4.7
31.8
29.4
28.8
28.6
29.1
30.3
28.6
24.0
23.7
24.0
24.6
24.7
25.8
42.1
42.8
43.3
42.2
40.7
40.9
5.1
5.4
5.6
6.1
22.1
23.4
24.6
24.7
27.5
27.3
28.1
28.2
28.3
45.2
43.8
41.7
41.0
40.8
90% 80%
30.9
70% 60% 50%
24.7
40% 30% 20%
38.3
10% 0%
Personnel
O&M
Defense Procurement
Defense R&D
Defense Investment
Sources: South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; analysis by CSIS Defense-Industrial Initiatives Group.
19
Taiwan 12
60
10
50
8
40
6
30
4
20
2
10
0
0
Defense Spending
Per-soldier spending (in thousands of constant 2011 US$)
Spending (in billions of constant 2011 US$)
Total and Per-Soldier Defense Spending
Spending per Soldier
Sources: Taiwanese National Defense Report, 2009 and 2011; IISS Military Balance; analysis by CSIS Defense-Industrial Initiatives Group.
20
Taiwan Distribution of Total Defense Spending by Category 2.5
4.0
3.8
2.4
1.9
1.8
1.9
22.7
23.3
21.0
20.6
25.4
23.2
21.5
100% 90%
80% 70% 60%
20.8
21.1
20.5
20.4
22.5
19.6
1.5
28.5
1.4
35.9
1.5
1.6
1.5
28.4
28.1
27.7
24.9
23.2
45.5
47.5
19.6 24.6
30.1 24.8
50% 40% 30%
54.0
51.6
54.7
56.6
50.2
55.3
57.0 45.4
20%
37.9
40.0
10% 0%
Personnel
O&M
Defense Investment
Sources: Taiwanese National Defense Report, 2009 and 2011; analysis by CSIS Defense-Industrial Initiatives Group.
Other
21
DEFENSE BUDGET CATEGORIES
Defense Investment Spending as a Share of Total Defense Spending 50% 45% 40% 35% 30%
25% 20% 15% 10% 5% 0% 2000
2001
2002
2003 China
2004 India
2005 Japan
2006
2007 South Korea
2008
2009
2010
2011
Taiwan
Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; analysis by CSIS DefenseIndustrial Initiatives Group.
23
CAGRs for Total Defense and Defense Investment Spending in Constant 2011 U.S. Dollars Defense Spending 2000-2011 CAGR Countries Total
Defense Investment
China
15.1%*
15.1%*
India
3.6%
3.2%
Japan
3.5%
2.3%
South Korea
4.8%
3.1%
Taiwan
1.8%
3.6%
*Note: For China, CAGRs are for 2000 - 2009. Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; analysis by CSIS DefenseIndustrial Initiatives Group.
24
Personnel Spending as a Share of Total Defense Spending 60%
50%
40%
30%
20%
10%
0% 2000
2001
2002
2003 China
2004 India
2005 Japan
2006
2007 South Korea
2008
2009
2010
2011
Taiwan
Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; analysis by CSIS DefenseIndustrial Initiatives Group.
25
CAGRs for Total Defense and Personnel Spending in Constant 2011 U.S. Dollars Defense Spending 2000-2011 CAGR Countries Total
Personnel
China
15.1%*
15.3%*
India
3.6%
7.2%
Japan
3.5%
3.5%
South Korea
4.8%
5.4%
Taiwan
1.8%
0.6%
*Note: For China, CAGRs are for 2000 - 2009. Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; analysis by CSIS DefenseIndustrial Initiatives Group.
26
Operations and Maintenance Spending as a Share of Total Defense Spending 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 2000
2001
2002
2003 China
2004 India
2005 Japan
2006
2007 South Korea
2008
2009
2010
2011
Taiwan
Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; analysis by CSIS DefenseIndustrial Initiatives Group.
27
CAGRs for Total Defense and Operations and Maintenance Spending in Constant 2011 U.S. Dollars Defense Spending 2000-2011 CAGR Countries Total
O&M
China
15.1%*
14.9%*
India
3.6%
1.1%
Japan
3.5%
4.1%
South Korea
4.8%
6.1%
Taiwan
1.8%
2.8%
*Note: For China, CAGRs are for 2000 - 2009. Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; analysis by CSIS DefenseIndustrial Initiatives Group.
28
Defense Research and Development Spending as a Share of Total Defense Spending 7% 6% 5% 4% 3% 2% 1% 0% 2000
2001
2002
2003
2004
2005 India
2006 Japan
2007
2008
2009
2010
2011
South Korea
Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; analysis by CSIS DefenseIndustrial Initiatives Group.
29
CAGRs for Total Defense and Defense Research and Development Spending in Constant 2011 U.S. Dollars Defense Spending 2000-2011 CAGR Countries Total
Defense R&D
India
3.6%
0.0%
Japan
3.5%
0.8%
South Korea
4.5%*
6.3%*
*Note: For South Korea, the R&D spending CAGR is for 2000 - 2010. Sources: Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; analysis by CSIS Defense-Industrial Initiatives Group.
30
KEY FINDINGS AND AREAS FOR FURTHER RESEARCH
Accelerated Defense Spending Growth Defense Spending CAGR
Aggregate values
2000-2005
2005-2011
2000-2011
4.5%
8.0%
6.4%
• Growth accelerated in second half of the decade • Growth primarily driven by Personnel and O&M accounts
Will accelerated growth continue or slow down? Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; analysis by CSIS DefenseIndustrial Initiatives Group.
32
Prioritizing Quantity over Quality Top 10 Global Defense Spenders
2011 Troop Numbers
1. USA
1,569,417
2. China
2,285,000
3. Russia
956,000
4. United Kingdom
174,030
5. France
238,591
6. Japan
247,746
7. Saudi Arabia
233,000
8. India
1,325,000
9. Germany
251,465
10. Brazil
318,480
Sources: SIPRI Yearbook 2012; IISS Military Balance.
• Comparatively low persoldier spending levels in all countries (except Japan)
Future force structure reductions or continued emphasize on size? 33
Areas for Further Research • Expanding the geographical scope • Assessing defense trade patterns • Analyzing regulatory frameworks governing defense • Mapping and evaluating the defense industrial base
34
QUESTIONS? COMMENTS? Email: [email protected]
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Outline • Methodology • Macro Trends • Trends for China, India, Japan, South Korea, and Taiwan • Defense Spending Categories • Key Findings and Areas for Further Research
2
Methodology • Report covers China, India, Japan, South Korea, and Taiwan • Top 5 defense spenders in Asia (not including Russia and Australia) • Capture 87 percent of Asian defense spending in 2011
• Primary source: national government documents • Standardized defense spending categories • See report’s methodology section for more details 3
MACRO TRENDS
Total Defense Spending Spending (in billions of constant 2011 US$)
100 90 80 70 60
50 40 30 20 10 0
China
India
Japan
South Korea
Taiwan
Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; analysis by CSIS DefenseIndustrial Initiatives Group.
5
Indexed Total Defense Spending Constant 2011 LCU
4.5
4.5
4
4
3.5
3.5
Indexed changes in spending
Indexed changes in spending
Constant 2011 USD
3 2.5 2 1.5
3 2.5 2 1.5
1
1
0.5
0.5
0
0
China
India
South Korea
Taiwan
Japan
Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; analysis by CSIS DefenseIndustrial Initiatives Group.
6
CAGRs for Total Defense Spending in Constant 2011 U.S. Dollars Defense Spending CAGR Countries 2000-2005
2005-2011
2000-2011
China
12.1%
14.5%
13.4%
India
2.2%
4.8%
3.6%
Japan
0.6%
6.0%
3.5%
South Korea
6.9%
3.0%
4.8%
Taiwan
-1.2%
4.3%
1.8%
Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; analysis by CSIS DefenseIndustrial Initiatives Group.
7
Per-Soldier Defense Spending Per-soldier spending (in thousands of constant 2011 US$)
300
250
200
150
100
50
0
China
India
Japan
South Korea
Taiwan
Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; IISS Military Balance; analysis by CSIS Defense-Industrial Initiatives Group.
8
Per-Soldier Defense Spending Per-soldier spending (in thousands of constant 2011 US$)
60
50
40
30
20
10
0
China
India
South Korea
Taiwan
Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; IISS Military Balance; analysis by CSIS Defense-Industrial Initiatives Group.
9
CAGRs for Total and Per-Soldier Defense Spending in Constant 2011 U.S. Dollars Defense Spending 2000-2011 CAGR Countries
Total
Per-Soldier
China
13.4%
13.2%
India
3.6%
3.5%
Japan
3.5%
3.1%
South Korea
4.8%
5.2%
Taiwan
1.8%
4.0%
Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; IISS Military Balance; analysis by CSIS Defense-Industrial Initiatives Group.
10
TRENDS FOR CHINA, INDIA, JAPAN, SOUTH KOREA, AND TAIWAN
China 160
160
140
140
120
120
100
100
80
80
60
60
40
40
20
20
0
0
SIPRI
Defense Spending
SIPRI
Per soldier spending (constant 2011, in US thousands)
Spending (constant 2011, in US billions)
Total and Per-Soldier Defense Spending
Spending per Soldier
Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; IISS Military Balance; SIPRI Military Expenditure Database; analysis by CSIS Defense-Industrial Initiatives Group.
12
China 100%
Distribution of Total Defense Spending by Category
90% 80%
32.2
34.3
33.8
33.9
33.8
32.2
33.3
32.2
34.2
33.7
34.3
33.6
32.6
34.0
33.2
33.7
33.6
32.0
31.9
32.5
33.6
33.8
33.5
34.0
70% 60% 50% 40% 30% 20% 10% 0%
Personnel
O&M
Defense Investment
Note: 2008 breakdown data was provided by China to the United Nations and republished in the U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; SIPRI Military Expenditure Database; analysis by CSIS Defense-Industrial Initiatives Group.
13
India 100
35
90 30 80 25
70 60
20
50 15
40 30
10
20 5 10 0
Per-soldier spending (in thousands of constant 2011 US$)
Spending (in billions of constant 2011 US$)
Total and Per-Soldier Defense Spending
0
Defense Spending
Spending per Soldier
Sources: Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; IISS Military Balance; analysis by CSIS Defense-Industrial Initiatives Group.
14
India Distribution of Total Defense Spending by Category 100% 90% 80%
2.6
3.0
2.8
5.2
5.7
5.6
2.4 2.0
26.5
23.6
24.9
33.2
1.3 2.8
1.7 3.7
1.7 3.3
1.8
39.0
36.2
36.4
36.2
3.5
1.7 3.3
1.5
1.5
1.6
3.4
4.1
3.5
31.9
31.3
35.8
33.2
70% 60% 50% 40%
35.0
38.2
40.1
43.2
32.0 33.2
35.3
35.5
34.8
23.6
23.2
23.1
23.6
26.9 26.2
26.8
30% 20% 10%
24.0
26.7
28.0
27.5
31.1
36.9
32.3
35.0
0%
Personnel
O&M
Defense Procurement
Defense R&D
Other
Sources: Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; analysis by CSIS Defense-Industrial Initiatives Group.
15
Japan Total and Per-Soldier Defense Spending 300
90 250
80 70
200
60 50
150
40 100
30 20
50
10 0
Per-soldier spending (in thousands of constant 2011 US$)
Spending (in billions of constant 2011 US$)
100
0
Defense Spending
Spending per Soldier
Sources: Japanese MoD White Papers, 2005-2011; IISS Military Balance; analysis by CSIS Defense-Industrial Initiatives Group.
16
Japan Distribution of Total Spending Defense Spending by Category 100% 90%
1.7
1.8
1.8
1.7
1.6
1.5
1.6
1.6
2.7
1.6 2.6
3.0
3.5
2.7
3.6
3.0
3.6
2.5
3.4
1.7 1.8
18.6
18.6
18.6
18.3
18.1
18.6
17.9
18.1
17.2
17.5
16.5
16.7
32.6
32.0
32.1
32.0
32.2
32.2
32.2
33.4
33.3
34.2
34.0
34.9
44.8
45.1
45.1
45.0
44.4
44.6
44.6
44.0
44.4
44.2
44.5
44.9
1.6 2.4
1.6
80% 70% 60% 50% 40% 30% 20% 10% 0%
Personnel
O&M
Procurement
Sources: Japanese MoD White Papers, 2005-2011; analysis by CSIS Defense-Industrial Initiatives Group.
R&D
Other
17
South Korea 100
50
90
45
80
40
70
35
60
30
50
25
40
20
30
15
20
10
10
5
0
0
Defense Spending
Per-soldier spending (in thousands of constant 2011 US$)
Spending (in billions of constant 2011 US$)
Total and Per-Soldier Defense Spending
Spending per Soldier
Sources: South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; IISS Military Balance; analysis by CSIS Defense-Industrial Initiatives Group.
18
South Korea Distribution of Total Defense Spending by Category 100%
5.1
4.5
4.7
4.1
4.1
4.3
4.7
31.8
29.4
28.8
28.6
29.1
30.3
28.6
24.0
23.7
24.0
24.6
24.7
25.8
42.1
42.8
43.3
42.2
40.7
40.9
5.1
5.4
5.6
6.1
22.1
23.4
24.6
24.7
27.5
27.3
28.1
28.2
28.3
45.2
43.8
41.7
41.0
40.8
90% 80%
30.9
70% 60% 50%
24.7
40% 30% 20%
38.3
10% 0%
Personnel
O&M
Defense Procurement
Defense R&D
Defense Investment
Sources: South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; analysis by CSIS Defense-Industrial Initiatives Group.
19
Taiwan 12
60
10
50
8
40
6
30
4
20
2
10
0
0
Defense Spending
Per-soldier spending (in thousands of constant 2011 US$)
Spending (in billions of constant 2011 US$)
Total and Per-Soldier Defense Spending
Spending per Soldier
Sources: Taiwanese National Defense Report, 2009 and 2011; IISS Military Balance; analysis by CSIS Defense-Industrial Initiatives Group.
20
Taiwan Distribution of Total Defense Spending by Category 2.5
4.0
3.8
2.4
1.9
1.8
1.9
22.7
23.3
21.0
20.6
25.4
23.2
21.5
100% 90%
80% 70% 60%
20.8
21.1
20.5
20.4
22.5
19.6
1.5
28.5
1.4
35.9
1.5
1.6
1.5
28.4
28.1
27.7
24.9
23.2
45.5
47.5
19.6 24.6
30.1 24.8
50% 40% 30%
54.0
51.6
54.7
56.6
50.2
55.3
57.0 45.4
20%
37.9
40.0
10% 0%
Personnel
O&M
Defense Investment
Sources: Taiwanese National Defense Report, 2009 and 2011; analysis by CSIS Defense-Industrial Initiatives Group.
Other
21
DEFENSE BUDGET CATEGORIES
Defense Investment Spending as a Share of Total Defense Spending 50% 45% 40% 35% 30%
25% 20% 15% 10% 5% 0% 2000
2001
2002
2003 China
2004 India
2005 Japan
2006
2007 South Korea
2008
2009
2010
2011
Taiwan
Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; analysis by CSIS DefenseIndustrial Initiatives Group.
23
CAGRs for Total Defense and Defense Investment Spending in Constant 2011 U.S. Dollars Defense Spending 2000-2011 CAGR Countries Total
Defense Investment
China
15.1%*
15.1%*
India
3.6%
3.2%
Japan
3.5%
2.3%
South Korea
4.8%
3.1%
Taiwan
1.8%
3.6%
*Note: For China, CAGRs are for 2000 - 2009. Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; analysis by CSIS DefenseIndustrial Initiatives Group.
24
Personnel Spending as a Share of Total Defense Spending 60%
50%
40%
30%
20%
10%
0% 2000
2001
2002
2003 China
2004 India
2005 Japan
2006
2007 South Korea
2008
2009
2010
2011
Taiwan
Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; analysis by CSIS DefenseIndustrial Initiatives Group.
25
CAGRs for Total Defense and Personnel Spending in Constant 2011 U.S. Dollars Defense Spending 2000-2011 CAGR Countries Total
Personnel
China
15.1%*
15.3%*
India
3.6%
7.2%
Japan
3.5%
3.5%
South Korea
4.8%
5.4%
Taiwan
1.8%
0.6%
*Note: For China, CAGRs are for 2000 - 2009. Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; analysis by CSIS DefenseIndustrial Initiatives Group.
26
Operations and Maintenance Spending as a Share of Total Defense Spending 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 2000
2001
2002
2003 China
2004 India
2005 Japan
2006
2007 South Korea
2008
2009
2010
2011
Taiwan
Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; analysis by CSIS DefenseIndustrial Initiatives Group.
27
CAGRs for Total Defense and Operations and Maintenance Spending in Constant 2011 U.S. Dollars Defense Spending 2000-2011 CAGR Countries Total
O&M
China
15.1%*
14.9%*
India
3.6%
1.1%
Japan
3.5%
4.1%
South Korea
4.8%
6.1%
Taiwan
1.8%
2.8%
*Note: For China, CAGRs are for 2000 - 2009. Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; analysis by CSIS DefenseIndustrial Initiatives Group.
28
Defense Research and Development Spending as a Share of Total Defense Spending 7% 6% 5% 4% 3% 2% 1% 0% 2000
2001
2002
2003
2004
2005 India
2006 Japan
2007
2008
2009
2010
2011
South Korea
Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; analysis by CSIS DefenseIndustrial Initiatives Group.
29
CAGRs for Total Defense and Defense Research and Development Spending in Constant 2011 U.S. Dollars Defense Spending 2000-2011 CAGR Countries Total
Defense R&D
India
3.6%
0.0%
Japan
3.5%
0.8%
South Korea
4.5%*
6.3%*
*Note: For South Korea, the R&D spending CAGR is for 2000 - 2010. Sources: Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; analysis by CSIS Defense-Industrial Initiatives Group.
30
KEY FINDINGS AND AREAS FOR FURTHER RESEARCH
Accelerated Defense Spending Growth Defense Spending CAGR
Aggregate values
2000-2005
2005-2011
2000-2011
4.5%
8.0%
6.4%
• Growth accelerated in second half of the decade • Growth primarily driven by Personnel and O&M accounts
Will accelerated growth continue or slow down? Sources: Chinese MoD White Papers, China's National Defense, 2002, 2004, 2006, 2008, 2010; U.S. Department of Defense 2010 Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China; Indian Union Budget and Economic Survey: Expenditure Budget, 2000-2013; Japanese MoD White Papers, 2005-2011; South Korean MoD White Papers, 2000, 2006, 2008, 2010; South Korean MoD; Taiwanese National Defense Report, 2009 and 2011; analysis by CSIS DefenseIndustrial Initiatives Group.
32
Prioritizing Quantity over Quality Top 10 Global Defense Spenders
2011 Troop Numbers
1. USA
1,569,417
2. China
2,285,000
3. Russia
956,000
4. United Kingdom
174,030
5. France
238,591
6. Japan
247,746
7. Saudi Arabia
233,000
8. India
1,325,000
9. Germany
251,465
10. Brazil
318,480
Sources: SIPRI Yearbook 2012; IISS Military Balance.
• Comparatively low persoldier spending levels in all countries (except Japan)
Future force structure reductions or continued emphasize on size? 33
Areas for Further Research • Expanding the geographical scope • Assessing defense trade patterns • Analyzing regulatory frameworks governing defense • Mapping and evaluating the defense industrial base
34
QUESTIONS? COMMENTS? Email: [email protected]
About CSIS At a time of new global opportunities and challenges, the Center for Strategic and International Studies (CSIS) provides strategic insights and policy solutions to decisionmakers in government, international institutions, the private sector, and civil society. A bipartisan, nonprofit organization headquartered in Washington, DC, CSIS conducts research and analysis and develops policy initiatives that look into the future and anticipate change. Founded by David M. Abshire and Admiral Arleigh Burke at the height of the Cold War, CSIS was dedicated to finding ways for America to sustain its prominence and prosperity as a force for good in the world. Since 1962, CSIS has grown to become one of the world’s preeminent international policy institutions, with more than 220 full-time staff and a large network of affiliated scholars focused on defense and security, regional stability, and transnational challenges ranging from energy and climate to global development and economic integration. Former U.S. senator Sam Nunn became chairman of the CSIS Board of Trustees in 1999, and John J. Hamre has led CSIS as its president and chief executive officer since April 2000 CSIS does not take specific policy positions; accordingly, all views expressed in this presentation should be understood to be solely those of the author(s).
