The coronavirus has changed the direction of the world

Prior to the pandemic, one of the main concerns of the entire world was the military. According to a report by the Stockholm International Peace Research Institute (SIPRI), last year, the biggest amount ever was spent globally, respectively 1.9 trillion dollars, since the beginning of the cold war (1990), when 1.5 trillion dollars was spent on arming. The amount allocated to the armed forces across the globe represents an increase of 3.6% over 2018 and represents the biggest annual increase in military spending since 2010.

"Global military spending was 7.2% higher in 2019 than in 2010, which shows an upward trend in military spending over the last few years", says Dr. Nan Tian, researcher at SIPRI, who says: "This is the highest level of spending since the global financial crisis of 2008 and probably represents peak spending".

The authors of the report show that the expression "military spending" refers to every government expenditure for the forces and current military activities, including salaries and benefits, operating expenses, weapons and equipment acquisitions, military constructions, research and development and central administration, command and support. Out of that total, SIPRI states that spending on new equipment and technology represents only a small part.

According to data from the SIPRI report, last year, 249 dollars a person were spent globally on the armed forces.

62% of the entire amount spent on the armed forces is split between five countries: US, China, India, Russia and Saudi Arabia. It is the first time when three Asian states are included among the top nations which allocate significant funds to the arms race.

Military spending by the US increased 5.3% to 732 billion USD in 2019 and have represented 38% of the global military spending. The increase in American expenses in 2019 was the equivalent of Germany's entire military expenses that year.

"The recent increase in US military spending is largely based on a perceived return of the competition between the great powers," said Pieter D. Wezeman, senior researcher at SIPRI.

The big surprise in the ranking of military spending is China and India, which, based on their allocated amounts, rank second and third, ahead of the Russian Federation. China's military spending reached $ 261 billion in 2019, up 5.1% over 2018, while India's rose 6.8% to $ 71.1 billion.

"India's tensions and rivalries with Pakistan and China are one of the main factors behind the increase in its military spending," said Siemon T. Wezeman, senior researcher at SIPRI.

In addition to China and India, Japan ($ 47.6 billion) and South Korea ($ 43.9 billion) were the largest military spenders in Asia and Oceania. Military spending in the region has increased every year since 1989.

• Germany, Bulgaria and Romania, the EU states which have increased the military expenses

In the European Union, the top spot in the military spending last year was held by Germany which allocated 49.3 billion dollars, up 10% over 2018.

Diego Lopes da Silva, a SIPRI researcher, says: "The increase in German military spending can be partly explained by the perception of an increased threat from Russia, shared by many member states of the North Atlantic Treaty Organization (NATO). At the same time, military spending by France and the United Kingdom has remained relatively stable. "

According to the report, there have been strong increases in military spending among NATO member states in Central Europe: for example, Bulgaria has increased its own by 127% - mainly due to payments for new fighter jets - and Romania has increased spending by 17%.

Contacted by BURSA, SIPRI representatives could not specify whether the report included the amounts allocated or those actually spent during the past year.

In Romania's case, the increase in military spending by 17% compared to 2018 can be attributed to the salary increase granted at the beginning of last year, but also to the advance payment of installment for the Patriot system in Deveselu, which had as its final due date in the first half of 2020. It is curious that the payment was made by the new Orban government, while the Chinese city of Wuhan was facing the new Covid-19 epidemic. In these conditions, we believe that the Government should clarify an issue: was the advance payment of the installment due for 2020 the decision of the Orban Cabinet or was it made at the request of the US Executive?

Unfortunately, although we tried to find out information on what things were like at the end of last year, the members of the PNL government with responsibilities in the military field and the spending of the allocated amounts did not answer our repeated calls.

The SIPRI report also shows that all 29 NATO member states spent 1,035 billion dollars on the armed forces last year.

Meanwhile, the Russian Federation increased military spending by 4.5% to 65.1 billion dollars. "Russia's military spending represents 3.9% of the country's Gross Domestic Product and was among the highest in Europe," said Alexandra Kuimova, a SIPRI researcher.

• The pandemic is affecting the level of military spending in 2020

The Covid 19 pandemic has changed the concerns of the world, relegating arming to the background, with most states now turning towards the discovery of the new Coronavirus vaccine.

By regions, the largest increase in military spending was in Europe (5%), followed by Asia and Oceania (4.8%), North, Central and South America (4.7%) and Africa (1.5%).

Researchers at the Stockholm-based Institute say that when it comes to military spending, the only volatility in the amounts spent in sub-Saharan Africa is due to the armed conflict happening in several states.

Data from previous global economic reports suggests that the current economic crisis caused by the Covid-19 pandemic will disrupt this year's military spending. Of the total military expenditures, the sector which the pandemic will negatively impact will be the that of military equipment acquisitions, an area in which industrial activity decreased dramatically during the first four months of this year, due to the lack of necessary materials and financial liquidity.

In fact, a week ago, the Pentagon said it expected the global coronavirus epidemic to delay its major weapons programs by about three months.

Ellen Lord, Undersecretary of State in the Ministry of Defense, in charge of arms procurement and maintenance, did not specifically mention programs or businesses, but suggested that the delays would be widespread. "Domestically, we are seeing the greatest impacts on the aircraft supply chain, shipbuilding and small space launches," Lord said.

However, the Pentagon has tried to keep its industrial base solvent and functional during the pandemic, including by increasing reimbursements for works that are not yet complete. That's why last week the White House allocated $ 3 billion in cash from the Treasury to the US defense industry.

Meanwhile, in Russia, the program announced by Vladimir Putin at the end of last year for 2020, for the construction of battle robots, drones and lasers, also seems to be put on standby due to the pandemic that engulfed the Federation and led to the suspension of activity in several companies in the defense industry, as well as in military research institutes.

At the level of the European Union, it seems that the construction of the patrol corvette fleet in the Mediterranean Sea by the Naval Group - Fincantieri concern, announced by French President Emanuel Macron, has become a project that has been put on hold, given that both Italy and France are among the states on the Old Continent which are the most affected by the Covid-19 pandemic.