2007/07/27

Sustainability of military power

People often arrive at similar scenarios when they think about the geo-strategic situation in a couple of decades.
This cluster of scenarios includes an economically strong China that challenges U.S. power in an attempt to regain regional supremacy, the province that we call today "Taiwan" and to turn some neighbours into puppet states.

These scenarios assume that - in 10, 20, 30 years - Europe and the U.S. still stagnate in military power and Russia has recovered somewhat - but not enough to re-establish full dominance over Eastern Europe.

Is it reasonable that the NATO - and especially its biggest defense spender, the U.S. - can sustain their military power? Is it reasonable to expect that the ratio of military power inside the NATO will still be so one-sided US-heavy?

In fact, it can be disputed with good reason that our societies can sustain the present levels of defense spending. The Soviet Union lost the Cold War largely because its inferior industrial base was forced to sustain a similar level of defense spending as did the west. This excessive burden eroded the economy and society. It was an astonishing accomplishment that they held out that long. Imagine our societies being permanently in near-total war mobilization for 40 years ... we would have completely ruined ourselves as well, probably much earlier.

But even the moderate levels of defense spending today are stretching the capabilities of some NATO nations beyond the sustainable maximum. Our old nations have accumulated lots of suboptimal features over time that limit their ability to focus resources on unproductive activities such as military preparations.

Let's have a look at the USA. That nation prides itself with having the most powerful (and expensive) forces in the world and being the most powerful economic power. Well, it's doubtful whether their forces are truly a result of their own economic power and sustainable. I'll use the "CIA World Factbook" here to avoid doubts whether these values might be manipulated against the USA.

GDP: $13.21 trillion (2006 est.)

Public debt: 64.7% of GDP (2005 est.)

Current account balance (2006 est.): -$862.3 billion (2006 est.)

Debt - external: $10.03 trillion (30 June 2006 est.)

Military expenditures of GDP: 4.06% (2005 est.)

Source: CIA World Factbook
For FY 2008, the Bush administration has requested $647.3 billion to cover the costs of national defense and war. This includes the Defense Department budget ($483 billion), some smaller defense-related accounts ($22.6 billion), and the projected FY 2008 cost of Iraq, Afghanistan, and counter-terror operations ($141.7 billion). However, it does not include non-DOD expenditures for homeland security ($36.4 billion) or the Veterans' Affairs budget ($84.4 billion).
Nor does it include the request for supplemental funds for outstanding FY 2007 war costs ($93.4 billion).
The $647.3 billion request represents a 75 percent real increase over the post-Cold War low point in national defense spending, which occurred in 1996. Today's expenditures are higher in inflation-adjusted terms than peak spending during the Vietnam and Korean wars -- as well as higher than during the Reagan buildup.
quote from "America Speaks Out: Is the United States spending too much on defense?" Carl Conetta, Project on Defense Alternatives (The overall projected sum for 2008 is $861.5 billion.)

Another source gives the figure of $728.2 billion for 2006, calculated in a similar manner.

So basically the account balance deficit of the USA (about $850 billion) is quite close in size to its defense spending (about $700-850 billion).

The USA as a whole is significantly living beyond its own economic capabilities as there's a huge external debt at the same time. No matter whether it lives beyond its own means due to defense spending or other spending (there isn't much other spending in the federal budget at least), this situation is not sustainable. The USA as a whole can only spend to date what it spends because other nations lend it their economic outputs (including the PR China).

An end of the Iraq war would not fundamentally change this situation - it would probably cause a drop of the defense spending by 15-30%, but not eliminate the long-time account balance deficit.

The NATO nations with positive account balances have little inclination to increase defense spending to levels like 4% of their GDP as they have internal economic problems such as retirement provisions, state debts and small economic growth. European nations don't feel threatened by the PR China.
It's also difficult to argue in Europe that the USA would be threatened by China due to the Pacific Ocean - and the US allies in East Asia are notorious for seeing less threats for themselves than the USA do.
European defense spending would likely react to a Russian threat, but not to Chinese ambitions. An arms race with Russia wouldn't help in a conflict with China as the first requires rather power at land and the second rather power at sea.

We should not consider the present strength as sustainable when we look 10, 20, 30 years into the future of NATO's security and position in the world. It's almost guaranteed that the upcoming nations China and India will rise in military, political, cultural and economic power - but it's almost guaranteed as well that the NATO countries will have trouble to keep their present military power level. Their old military equipment inventories might even become older in average as is typical when forces become less well-funded.

The insight into the unsustainability of NATO's present military power should influence our behaviour towards other relevant powers and our grand strategy. (If we had a common grand strategy in the NATO.)

Sven Ortmann

1 comment:

  1. If India, China and other rising countries one day pose a military challenge to NATO, the only defense is the Navy for global protection of our SLoC as far as Australia and Japan.
    The forces on land should be enough to fend of possible invasion attempts by neighbours. The only ones capable among these might be Russia and an alliance of North African and Middle Eastern States. That isn't a threat anytime soon for collective European defense, even without US support. So with a dwindling budget make sure your SLoC are safe with up to date subs, ships and airborne assets. The army on land can move more towards a light and mobile intervention force with older MBTs for example.

    Kurt

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