Thursday, July 12, 2018

NATO Spending - Who is Paying Their Share?

With the global anti-Russia movement well entrenched and with it being the target of NATO, let's look at a document from NATO showing its member states' military expenditures, a factor that is particularly pertinent given Donald Trump's ongoing anti-NATO rants.  

Let's start by looking at the raw military expenditure data for NATO going back to 2010, breaking the expenditures into what was spent by the United States and what was spent by the combination of European member states and Canada:

As you can clearly see, the United States has been responsible for at least two-thirds of NATO's total spending on defence over the past eight years.

Here is a table showing the actual expenditures in millions of U.S. dollars for all NATO member states from 2010 to the present:

It is estimated that, in 2017, the United States defence spending totalled 71.6 percent of total defence spending by all NATO member states.

Here is a graph showing defence spending as a percentage of GDP for the United States compared to European member states and Canada:

Here is a graph showing each member states' estimated defence expenditures as a percentage of GDP and equipment expenditures as a share of total defence expenditures during 2017:

As you can clearly see, at 3.57 percent of GDP and at 28 percent of defence expenditures being for equipment, the United States is well above the respective targets of 2 percent and 20 percent.  All nations outside of Greece, Great Britain, Poland and Estonia spend less that the 2 percent of GDP as you can see on this graphic:

In fact, the median spending on defence as a percentage of GDP by NATO member states is only 1.29 percent (including the United States and the other nations spending above the target).

Let's look at some key NATO nations and their estimated 2017 spending on defence as a percentage of their total economies:

Belgium - 0.9 percent
Canada - 1.29 percent
France - 1.79 percent
Germany - 1.24 percent
Netherlands - 1.15 percent
Norway - 1.62 percent
Spain - 0.92 percent
United Kingdom - 2.12 percent

If we go back in time, we can see that NATO's European member nations and Canada have a long history of spending well less than the 2 percent target as shown here:

We have to go back all the way to 1997 to see the non-U.S. NATO member states spending more than the 2 percent of GDP guideline.  We can also see that the United States spends between two and three times as much (as a percentage of its GDP) on its military than NATO's European member states and Canada. 

Lastly, here is a table showing defence expenditures on a per capita basis for all NATO member states going back to 2010:

At $1896, the United States far outspends all other nations with only Norway (at $1481) even coming close.  Even the United Kingdom, one of the biggest defence spenders, only spends $896 on defence on a per capita basis.

While Donald Trump has focussed on the defence spending aspect of NATO, let's look at a table which shows the total military personnel in each of the member states:

With 1.306 million military personnel in 2017, the United States employed 41.3 percent of all military personnel in NATO.
The controversy over NATO funding is not going to disappear any time soon.  With Donald Trump appearing to backtrack on his threat to leave NATO without Congressional approval and NATO's agreement to spend an additional $33 billion on their own defence, the data that I have presented in this posting shows that Europe has simply put a bandaid on a long-term, underspending issue given that the extra spending is only 3.4 percent of the $957 billion that NATO nations spent in total on defence in 2017.

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