Secretary of Defense Leon Panetta is welcomed as he enters the hangar bay… (Larry Steagall / Associated…)
When it comes to "hard power," the West is in steep decline. Virtually every nation in Europe is cutting its defense budget. Japan refuses to spend more than 1% of its gross domestic product on defense. And Australia is slashing its military budget, leaving it at just 1.5% of GDP, the smallest ratio in more than seven decades. Now add in the cuts of more than $800 billion in current and planned spending on U.S. defenses, with the prospect of nearly $500 billion more over the next 10 years. The result is a Western defense capability that is rapidly shrinking in size, has too little invested in future technologies and is increasingly wary of any conflict that would require sustained operations.
The situation is especially dire in Europe. In the early 1990s, NATO allies averaged 2.5% of GDP for defense expenditures — not great but passable. Today, it is closer to 1.5% — even though, a decade ago, members had agreed to a 2% minimum. According to NATO figures, last year only two countries were above that line: Britain at 2.6% and Greece at 2.1%. No doubt Greece no longer belongs in that club.
As Stephen Hadley, former President George W. Bush's national security advisor, has pointedly remarked: "Europe has become so enamored with soft power that it has stopped investing in hard power. In terms of hard security, it makes Europe a free rider." Strong words from someone who has been deeply committed to keeping transatlantic ties strong.
Nor is the picture much better in Asia. While China has been increasing its defense budget by double-digit rates annually for two decades, Taiwan and Japan have allowed their defense budgets to decline or to stay essentially flat. In Japan's case, it's the 11th consecutive year the defense budget has been cut. With the world's third-largest economy, Japan's 1% still buys a lot of capabilities, but, arguably, it isn't enough to keep up with China's growing military might. And although Australia cannot be said to have been a free rider given the sustained contribution it has made on the ground in Iraq and Afghanistan, the planned cuts to its military will mean a sharply reduced capacity to act as a force multiplier as the United States pivots to Asia. Even South Korea, which faces a nuclear-armed, unpredictable state on its doorstep, has not seen its defense burden rise above 3% of GDP for nearly 20 years.
Measuring defense spending as a percentage of GDP does not, of course, give you a perfect picture of the defense effort of a country because it cannot measure the quality of the existing force or the willingness of a country to use force. That said, the GDP measure does give you a generally accurate sense of the burden the government and its citizens are willing to sustain when it comes to the military and, as such, the priority a country gives to defense relative to other matters.
And here, "the tale of the tape" is revealing. According to the European Union's accountingfrom 1995 to 2010, French spending on defense — broadly defined as including the base defense budget, civil defense, R&D and foreign military aid — had risen by 33%. At the same time, spending on the environment increased 143%, on housing and community amenities by 103%, on health by 80% and on social protection (old age, disability, unemployment, etc.) by 81%. In Germany, while defense spending declined over the last two decades, Berlin's spending on health increased by 81% and on social protection by 70%. Germany also saw an approximately 50% increase in other areas, such as public services, education, recreation and culture. As for Britain, over the same time frame, expenditures for the environment, health, public services, education and social protection have exploded — each well over 100%, with health increasing by 188% and environmental spending almost tripling. In the meantime, defense spending was increasing by a little over a third.
In short, if there is a fiscal crisis among our allies, it has not been brought about by an untenable level of spending on defense.
As the figures indicate, spending decisions are political choices. The United States faces similar choices as the rise of entitlement benefits and healthcare begin to squeeze out other items, such as defense.
Compounding the problem, at least among NATO allies, is the perception that they face no significant conventional security threat. What's missing in this focus on immediate and obvious threats is the role the West's militaries play in maintaining a largely stable world order. It is the West, with the U.S. in the lead, that has both kept the great power peace for 60 years and kept rogue states from disrupting that order in critical areas. It is this stability that has allowed globalization to flourish and, in turn, help generate unprecedented economic growth around the world.