By Thalif Deen, IPS

As poverty continues to rise throughout the world, global military spending is exploding to its highest level ever.

The United Nations is surprised at the continued rise in global military spending - particularly at a time when the international community is grappling with a spreading financial crisis which threatens to undermine the poverty reduction goals of the world body.

“The world is over-armed and peace is under-funded,” says Secretary-General Ban Ki-moon, who points out that global military spending is estimated at over one trillion dollars - “and rising every day”.

According to the Stockholm International Peace Research Institute (SIPRI), one of the world’s foremost think tanks on arms control and disarmament, world military expenditure increased by 45 percent, in real terms, and has been rising every year during the last 10-year period.

In 2008, it reached 1.46 trillion dollars, representing 2.4 percent of world gross domestic product (GDP). Its level is now higher than during the latest Cold War peak in the 1980s.

Speaking at the annual meeting of non-governmental organisations (NGOs) in Mexico City early this week, the secretary-general said he was dismayed that weapons continue to be produced and are flooding markets around the world.

“They are destabilising societies and feeding the flames of civil wars and terror,” he warned.

During the eight-year presidency of George W. Bush, says SIPRI, U.S. military expenditure increased to the highest level in real terms since World War II, mostly due to the wars in Afghanistan and Iraq.

The 10 biggest military spenders last year were: the United States (607 billion dollars), China (84.9 billion), France (65.7 billion), Britain (65.3 billion), Russia (58.6 billion), Germany (46.8 billion), Japan (46.3 billion), Italy (40.6 billion), Saudi Arabia (38.2 billion) and India (30.0 billion).

China, Saudi Arabia and India were the only three developing nations in the top 10, followed by countries such as Brazil and Algeria.

Dr. Elisabeth Skons, Programme Leader of SIPRI’s Military Expenditure and Arms Production Programme told IPS the main reason for the strong increase in world military spending during recent year is the rise in U.S. military spending through a series of supplementary allocations for military activities in Afghanistan (since 2001) and Iraq (since 2003).

The United States accounts for a large share (41.5 percent in 2008) of world military spending, while at the same time it increased its spending significantly (by 67 percent in real terms over the most recent 10-year period through 2008), and by 71 percent in real terms between 2000 and the budget for fiscal year 2009 (according to U.S. official data).

However, many other countries are also increasing their military spending and some other major spenders have increased their military expenditure at an even higher rate than the United States, Skons pointed out.

Thus, two of the other top five military spenders, China and Russia, have nearly tripled their military spending since 1999.

On a regional level, it is only West and Central Europe that has an almost flat trend in military spending over the past 10-year period.

“In all other regions, military spending has been increasing,” Skons added.

The strongest regional increases over the past 10-year period were in Eastern Europe, (+174 percent in real terms), due primarily to the trend in Russia); North Africa (+94 percent); North America (66 percent); East Asia and the Middle East (with 56 percent each); while there has been a slower increase in Sub-Saharan Africa (+10 percent) and Central America (+21 percent).

There are many different factors behind the increase in world military spending over the past 10-year period, including ambitions for global or regional power status; regional tensions or other national security concerns; armed conflict; international peace missions; and internal political factors, Skons said.

Underlying some of these trends are other factors, such as more or less realistic threat perceptions, and the often-exaggerated belief that political goals can be achieved by military means.

Furthermore, it is not unlikely that the political agenda on the global war on terror pursued by the U.S. government until 2009 had the effect of facilitating increases in military spending also in some other countries.

“Hopefully, this period is now behind us,” she said.

Asked if the global financial crisis will eventually have an impact both on military spending and arms purchases worldwide, Skons told IPS: “It is difficult to assess the effect of the financial crisis and the subsequent recession on military spending.”

She said research on military spending suggests that the impact of economic factors is smaller on military expenditure than on other types of government spending.

While the link between economic factors and military spending is significant, there are also other important factors influencing military spending, in particular various types of security factors and threat perceptions, and also past spending patterns and various interest groups.

Because of its link to national security, military spending is generally more insulated from economic factors than other public sectors, Skons added.

The actual impact of the financial crisis in each case will be the outcome of the overall balance between motivations to increase military spending and economic constraints.

In regions where the financial crisis has had a severe impact on economic development, such as in Africa, it is possible that military spending will be affected.

In other cases a strong economic downturn may not have a full impact on military spending.

A case in point is Russia, which has been strongly affected by the financial crisis, but at the same time has given strong priority to the military sector in its economic rescue packages, she added.

Asked about the much-ballyhooed post-Cold War “peace dividend”, Dr Bates Gill, director of SIPRI, told IPS it was probably overly optimistic from the beginning to assume a major “peace dividend”.

“What we have seen, however, is a major reduction in inter-state conflict and in the likelihood that the world’s major powers will go to war with one another in the near to medium term,” he said.

However, threats to peace still exist and the nature of those threats has changed as well.

In particular, Gill said: “We see the rise in threats from non-state actors and a persistent degree of instability and civil wars within states.”

These challenges require states to continue spending on defence.

“With these uncertainties in mind, it seems unlikely we will see a major ‘peace dividend’ in the near future,” he added.