The International Institute for Strategic Studies (IISS) reports that the world has entered a more dangerous period in the past 12 months, with rising tensions and conflict reshaping the global defense industry landscape.
Data published in the new IISS Military Balance 2024 shows how countries are restructuring their equipment and spending plans, and how regional relationships are changing in response to geopolitical realities. I am.
The military balance of the IISS is affected by the deteriorating security environment represented by a growing number of conflicts, including the Hamas-Israel war, Russia's continued aggression against Ukraine, the occupation of Azerbaijan's Nagorno-Karabakh region, and coups in Niger and Gabon. It shows. as China's more aggressive maneuvers around Taiwan and in the South China Sea.
In Ukraine, losses of Russian equipment continue on a large scale. IISS analysts estimate that the full-scale invasion cost Russia more than 3,000 main battle tanks. This is roughly the same number of tanks the Kremlin had in active duty before February 2022. Russia is using stored equipment to replace losses.
Meanwhile, Ukraine relies heavily on Western equipment to maintain inventory levels and support deep combat to attack targets beyond the front lines. But Kiev continued to demonstrate its ingenuity in other ways, using Western and indigenously developed systems to outnumber Russia's Black Sea Fleet. It also demonstrated the utility of unmanned maritime vehicles (UMVs), providing a boost to technologies that other navies have been exploring.
The combination of Russia's war with Ukraine and rising tensions with China and the West are the main drivers of military spending. Global defense spending is at a record high of $2.2 trillion, up 9% from a year ago, and is expected to rise even further in 2024, based on already announced spending commitments.
This era of uncertainty is resetting the landscape of the global defense industry. The United States and Europe are ramping up production of missiles and ammunition, and although progress is slow, these efforts are expected to soon yield greater defense production capacity after decades of underinvestment. As Russia focuses on military equipment, some long-term buyers of weapons from Moscow are turning to other countries.
IISS reveals that NATO countries other than the US are now spending a total of 32% more than they did when Russia invaded Crimea in 2014, highlighting how Russia's actions are prompting a Western response It shows. But there are also suggestions that the spending will only solve long-standing problems, with inflation remaining a concern, including more than doubling the cost of some types of ammunition. Although the problem of Western countries' fundamental inability to keep up with demand is being resolved, disparities remain significant.
While Western countries have increased spending, so have China and Russia, which now devote more than 30% of government spending to military spending. The past year also showed how some militaries are reviving interest in neglected equipment such as artillery and air defense, while embracing new technologies such as hypersonic gliders, cruise missiles, or direct attack weapons. Ta. Nuclear weapons are also back on the agenda, with China adding missile silos and the United States modernizing its warheads and delivery systems.
sub-saharan africa
ISS noted that Niger joined the list of countries in the Sahel region where the military staged a coup in July 2023 and ousted an elected government. The coup was particularly shocking to some Western countries, such as France and the United States, which had accepted cooperation with Niger's military to fight Islamic terrorists in the region. Some African countries considered intervening in Niger to restore an elected government, but decided not to. The United States had suspended anti-terrorism drone operations in Niger after the coup, but has since resumed them.
Unrest in Ethiopia has led to a significant increase in defense spending as the country seeks to restore order. Addis Ababa has more than tripled its defense budget from 22 billion ETB ($430 million) in 2022 to 84 billion ETB ($1.5 billion) in 2023. Ethiopia's Amhara region has seen rising tensions with local forces ready to confront the Ethiopian Defense Forces.
Mali has asked the United Nations to suspend operations in the country. In June, the United Nations Security Council agreed to end its operations in the country after nearly 10 years.
Angola's defense spending levels have declined somewhat in recent years as it deals with a weak currency and years of recession. Angola's defense budget in dollar terms has consistently exceeded Nigeria's in recent years, and is the second highest in the region after South Africa.
Africa is an increasingly important market for relatively new defense exporters. Turkiye won a shipbuilding contract in Nigeria last year, and the company has won unmanned aerial vehicle and other contracts in Senegal, Togo and Chad. The United Arab Emirates has also begun supplying arms to some African countries. Exporters are making inroads as Russia focuses on meeting domestic equipment needs.
Gabon's coup in late August following a disputed election returned Ali Bongo to power and would have extended his family's tenure in office for more than 50 years. The coup appeared to be driven more by electoral developments than by the terror concerns that have prompted such overthrows in other parts of Africa.
South Africa
The IISS noted that regional spending in 2023 will still be dominated by large, populous countries, with six states accounting for more than half of the region's defense spending. In 2023, South Africa will allocate R52 billion to defense, making it the region's largest military budget despite long-term funding cuts. South Africa's defense spending as a percentage of GDP fell below 1% for the first time in 2016, and the level has fallen further since then. In real terms, defense spending has consistently declined since 2021 as budget growth has not kept pace with inflation. In response to financial instability, the South African government cut budget allocations in an effort to contain debt and reduce economic risks.
Debt levels are expected to stabilize sooner than expected, while the 2022 medium-term budget policy statement suggests defense funding will increase with additional spending to strengthen border security. The IISS report said Pretoria also emphasized the acquisition and maintenance of deployable medical and naval equipment, although modernization ambitions have been undermined by reduced funding.
Although military spending recovered in 2023, defense industrial capacity remained hampered by the region's historic lack of sustained spending. South Africa has the most developed arms industry in the region, but it has struggled in recent years. The South African Department of Defense's strategic plan states that the deteriorating economic outlook and the need to reduce defense spending will lead to significant industrial challenges. In 2022, Denel was due to receive a bailout of approximately R3.4 billion through the 2022 Special Appropriations Act. This required the company to implement a turnaround plan and provide greater clarity on how it would develop a sustainable business model. This includes significant job cuts, with employment levels down 33% from 2021. In 2023, Denel reported a profit of R390 million and aimed to use its improved financial position to rebuild its skilled workforce following the loss of highly specialized staff.