Guest Post – Dave Kang: ‘Military Spending in East Asia is Lower than You Think’

The following is a guest-post by my good friend Dave Kang. Dave teaches international relations at the University of Southern California. If you are working on East Asia, you really should know his stuff; if you don’t, get to it. Below he complements his recent TNI essay with the full flow of charts and graphics. This post is a very important rejoinder to the constant assertion (think Robert Kaplan) that East Asia is on the brink of war and that everyone is freaked out by China. The thing is, East Asian military spending doesn’t actually suggest that at all. Data first everyone…

“In a recent National Interest essay I argued that military expenditures in East Asia do not appear to be excessively high. In this post I’d like to post the figures that informed the TNI essay (for some reason, TNI made me take out all the graphics – isn’t that what the web is for?). The figures are quite vivid, and help explain why I made the fairly straightforward interpretation of the data that China’s neighbors, according to IISS and SIPRI, aren’t balancing it the way everyone says they are.

The standard way in which security scholars measure a country’s militarization is to measure the “defense effort” – i.e., the ratio of defense expenditures to GDP. The defense effort serves as a proxy for domestic politics: the share of its economy that a nation devotes to the military reflects a nation’s priorities, and the trade-offs the country chooses to make. When countries perceive a significant external threat, military priorities take precedence over domestic priorities such as education or social services. In times of relative peace, countries are more willing to devote a greater share of their economy to domestic priorities – perhaps the best example of this was the ephemeral “peace dividend” following the Cold War. Putting Latin America next to East Asia also allows for a much better sense of scale and comparison (Figure 1).

Figure 1: East Asian and Latin American defense spending, 1988-2013 (% of GDP)

Countries: China, Japan, South Korea, Taiwan, Vietnam, Philippines, Singapore, Malaysia, Indonesia, Thailand, Australia.

Latin America: Argentina, Bolivia, Brazil, Chile, Columbia, Ecuador, Peru, Uruguay, Venezuela

Source: Information from the Stockholm International Peace Research Institute (SIPRI), http://www.sipri.org/databases/milex, 2014.

A standard rejoinder is that Asian nations have become increasingly richer over the past generation, so they can devote a lower proportion of their resources to their militaries and still be increasing their absolute spending. Also, perhaps a generation is too long to measure – maybe East Asian states only responded to China recently. So we may care more about the past decade than what happened way back in the olden days of the Cold War. Yet as can be seen from Table 1, measuring military expenditures this way amplifies the puzzle, because Latin America averaged greater increases in inflation adjusted spending since 2002 than did East Asia.

Table 1. Change in absolute military spending (constant US$ 2011)

Source: SIPRI 2014

Of course, this data are simply aggregate descriptions of the situation in both regions, and perhaps the types of deployments or mix of capabilities are different in the two regions. So I used the most current IISS data to look at naval deployments in both regions – this is where most analysts see war as perhaps imminent.

Even here, it is not obvious that East Asian states are arming more than Latin American states. As figure 2 shows, Brazil and Argentina have as many principal surface combatants as do any Southeast Asian nation, and figure 3 shows that there is no clear pattern to the level of naval personnel. The Philippines and Vietnam between them have three total surface combatants, and even though Vietnam is buying six submarines, the likelihood that these single-digit navies will spark a war that lasts a long time is fairly low. It is fairly well acknowledged that no country in East Asia other than China and Japan are crafting blue-water navies capable of conducting extended military operations.

Figure 2. Principal surface combatants in Latin America and East Asia (2013)

Source: IISS, The Military Balance, 2014

Figure 3. Naval personnel in Latin America and East Asia (2013)

Source: IISS, The Military Balance, 2014

In short, no matter how I measure it, the aggregate data do not point to a widespread arms buildup in East Asia that is measurably different from that in Latin America. Rather, the conclusion seems to be that military spending in East Asia has trended downward.

There may be an argument about particular quality of the military in one region that is different from the quality in another region, or that eve more subtle measures of militarization would lead to the conclusion that the regions are different. But my point is that to do so, one has to move well beyond the use of aggregate data that often accompanies pronouncements of an Asian arms race.

Explaining this empirical observation is a genuine puzzle (one which is my current research project). I began watching military expenditures in East Asia over a decade ago, when I first began hearing arguments that although in the early 2000s there was no balancing of China, that was a delayed reaction and eventually China would cause others to arm against it. After more than ten years of watching the defense effort going down — not up — I’ve decided to try and explain this curious result.

In the TNI essay I draw more links to US policy in the region, and less looking for explanations. But there are a host of hypotheses that explain low spending — It is possible that the types of spending in the two regions are different — East Asian spending might be more focused on weapons, while Latin American spending might be focused on personnel. Alternatively, East Asian states may be relying heavily on the U.S. military presence instead of their own militaries, a classic free-rider problem. Certainly domestic politics has played a major role in dampening military spending in a number of countries around the region. But these hypotheses need to be empirically shown, not simply asserted because they might fit a prevailing sentiment. It is quite true that most scholars believe East Asia is more dangerous region than is Latin America, and the chance for inadvertent escalation of conflicts might even lead to war. But it is also worth pointing out that almost any way one measures aggregate data on military expenditures, and the standard ways in which scholars measure arms races, does not necessarily support the conclusion that East Asia is in an arms race. “Arms strolling” anyone?”

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Robert E Kelly Assistant Professor Department of Political Science & Diplomacy Pusan National University robertkelly260@hotmail.com

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