Military Burden and Other Relative Indicators

Relative Burden

In addition to military expenditures, armed forces, and arms transfers, which serve as absolute measures of military effort, it is useful at times to compare these measures to other variables to obtain relative indicators of military effort. One such indicator, the force ratio, or the ratio of armed forces to population, is highlighted above under Armed Forces (Main Table I and Figure 18, first column). Another commonly used relative measure is the burden ratio, or the ratio of military expenditures to gross national product (ME/GNP; Figure 18, column two).

Figure 18
Relative Indicators - 1994
(all value figures in 1994 dollars)


Relative Indicators - 1994 (62k)

Figure 18 - continued
Relative Indicators - 1994
(all value figures in 1994 dollars)

Relative Indicators - 1994 (61k)

Average Relative Indicators

The basic economic variables (population, GNP, central government expenditures (CGE), and total trade) contained in the Main Statistical Tables together with the military variables (military expenditures (ME), armed forces, and arms trade) make it possible to calculate a variety of useful ratios or relative indicators. Ten such average indicators for 1994 are presented in Figure 18, to facilitate both inter-group comparisons for a given indicator and an overview of all the indicators for a given group. Besides the usual groupings, U.S. and non-U.S. NATO subgroupings are also shown.

The average indicators in Figure 18 are calculated as the ratio of the group total for the numerator to the group total for the denominator. Such a ratio is equivalent to the weighted value of individual country values, with the denominator variable being the weighing factor. Consequently, the shift from 1993 to 1994 exchange rates is likely to result in changes in the relative weights of countries and may also cause changes in some group indicator levels from those shown in WMEAT 1993-94. See Statistical Notes, Conversion...to Dollars, for a discussion of the impacts of the shift in the exchange rate.

The ME/GNP Ratio

The burden ratio for the world fell to 3% in 1994, a new low for the decade (as well as for the entire period since 1960) and a drop of 2.5 percentage points from the decade-peak 1984 level (Table 11 and Main Table I). This drop is due to the declining burden ratios in both the developed and developing countries. The ME/GNP burden for developing countries has fallen consistently over the decade, from 6.1% in 1984 to 2.6% in 1994, except for an increase in 1990. For the developed, the ratio has fallen from 5.5% to 3.1%.

Estimates of the burden ratio for most of the former Warsaw Pact countries and successors states after the collapse of the Soviet Union continue to be very rough and highly tentative; they should be treated with extra caution. Estimates reported here are often derived from a variety of sources that may not be consistent either within or among themselves as to relationships among variables or over time. In particular, the nominal ME/GNP burden ratios shown here for Russia in 1992 (16.3%), 1993 (14.3%), and 1994 (12.4%) may be somewhat high; other respectable sources estimate the ratio for Russia to be in the vicinity of 10% or below. Consequently, the burden ratio for those country groupings in which Russia has a large weight, such as Eastern Europe and the former Warsaw Pact, may also be overstated.

The Western Europe burden ratio has fallen from a decade high 3.4% in 1984 to 2.4% in 1994. The estimated burden ratio for Eastern Europe declined from roughly 12% in 1984 to 7% in 1994.

The ratio for NATO as a whole declined over the decade by one and one half percentage points, from a high of almost 5% in 1986 to 3.3% in 1994. Greece (5.6%), the United States (4.3%), and Turkey (4.1%) recorded the highest ratios of all NATO countries. The ratio for the US fell steadily since peaking at 6.6% in 1986, to 4.9% in 1991, then rose slightly in 1992 to 5.1% and fell again in 1993 and 1994.

The Middle East ratio (7.7%) was the highest of any region in 1994; it and Eastern Europe were the only regions of the world to record ME/GNP ratios of over 5%. The Middle East has shown dramatic declines annually from the very high ratios in the high-to-mid teens recorded during the 1984-1991 period. The 1994 ratio is 10 percentage points down from 1984's 18% in the peak year.

A handful of Middle East countries-Kuwait (11%), Oman (18%), Saudi Arabia (18%), and Yemen (14.5%)-recorded ratios of 10% or higher in 1994. Of the remaining countries, Bahrain recorded a ratio of 6.4% in 1994, while all other countries' ratios were 5% or lower. Iran's ratio of 2.4% in 1994, though roughly estimated, shows a continued decline from its decade high of 11% recorded in 1986, 8.3 percentage points fewer than in 1994.

Five of the nine countries in the world with estimated ME/GNP ratios of over 10% were in the Middle East-the four mentioned above plus Iraq, whose absolute values are highly estimated. Bosnia and Herzegovina, North Korea, and Russia are the remaining three countries with ratios reaching this level.

Figure 19 cross classifies all countries in 1994 according to both burden ratio and income level, as measured by GNP per capita. The widespread scatter of countries throughout the entire matrix suggests that income level or stage of development is not a critical determinant of the burden ratio. Involvement in civil or external war, military threats by neighbors, or over-emphasis on military power are probably more relevant.

Table 11
The Burden Ratio: ME/GNP
(In percent)
19841990 19921994

World5.54.43.63.0
Developed5.44.43.63.1
Developing6.14.53.62.6
Region
Middle East17.916.514.57.7
Eastern Europe11.89.79.47.1
North America5.75.04.63.9
North Africa9.55.24.53.8
South Asia3.83.53.03.3
Oceania2.52.32.42.4
Western Europe3.42.92.62.4
Subsaharan Africa3.33.03.92.2
East Asia2.52.01.81.8
South America2.41.91.61.4
Central America & Car.3.92.81.41.2
Central Asia & Cauc.------1.2.8
Europe, all6.6 5.23.9 3.2
Africa, all5.5 4.03.8 2.8
Organization / Reference Group
OECD3.7 3.22.9 2.7
OPEC12.6 12.010.6 5.1
NATO, all4.8 4.23.8 3.3
Warsaw Pact (fmr)12.1 9.88.6 6.6
NATO Europe3.5 3.02.7 2.5
Latin America2.1 1.61.3 1.2
CIS--- ---10.8 8.5

In accord with the generally declining tendency of the burden ratios in recent years, the most dense cells in the matrix have moved downward toward lower burden ratios. In comparison to the similar chart for 1993 in WMEAT 1993-1994, there were two fewer countries with estimated ME/GNP ratios of over 10% in 1994 and nine fewer with ratios between 5-10%. The number of mid-ratio countries, with ratios of 2-5%, stayed the same in 1994, while there were four more countries with ratios of 1-2% and six more with ratios of under 1%.

The ME/CGE Ratio

The percentage of central government expenditures spent on defense (ME/CGE) is another useful measure of military effort. It complements the ME/GNP ratio and can show a differing comparative burden level from the latter, since the ratios of CGE to GNP varies considerably. For example, ratios for ME/CGE in 1994 ranged from almost 22% in the Middle East to roughly 5% in Central America (Figure 18, column three and Table 12). Use of the ME/CGE ratio as a measure of military effort is limited in this edition by the lack of 1994 central government expenditures data for countries of Subsaharan Africa and Central Asia, resulting in aggregate data not being available for those regions and the developing and world totals.

For developed countries the ME/CGE ratio fell only slightly to 10% from 1993. This continues a decade long downward trend from the early part of the decade, which had ratios reaching in the high teens.

Figure 19. Relative Burden of Military Expenditure--1994

Relative Burden of Military Expenditure--1994 (55k)

Table 12
The ME/CGE Ratio

(In percent)
19841990 19921994

World19.116.512.1---
Developed18.516.011.510.0
Developing21.919.314.5---
Region
Middle East34.649.241.421.8
Eastern Europe43.236.718.321.1
North America23.821.519.517.4
South Asia18.615.814.315.9
North Africa22.616.013.610.2
East Asia12.911.59.18.7
Oceania8.38.38.18.3
South America9.17.47.36.9
Western Europe8.27.46.35.7
Cent. America & Car.10.59.55.44.7
Central Asia & Cauc.------3.4---
Subsaharan Africa13.611.614.4---
Africa, all17.2 13.612.3 ---
Europe, all18.5 15.29.1 7.8
Organization / Reference Group
OECD12.8 11.79.8 8.7
OPEC31.8 42.937.4 16.7
NATO, all14.8 13.311.5 10.1
Warsaw Pact (fmr)43.2 36.617.2 21.52
NATO Europe8.5 7.66.5 5.8
Latin America7.8 6.56.3 6.0
CIS--- ---18.6 ---

In 1994 ratios fell for all regions of the world except Eastern Europe (up six percentage points) and South Asia (up .9).

The Middle East ranks as the leader in terms of this ratio with 22% in 1994, just slightly higher than Eastern Europe's 21%. The ME/CGE ratio for the Middle East fell 4.3 percentage points from 1993, while Eastern Europe's rose by 5.9 points. Over the decade both regions showed much higher ME/CGE ratios than other regions; the Middle East ratio reached as high as 50% before beginning a decline in 1992 and Eastern Europe peaked at 43%.

Other regions to record ME/CGE ratios of over 10% in 1994 were North America (17.4%), South Asia (15.9%), and North Africa (10.2%).

ME per Capita

The military expenditures per capita ratio, another complementary measure of military burden or effort, also shows a wide gap between developed and developing countries (Figure 18, column four). The gap amounted to $550 in 1994 when the measure averaged $587 for developed and $37 for developing countries. This gap has narrowed steadily over the decade, with the ratio falling faster for developed countries.

In 1994, North America led the world' regions in terms of this ratio with $787, followed at a distance by Eastern Europe ($418), Oceania ($339), and Western Europe ($327). The lowest ratios were recorded by Subsaharan Africa ($7), South Asia ($10), Central America ($17) and Central Asia ($18). The four countries topping the list were Kuwait ($1,838), Israel ($1,304), United States ($1,105), Brunei ($1,087), and Singapore ($1,072).

ME/AF Ratio

Military expenditures per member of the armed forces (ME/AF) is a different kind of relative indicator. Rather than burden, it measures the level of armament and military effort per soldier (to the extent that the dollar values of military expenditures, usually exchange-rate-converted, succeed in measuring that effort accurately).

In terms of this indicator, developed countries in 1994 (averaging $85,200) exceeded the developing countries (averaging $10,800) by roughly 8 times, with a difference between the two groups of $74,400 (Figure 18, column five).

In 1994, the highest regional ratios were again recorded by North America ($153,000). Oceania and Western Europe followed with ratios of $116,500 and $57,000, respectively. All other regions recorded ratios below $50,000.

Eleven countries spent over $100,000 per soldier in 1994, including the developed countries of Western Europe, the United States, Canada, Japan, and Australia, and the high income Middle Eastern countries of Kuwait and Saudi Arabia (see Country Rankings).

Arms Trade/Total Trade

The drastic decline in the arms trade in recent years coupled with the moderate increase in total trade caused the ratio of the two measures to drop substantially-from a world average of 3.1% in 1984 to .5% in 1994. In terms of its 4 main components, this ratio looks as follows (in percent; Main Table I):

                               Developed                Developing

		

Arms imports/total imports:   

	    

				1984     0.9            11.8

				Peak      .9 ('84-7)    11.8 ('84)

				1994      .3             1.6

	    

Arms exports/total exports:

	    

			        1984     3.6             1.4

			        Peak     3.6 ('84)       1.6 ('88)

			        1994      .6              .2
Over the decade, all four of the above component ratios were reduced by two-thirds and more. Most notable are the average 85% drops from their peak years in the arms exports/total exports ratio for both the developing and developed countries and in the arms imports/total imports ratio for developing countries.

Other Indicators

GNP per capita for the world as a whole fell during 1990-1993, rising only slightly in 1994 to $5,366. The ratio for both developed and developing countries continued an upward trend in 1994, growing at roughly the same pace over the decade at 2.5%. The ratios grew slightly faster during the latter half of the decade at about 3.6%. In 1994, the developed countries peaked at $19,050 and the developing countries at $1,388 (Main Table I).

Over the decade, declining rates were experienced by Africa (1%), the Middle East (2%), Central America (3%), and Eastern Europe (7%).

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