India, China increase defence spending sharply in 2009 as West cuts back

India and China raised sharply their defence expenditure in 2009 notwithstanding the global economic depression even as most European members of the NATO are facing a pinch on defence budgets owing to their big deficits.

According to the annual report of the International Institute for Strategic Studies (IISS), the impact of the worldwide financial recession on defence and security spending varied across regions and countries.

The report by the London-based think-tank, titled The Military Balance, revealed that defence expenditure of the United States nearly doubled under former President George W Bush, but President Barack Obama has signalled that the need to deal with a large budget deficit will require “a dramatic re-prioritisation within defence spending.”

President Barack Obama had asked US Congress a few days ago to approve a record $708 billion in defence spending for fiscal 2011, including a 3.4% increase in the base budget of the Pentagon, but stressed that he will continue his efforts to do away with “wasteful programmes.”

A sharp recession, the annual report by the International Institute for Strategic Studies stated, had promoted the government of Russia to abandon effectively a comprehensive military re-equipment scheme which was supposed to run from 2007 to 2015 and to replace it with a new 10-year plan that will begin in 2011.

According to The Military Balance, in contrast to developments in advanced economies, India and China maintained their recent trend of double-digit increases in their defence expenditures.

India raised its defence spending by as much as 21% in 2009, following the terrorist attacks in Mumbai in 2008 in which 166 people lost their lives.

The official budget of China for 2009 included a 15% hike in expenditure on defence to 480 billion yuan ($70.3 billion at market exchange rates). However, the report by the International Institute for Strategic Studies added, the official Chinese defence budget did not reflect the accurate level of resources meant for the country’s People’s Liberation Army. It is widely believed that the official Chinese budget did not take into account weapons bought from abroad or the funding for research and development, the report said.

Other countries in Asia – including Australia, Singapore and Indonesia – also recorded increases in defence expenditure.

The budget deficits of many countries in Europe went up sharply as they “pumped money into the economy” in an effort to put an end to the economic depression, the report titled The Military Balance revealed.

The United Kingdom struggled to reconcile its budget deficit with its big and growing future plan for equipment, according to the report.

Among the European member-countries of the NATO, only Denmark and Norway are likely to hike their defence budgets in 2010. In the medium term, most other members of the NATO will do well to raise their defence expenditure in line with inflation or match existing budget levels, the report by the International Institute for Strategic Studies said.