Military Expenditures

• The total military spending of all countries in the world fell in 1995 for the eighth consecutive year to $864 billion, 34 % below the all-time peak of $1.36 trillion in 1987 and the lowest level (in constant dollars) in 30 years, since 1967.

• The developed countries as a group have shown a steady 7 percent annual decline since 1992 and were responsible for the world decline.

• Developing countries, on the other hand, increased their military spending in 1995 over the previous year. Spending by these countries has fallen since peaking in 1982-1986, but it declined more moderately, turned up at the time of the Gulf War, apparently bottomed in 1993-1994, and increased by $7 billion in 1995.

• This suggests that the post-Cold War downward adjustment among the developed group is still in progress and is independent of the decline in the developing group, which appears to have ended and reversed direction.

• Regional spending trends have been mixed, with reductions in most regions (1995 percent share of world shown in parentheses):
  • the largest regions--North America (33) and Western Europe (23)--had moderate declines;
    
  • Eastern Europe (12) and the Middle East (6) have dropped sharply;
    
  • three other smaller regions have also reduced their spending.

• Moderately rising spending trends, on the other hand, have appeared in five regions, particularly in East Asia, the third largest spending region (share: 19), South America (3), and South Asia (2).

• United States spending in 1995 was $278 billion, by far the largest with 32 percent of the world and 3.7 times that of second-ranked Russia. Despite moderate declines, U.S. military indicators have risen in terms of world share, as the rest of the world has declined faster.

• China's third-ranked (though roughly estimated) spending increased by $5 billion, while Japan's (fourth-ranked) declined.

• After a steep eight-year decline, the world arms trade rose by over $5 billion in 1995. The level reached only two-fifths of the 1987 peak, however. This suggests that the post-Cold War plunge may have bottomed out, although the upturn may reflect the surge in agreements resulting from the Gulf War.

• The rise occurred in the developing countries, with developed country imports continuing to decline.

• The three largest importing regions--the Middle East, East Asia, and Western Europe-increased their share of the diminished world arms trade over the decade from 60 to 76 percent. Although all regions showed a decline over the decade, these three dropped more slowly than the rest of the world.

• In the latter half of the decade (1991-1995), East Asia, South America, and Oceania had rising import trends, as did Eastern Europe from a virtual stoppage in 1992.

• In 1995, arms imports rose in the Middle East, East, South, and Central Asia, South America, and Eastern Europe.

• Over the 1993-1995 period, Saudi Arabia was by far the largest single arms importer with over $22 billion, followed by:

• North America, which topped the category "arms exports by region" since 1991, continued to do so in 1995 with 50 percent of the world total. The next largest were Western Europe (30), Eastern Europe (13), the Middle East (4), and East Asia (3).

• U.S. arms exports in 1995 amounted to $15.6 billion, three times that of the next supplier and 49 percent of the world's. Over the 1993-1995 period, U.S. exports went equally to developed and developing countries.

• The six next largest suppliers, with over $0.5 billion each and together accounting for 42 percent of the world total, were:

• The Middle East imported over 30 percent of the total number of major weapons in trade over the last 12 years (1984-1995). In 1993-1995, Western Europe became the main importing region with 32 percent.

Other Findings

• Armed forces of developing countries have dropped only slightly, less than one percent annually since 1985, and have grown from 58% to 66% of the world's. South Asia is the only region with a rising trend over the decade, particularly in the first half. Developed countries' forces declined by an average seven percent annually since 1991, especially in Eastern Europe and North America. The force ratio (armed forces per 1000 population) in the developed countries is falling more rapidly and is now only twice as high as in the developing.

• The average burden ratio (military expenditures over GNP) for the world has fallen from 5.5 percent in 1986 to 2.8 percent in 1995, with the same average now applying to both developing and developed countries. The highest ratio historically is in the Middle East, though the 8 percent 1995 level is less than half the 17 percent 1985 level.

• Arms imports of developing countries as a share of total imports have fallen from 10 percent in 1985 to 2.2 percent in 1995, while arms exports of developed countries dropped from 3.2 percent of total exports to 0.8 percent.