Inside Out | Surge in global military spending is squeezing funds from health and climate fight amid a worsening debt crisis

Alongside an intensifying global arms race, there are demands to address climate change and rebuild health systems even as governments struggle with record debt levels

A series of squeezes on governments worldwide, which are still not properly accounted for, are set to cut deep into spending that is best directed elsewhere

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Russian Yars intercontinental ballistic missile launchers parade through Red Square during the Victory Day military parade in central Moscow on May 9, 2022. Photo: AFP

Published: 9:00pm, 30 Apr 2023

The Stockholm International Peace Research Institute, an authority on the grim statistics of military conflict wherever it erupts across the world, reported last week that military spending jumped 3.7 per cent in real terms in 2022 to a record US$2.24 trillion.

That might not be surprising given Moscow’s continuing war in Ukraine, traumatising Russia’s European neighbours into a second year. But, with just about everyone feeling forced to boost their military spending, the grim reality for most governments is of yet more unsustainable demand being put on increasingly strained budgets.

Alongside demands for more money for the military, there are acute and pressing calls to address climate change and rebuild health systems after the Covid-19 pandemic. Then there are the demographic realities of ageing societies, with shrinking workforces leading to squeezed tax revenues and rising costs to provide security to people through old age.

As if that was not enough, US efforts to decouple from China, promote “friend-shoring” and build “just-in-case” capabilities at home to ensure national security have raised costs, reduced productivity and slowed growth and corporate profits. All this when government debt worldwide is at record levels and debt service costs are creating an unprecedented squeeze on all government spending.

The details of this squeeze must be addressed if deep recession, debt crises and global conflict are to be averted. In President Vladimir Putin’s Russia, military spending has risen 9 per cent, with a third of the country’s budget set to be spent on defence and security at the expense of infrastructure, agriculture and healthcare spending.

Unsurprisingly, Ukraine has seen its military spending jump 640 per cent, rising to account for 34 per cent of GDP. However, the Russian invasion has triggered explosions in military spending across the world. A number of Eastern European economies near Russia’s borders have more than doubled their military budgets since Russia grabbed Crimea in 2014, with the European Defence Agency lifting spending by 6 per cent to about US$237 billion.