Friday, June 18, 2010

Global military spending to outpace GDP growth in 2010

June 18, 2010, 1:58 p.m. EDT

Last year marked another budget-busting record; U.S. accounts for lion's share

By Christopher Hinton , MarketWatch

"NEW YORK (MarketWatch) -- Global military spending for technology, fighter aircraft, tanks, guns and combat boots surged 49% in the last decade and shows few signs of slowing down despite economic weakness in the most developed nations, a study indicates. "...

..."Correlation of oil and armaments

Along with the U.S. conflicts in Afghanistan and Iraq, the rising price for oil and gas also helped to drive spending growth in emerging economies since 2000. Natural resources provide a direct source of income to a government that can be easily spent on arms, unlike tax revenue form the general population, which could carry a higher political risk.

"The Middle East has for a long time been the region with the highest level of military expenditure relative to GDP in the world," according to a Sipri report.

"This is a factor of the high level of conflict in the region and the low level of democracy but also, arguably, the vast oil revenues enjoyed by many countries in the region. However, in recent years increasing oil revenues in other parts of the developing world have also been accompanied, in many cases, by rapid increases in military spending and arms imports."

The oil- and gas-producing state of Chad saw its military spending skyrocket 663% in the last decade, while former Soviet state Azerbaijan's military budget grew 471% and Kazakhstan's rose 360%, albeit off of low levels.

A downturn in oil and commodity prices in 2009 slowed the rising trend somewhat. But military spending among such countries should continue as energy prices remain highs, particularly if those countries are in regions of high political tension." Article>>>>

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