Special report: Defense spending
Saudi tanks
Saudi soldiers stand at attention in front of tanks in the southern Jizan province near the border with Yemen, 2010. © AFP
Saudi tanks
Andrew Freeman
Last updated: January 7, 2013

Middle East bucks the trend on military spending

While total world military expenditure has levelled off for the first time in 12 years, the same cannot be said for the majority of countries in the MENA region.

Statistics released by the Stockholm International Peace Research Institute (SIPRI) show that the Middle East increased its military expenditure by 4.6% last year, second only to Eastern Europe (+10.2% for 2011).

Of the countries for which information was provided, only Egypt, Jordan and Oman spent less than they had previously. Algeria, on the other hand, increased its spending by a grand 44% in real terms. The region’s spending, along with increases by China (6.7%) and Russia (9.3%) essentially negates the decreases made due to austerity measures and cuts in the West.

In dollars, Algeria led the increase in military expenditure with an additional outlay of almost $2.5 billion last year, bringing spending up to $8.17 billion. To put this into perspective, Africa’s spending last year resulted in a rise in expenditure of 8.6%, which was essentially entirely a result of Algeria.

Despite these increases, the exact figures for the region in 2011 are uncertain as a number of countries are lacking data, including Qatar, Yemen and the UAE. As a result, exact figures for military spending cannot be given and must be seen as uncertain. Transparency International, a German-based NGO focused on the reduction of global corruption has previously put the Middle East on the bottom rung of worldwide transparency.

“As the lack of data for some countries suggests, military spending in the Middle East is severely lacking in transparency. Even in those countries for which figures exist, often only a single total is given, and this may well exclude significant off-budget military spending, in particular arms purchases made directly from oil revenue funds as opposed to the official defence budget,” Pieter Wezeman, a Senior Researcher at SIPRI, noted.

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Whilst austerity measures and cuts have affected spending in the West, the Middle Eastern state whose revenues are linked to oil prices have not changed course when it comes to military spending. The rising oil price has fuelled the majority of spending increases in many of the countries in the Middle East.

It is also important to note that “the figures for 2011 will not, however, reflect the effects of the Arab Spring, as in almost all cases they are initial budget figures, set before the Arab Spring started” according to Wezeman.

Despite the regional tensions and the lack of transparency, the Middle East is still seen as one of the most important markets in the world, with companies from Europe, the US, Russia, China and South Korea competing for a share of the market.

The exceptions are Iran, where the UN Security council continues its embargo on the majority of arms, and Syria, which is under similar embargos from the US, the EU and the Arab League.

As SIPRI points out, many of the companies selling arms to the region are supported by their governments, and in some cases they are under pressure to export as the same governments are cutting down on their own arms procurement and need to bolster the industry elsewhere.

For example, the US recently signed a new $30 billion contract with Saudi Arabia for new combat aircrafts saying that Saudi Arabia needs to be able to defend itself, and that the sale would create jobs in the US.

Although the Arab Spring has caused the US and some European countries to revoke or suspend some of their export contracts, the reality is that little has changed. Israel, Egypt and Bahrain all receive military aid from the US, Germany has signed major contracts with Algeria, and Iraq is expecting its first delivery of American F-16 fast jets in 2014.

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