October 22, 2003
Global defense spending is generally thought to be concentrated in the United States, and a handful of other countries. This is generally true. If you take just money spent on military items, the lineup looks something like this (as a percentage of global defense spending, in year 2000 dollars);
United States 43 percent
United Kingdom 5
All Other Nations 38.
However, if you take into account Purchasing Power Parity (or PPP, the relative cost of common goods in different countries), those nations with lower costs (like China and India), loom larger.
United States 31 percent
All Other Nations 62.
Nations that spend little cash, but have cheap local costs (food, housing, payroll), like Iran and Pakistan, all of a sudden have larger defense spending (Iran is now about six percent of U.S. spending, and Pakistan about four percent.)
Purchasing Power Parity shows how poor nations can spend only a few billion dollars a year on defense, yet have hundreds of thousands of troops in service. If these soldiers have good leadership and train regularly, they can be a formidable foe even to a high tech force like the United States. But most of the poor nations don't have high quality officers and NCOs, and their troops fade quickly when confronted with a well equipped and well trained force. Unfortunately, the media is not very keen on examining the quality of training and leadership in anyone's armed forces. Yet, time and again, these two factors have proved to be the most critical ones. And that will remain the case in the future.