The Kingdom of Saudi Arabia has emerged as the world’s fourth largest spender on national defense with the Kingdom increasing its annual defense expenditure by $16 billion over the last five years, said a report.
Saudi Arabia’s increasing defense budget is tied to new capital programs including new and re-fitted F-15 fighter aircraft totaling nearly $30 billion, according to Deloitte in its new annual report, “Global Defense Outlook 2014.”
The other Middle East countries in the “Top 50” global spenders league include the UAE, Oman, Iraq, Kuwait, and Egypt.
The Deloitte report specifically takes an in-depth look at Defense Ministries of 50 nations whose total publicly-acknowledged spending on national defense accounts for more than 92% of global defense outlays.
Six nations (USA, China, Russia, Saudi Arabia, Japan and France) generate 60% of global defense spending and adaptation, collaboration and investment are predicted to be the top-priority for defense management strategies in the coming years.
Fundamental shifts in defense policies around the world are occurring: Russia’s moves in Crimea, Japan’s efforts to revitalize its defense, China’s military buildup, and US debates over post-war defense spending, will all continue to have a significant effect on global defense spending, stated the report, which examines trends, policies and key drivers in the current shift in defense spending.
The Deloitte report said that from 2008 to 2013, Saudi Arabia increased its annual defense expenditure by $16 billion, following China's $60 billion and Russia $21 billion spending boost.
The largest drop was in the US, which reduced its annual defense spending by $53 billion over the same period, the report stated. According to experts, there has been a major shift in the global balance of military power with the West trimming its defense budget and Asian and Middle Eastern countries boosting their expenditure.
According to Deloitte, out of the 25 top nations with the highest per capita income, Kuwait, Australia, Singapore and Japan were the only ones who have not signaled that defense spending will decline or remain flat over the next two to five years.
Of the 25 lowest-income members of the Top 50 spenders in the world, Saudi Arabia, Iraq, Oman, Algeria and Morocco along with Angola, Azerbaijan, Colombia, Pakistan, Russia and Ukraine are all increasing their annual defense spending in the same 2-5 year period.
The report pointed out that the largest absolute defense budget increases worldwide are likely to come from the BRIC countries of Brazil, Russia, India and China.
Asian giants China and India along with Brazil and South Korea comprise 70% of total defense spending among the lower-income economizers, it added.
Source: Deloitte - Global Defense Outlook 2014