21 August 2000 Fact Sheet: World Military Expenditures and Arms Transfers 1998 The following fact sheet summarizes the major findings of the just-released report, World Military Expenditures and Arms Transfers 1998. The report, which is the 27th in the series, was issued on August 21 by the State Department's Bureau of Verification and Compliance. U.S. Department of State Office of the Spokesman August 21, 2000 Fact Sheet: World Military Expenditures And Arms Transfers 1998 Military Expenditures World military spending rose to $842 billion in 1997, a 2% increase over the previous year. This may represent the beginning of an upturn in the world trend, following a 1995-96 low that had fallen 60% from the 1987 peak level. The spending of the developed countries rose slightly in 1997 to $610 billion after bottoming in the previous year at 54% of the 1987-88 peak. Developing country spending, on the other hand, has been growing since 1993-94 and reached a new historic high of $232 billion in 1997. The developing share of world spending was 28%, rising from 17% a decade earlier. Regional shares of world military spending shifted over the 1987-1997 period, as Eastern Europe's share in particular fell from 35 to 8% with the collapse of communism. At the same time, there was over a doubling of the shares of East Asia (from 9 to 21%) and South Asia (0.9 to 2), with growing shares by North America (29 to 34), Western Europe (16 to 22), and South America (1.6 to 2.4%). The OECD countries accounted for 62% of world military spending in 1997, up from 48% a decade earlier. The NATO share rose from 44 to 54%. In the half-decade of 1993-1997, rising spending trends where seen in East Asia, South America, South Asia, and North Africa. The main decline was in Eastern Europe, particularly Russia. United States spending in 1997 made up 33% of the world total, compared to 27% in 1987 and a high of 36% in 1993. This was despite having declining spending trends over the decade as well as the latter half-decade, since the rest of the world declined more rapidly. The world's top 10 military spenders in 1997 were (in billions): United States $276    United Kingdom $35 China - Mainland $  75 (rough estimate)    Germany $33 Russia $  42 (rough estimate)    Italy $23 France $  42    Saudia Arabia $22 Japan $  41    South Korea $15 Arms Imports The world arms trade rose sharply in 1997 to $55 billion, a 23% increase over 1996, following a precipitous drop by nearly one half from the 1987 all-time high of $81.5 billion to $42 billion in 1994 (in 1997 dollars). Most of the previous decline had been in the arms imports of developing countries, whose 1994 bottom was under 40% of its 1987 peak. Developed country arms imports were fairly steady over the decade, with a low in 1995. As a result, the developing and developed shares of world imports went from about 70:30 in 1987 to roughly 50:50 in 1997. Three importing regions - the Middle East, East Asia, and Western Europe - accounted for over 80% of the world trade in 1997. In 1987, their share had been under two-thirds. Middle East imports alone were over one-third of the total in both years; East Asia's share more than doubled to reach 30% in 1997; Western Europe's imports declined moderately. In the three-year 1995-1997 period, the main importing regions and their world share were (in billions of current dollars): Middle East $53.1   38%    North America $5.3   4% East Asia $35.5   25%    South American $4.2   3% Western Europe $25.8   18%    Oceania $4.0   3% In this period, the leading arms importing countries were the following (in billions): Saudi Arabia $31.3    Turkey $4.9 China-Taiwan $12.5    United Kingdom $4.5 Japan $  6.8    South Korea $4.2 Egypt $  5.3    United States $3.8 Kuwait $  5.0    United Arab Emir. $3.8 Arms Exports World arms exports (equal to world arms imports) rose 23% in 1997 to $54.6 billion, or about two-thirds of the all-time high a decade earlier. The increase went mainly to East Asia and the Middle East. The top arms exporting regions in 1997 were North America with 59% of the world total (of which the U.S. had 58%), Western Europe -- 30%, Eastern Europe -- 7%, and East Asia -- 2.5%. By comparison, in 1987 Eastern Europe (mainly the Soviet Union) lead with 44%, North America had 29%, and Western Europe, 19%. In 1995-1997, the main exporting countries were (in billions of current dollars): United States $77.8 55%    Germany $3.8 3% United Kingdom $18.0 13%    Sweden $3.1 2% France $12.0   8%    China -  Mainland $2.4 2% Russia $  9.2   7%    Israel $2.0 1% U.S. exports in this period went mainly (55%) to developed countries, and 24% went to NATO countries. The shares of U.S. exports by recipient region were: Middle East 33%    Oceania 3% Europe 28%    Africa 1% East Asia 27%    South Asia 1% The Americas   4%    Non-Regional 4% The top recipients of U.S. arms exports in 1995-1997 were (in billions): Saudia Arabia $13.7 Turkey $3.1 China-Taiwan $  8.1 Kuwait $2.9 Japan $  6.8 South Korea $2.9 Egypt $  4.6 Israel $2.6 United Kingdom $  4.4 Germany $2.4 The ratio of the number of major weapon imports to the dollar volume of arms imports indicates that developed counties import fewer major weapons and more of other items (parts, accessories, services, etc.) than do developing countries. In terms of the number of major weapons exported during the 1995-1997 period, the U.S. was the primary supplier with 34% of the world total, followed by Russia, 19%, and France, 12%. France was the largest supplier in the 1992-1994 period. Over the 12 year period 1986-1997, the largest supplier of major weapons was the Soviet Union/Russia combination with 29% of the total, followed by France (26%), the United States (13%), China (4%), and the United Kingdom and Germany (3%). The Middle East led in major weapon imports in 1995-1997, followed by Western Europe, East Asia, South America, Sub-Saharan Africa, and South Asia. Other Indicators Countries with the top 10 armed forces in 1997 were (in thousands): China - Mainland 2,600    Turkey 822 United State 1,532    South Korea 670 Russia 1,300    Vietnam 650 India 1,265    Pakistan 610 North Korea 1,100    Iran 575 The world's military burden, as commonly measured by the ratio of military expenditures to GNP, dropped to 2.6% in 1997 from 5.2% a decade earlier. In 1997, it was nearly the same for developed (2.5%) and developing (2.7%) countries. By region it ranged from 7.6% in the Middle East to 1.5% in Central America and the Caribbean. In another measure of burden, the ratio of military expenditures to central government expenditures (which may take better account of a country's ability to finance its military effort), the developed countries by 1997 fell to a smaller burden (9.4%), than the developing countries (13.3%). The Middle East burden of 22.7% was again the highest, while Western Europe had the lowest, 5.5%. The ratio of military expenditures to population, a rough indicator of the cost of military security, dropped nearly in half, from $271 in 1987 to $145 in 1997 for the world. The decline was primarily in developed countries, where it fell from $909 to $525. In developing countries, it fell from $62 to $50. In 1997, 7 of the top 10 countries in terms of this measure were in the Middle East (in dollars per capita): Israel $1,690    Saudi Arabia $1,050 Singapore 1,650    United States 1,030 Kuwait 1,500 United Arab Emir. 1,020 Qatar NA Bahrain 880 Brunei 1,220 Oman 790 The ratio of military expenditures per member of the armed forces may serve as a rough measure of the level of military technology in a country. In terms of this measure, the developed countries have declined from an average of $99,000 per serviceman in 1988 to $85,000 in 1997. The developing country average, on the other hand, rose to a new high of $15,400. In 1997, this measure ranged from a high of $180,000 in the U.S. to under $1,000 in several countries. (Distributed by the Office of International Informational Programs, U.S. Department of State. Web site: http://usinfo.state.gov) Return to the Washington File