之四十一43课件

Defense

EconomicsFrankKillelea

NationalSecurityAnalysisDepartment

JohnsHopkinsUniversityAppliedPhysicsLaboratoryMarch2019Note:AdditionalexplanatorymaterialcanbefoundintheNotesviewDistributionStatementA–ApprovedforPublicRelease;DistributionisUnlimited1概况1

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您的内容打在这里，或者通过复制您的文本后。+++整体概况AbstractThisanalysisidentifieseconomicsfactorsandconditionsthatareimportanttoanation-state’sabilitytodevelop,acquireandsustainsignificantmilitaryforcesandcapabilities.Itexaminesreadilyavailableeconomicdatawhichinfluencethesizeanddirectionofacountry’sdefensespending.Itislessapplicabletosubnationalandtransnationalthreatswhosefinancialandarmsrequirementstendtogetlostinthebackgroundnoise.ThisreportisanoccasionalpaperoftheAPLNationalSecurityAnalysisDepartmentItsideasareintendedtostimulateandprovokeseriousthinking.Noteveryonewillagreewiththem.ThereforeitshouldbenotedthatthisreportreflectstheviewsoftheauthoraloneanddoesnotnecessarilyimplyconcurrencebyAPLoranyotherorganizationoragency,publicorprivate.3ExecutiveSummary(1of4)Thisanalysisidentifieseconomicsfactorsandconditionsthatareimportanttoanation-state’sabilitytodevelop,acquireandsustainsignificantmilitaryforcesandcapabilities.Itexaminesreadilyavailableeconomicdatawhichinfluencethesizeanddirectionofacountry’sdefensespending.Itislessapplicabletosubnationalandtransnationalthreatswhosefinancialandarmsrequirementstendtogetlostinthebackgroundnoise.Thebaseyearforthisupdateis2019,thelatestyearforwhichdatawereavailable.Whereavailable,pertinentdataonsubsequentyearshavebeenincluded.Thisanalysisaddresses: Economicfactorsthatsupportorinhibitdefensespending DefenseandmilitaryR&Dspendingandtrends Weaponcostsandtrends Armstransfersandtrends Defenseindustriesandtrends Defenseeconomicsimpactonmilitarycapabilities DefenseeconomicsimpactonUSmilitaryspending Aneconomicallyinfluencedviewofglobalthreats.(Asymmetricthreatsareincludedtoremainconsistentwithdatacontainedinthepreviousexternalenvironmentassessment.)

4ExecutiveSummaryContinued(2of4)Sincelastupdated:GlobaldefenseandR&DspendinghastrendedupwardledbytheUS,China,andRussiatoalesserdegree.OthercountriesspendingmoreincludeIndia,Iran,BrazilandSouthKorea.Mostcountriesspending,however,haseitherremainedflatorincreased/decreasedslightly.Thevalueofglobalarmstransfers,whichdecreasedover70%fromthemid-80sthrough2019,hasshownnosignsoflevelingoff.Escalatingweaponscostshavecontinuedtooutpacedefensebudgetgrowthmakingitdifficult(actuallyimpossible)fornations,includingtheUS,toreplaceagingsystemswithnewmodelsonaone-for-onebasis.Fewcountriescanaffordtopurchaselargenumbersofmoderncombatsystems.Globaldefenseindustrieshavecontinuedtocontractandconsolidateviamergersandacquisitions,withcurrenttrendsfavoringnationalandcross-bordercollaborations(teaming)inanefforttosharedevelopmentandproductioncosts,andgainmarketaccess.Someinsights:DefenseeconomicsanalysisremainsusefulasameansofidentifyingcountriescapableofacquiringsignificantmilitarycapabilitiesthatcouldchallengeUSforces.Itcanalertdecision-makerstocountrieswithchangingmilitaryaspirations,andineffectprovideyearsofearlywarningtodevelopingthreats.Defenseeconomicscanalsohelpdecision-makersprioritizeweaponsspendingbaseduponglobalweaponsdevelopmentandacquisitionefforts.5ExecutiveSummaryContinued(3of4)Findings:Developingmilitarycapabilitiesinnationstatesislargelyafunctionofdefensespending.In2019,73%ofthecountriesworldwidespentunder$2Bondefense.ElevencountriesbesidestheUSspentinexcessof$10B,includingfourover$30B(China~$62B).Amongthecountriesspendingover$4B,Syria,Iran,RussiaandChinaareprobablytheonlyonesthatcouldbeconsideredpotentialadversaries.(Bywayofcomparison,theUSdefensebudgetinFY2019was$344.8B.)Escalatingcostsofallthingsmilitaryincludingweaponsdevelopmentandacquisition,personnel,operationsandmaintenance,andinfrastructurehaveledmanycountriestosmallerforceswithmixedinventories,retainingoldersystemslonger.ThehighcostofmilitaryR&Dhassignificantlylimitedthenumberofcountriescapableofdevelopingandproducingmodern,sophisticatedcombatsystems.Fewnewstate-of-the-artsystems,inallmajorweaponcategoriesarebeingdevelopedworldwide.Manycountriesrelyonotherstodevelopthenewsystemsandhopetheycanaffordafew.Unfortunately,thecostofthelatestmodelshasescalatedbeyondthereachofmostcountries,resultinginagrowingmarketforlesscostlyusedand/orupgradedcombatsystems.Theratioofdefensespendingandescalatingweaponscostsisthemostsignificantinfluenceaffectingacquisitions,forcesizeandmix,armssales,andtheglobaldefenseindustry.6ExecutiveSummaryContinued(4of4)FindingsContinued:Withouttheamortizationofweaponcostsacrosslargeunitbuys,thereislittlehopetoreducethecostofnewsophisticatedcombatsystemstoaffordablelevels.Itwillbecomeincreasinglydifficulttopreventsensitivetechnologytransfersbecauseofindustrialoffsetsrelatedtoarmssales,andcross-borderindustrialcollaborationstodevelop,producemodernweaponsystems.IntheUS,largefederalbudgetandtradedeficits,growingnationaldebtandrelatedservicingcosts,andincreasingsocial,welfare,health,infrastructureanddomesticsecuritycostswilllikelypressurenon-warrelateddefensespendingdownwardasearlyasFY2019.Defensemodernization(R&D,Acquisition)willlikeabsorbmostcutsasmilitarypersonnel,medical,andO&Maccountscontinuetogrowasashareofthedefensebudget.Expensiveprogramswilllikelybereduced,stretchedorcancelledtoaccommodatethereducedfunding.LikelycandidatesincludetheF/A-22,JointStrikeFighter,NationalMissileDefense,DD(X),LittoralCombatShip,AirborneLaser,ArmyFutureCombatSystem(FCS),andspacesystems.Transnationalthreatsarenotdependentonlargebudgetstofurthertheiraims.Theiremploymentofasymmetrictacticsandinexpensiveandreadilyavailableweaponsandexplosivesmakethemacontinuinganddangerousthreat.7CurrentandNear-TermGEO-POLOverview

UnsettledandChallengingPostColdWarPeriodUnsettledandDangerous

RegionalConflictsCouldInvolveUSTransnational

ThreatsMoreProminentRussia’sNationalInterestsStill

UncertainChinaPerceivesGreaterRegionalRoleNATO’sFutureRoleUnclear–EuropeMoreIntrospectiveUS

EngagedCounteringTransnationalThreatsSupportingDevelopingDemocraciesWillPreempttoDefendInterestsEmphasisonCoalitionOPSConflictingNationalInterestsChallengeCoalitionSolidarity,Effectiveness8InternationalDefenseEconomics

OverviewEconomicsAnalysisApplicabletoNation-States;MuchLessToTransnationalThreatsDefenseEconomicsAnalysisIdentifiesCountriesAbletoAcquireSignificantCapabilities,DevelopSophisticatedSystemsProvidesEarlyI&WofCountries’ChangingMilitaryAspirationsUnderstandingtheEconomicallyFeasibleThreat–ThatWhichisAvailable,AffordableandSustainable–CanHelpDefensePlannersFocusonPotentialAdversarieswithSignificantCapabilitiesPrioritizeWeaponsSpendingBasedonGlobalWeaponsDevelopmentandAcquisitionEffortsFewState-of-ArtSystemsinAllMajorCategoriesBeingDevelopedNotAsUseful

AssessingTransnational/TerroristThreatsOtherThanWMD,MostArmsAreLowTech,InexpensiveandAvailableDataNotReadilyAvailable9InternationalDefenseEconomics(Cont'd)

OverviewGlobalDefenseSpendingAffectedbyStrategicandEconomicConsiderationsDrivenbyBigSpenders,i.e.,US,WesternEurope,Japan,Russia,ChinaUnlikelytoReturntoColdWarLevelsinForeseeableFutureDefenseForcesSmallerPersonnel-andEquipment-wiseMixedInventories,withFewerModernSystemsGrowingPersonnelandOperatingCostsPressureProcurementMilitaryR&DInvestmentDrivenbyUS;WesternEuropetoLesserDegreeFewCanAffordFewNewSophisticatedCombatSystemsBeingDevelopedWorldwideEuropeNeedstoConsolidateR&DEffortstoReduceDuplicationandAchieveGreaterInvestmentMassArmSalesFewerDomesticSalesforNationalForcesStiffCompetitionAmongDefenseIndustriesforShrinkingForeignSalesProhibitiveNewWeaponsCostsIncreasingMarketforCheaper,Used,andUpgradedSystemsUpgradesandMaintenanceareNotCheap;PoolofUsedSystemsGrowingSmallerAnAreainDistressandInNeedofRealisticMarketAnalysis10RatioofDefenseSpendingandEscalatingWeaponsCoststheSingleMostSignificantInfluenceonAcquisitions,ForceSizeandMix,ArmsSales,andtheGlobalDefenseIndustryPreviousEffortstoReduceCostsLargelyUnsuccessfulMajorDefenseIndustrialRestructuringHasNotSlowedPriceEscalationStreamlinedAcquisitionProcedures,IncludingLessOversight,UseofCommercialProducts,Capabilities-BasedProcessNotTheAnswerStillWaitingforSignificantHi-TechSolutionsWithoutSignificantlyLowerWeaponCosts,ForeignSalesWillContinuetoDecreaseWithoutForeignSalesandSignificantNationalDemand,ProductionRunsWillBeShort,FewerUnitsProduced,andUnitCostsWillContinueToOutpaceDefenseBudgetsAmortizationofWeaponsCostsCriticalToLowerPricesEasyAnsweristoReduceCostsandSellMore–But–TheDevilisintheDetailsInternationalDefenseEconomics(Cont'd)

Overview11DefenseSpendingDeclineBottomedin’98–SlowClimbSinceMilitaryR&DSpendingAlsoBottomedin’98ArmsTransfersTrendStillDownSinceMid-80sHigherPriorityEconomicConsiderationsGainingGreaterShareofNationalBudgetsSophisticatedWeaponsCostMoreThanSystemsBeingReplacedFewerCostlyNewHi-TechSystemsBeingAcquired,DevelopedGreaterCompetitionForFewerArmsSalesLeanerDefenseIndustriesSophisticatedSystemsAvailable,butFewCanAffordManyTransnational/Terrorist

ThreatsDon’tNeedLargeBudgets,ExpensiveWeaponsDefenseEconomics

Summary

GlobalDefenseSpending12NotionalWorldwideDefenseSpendingTrendsDEFENSEBUDGETSR&DWEAPONSTRANSFERS20192019MID-80sCONSTANT2000$TIME$WEAPONCOSTS2019VG#713DefenseSpending

EconomicFactorsEconomicFactorsImpactWorld-WideDefense

AspirationsIncreasingSocial,Welfare,InfrastructureCompetitionforLimitedRevenuesVaryingCombinationsofStagnantEconomies,BudgetDeficits,LargeExternalDebt,CurrencyDevaluation,HighInflation,TradeDeficits,LimitedForeignReserves,andGrowingPopulationDriveDefenseBudgetsDown.AutocraticRegimesCanDelayThisForAwhile.14DefenseSpending

KeyEconomicDataEconomicFactorsThatAffectDefenseSpendingGrossDomesticProduct(GDP)*Population/GrowthRate/LiteracyRatePerCapitaIncomeNaturalResourcesIndustrial/Agricultural/OutputExports/Imports–BalanceofPaymentsRevenues*BudgetSurplusorDeficit*ExternalDebt*Inflation*CurrencyDevaluation*DefenseBudget/Allocation**MajorInfluences15Macro-EconomicFactorsInhibit

DefenseBudgetsSustainedannualGrossDomesticProduct(GDP)growthbelow3%,or

negativegrowthSustainedannualinflationrateover15%Externaldebtequaltoorgreaterthanannualgov’trevenuesExternaldebtequaltoorgreaterthan50%ofGDPNote:Presenceofmorethanonefactorincreasesnegativepressureondefensebudget.Currentyear+1+2+3+4EconomicFactorsCurrentdefensebudgetlevelLess$More$16WorldwideGDP&DefenseSpendingTrends198619871988198919901991199219931994201920192019140120100806040200Index:1986=100Note:Overthisperiod,worldwideGDP,excludingtheU.S.increasedbyaround36percentwhiledefensespendingdecreasedbyover30percent.Source:DIADI-1912-15-00,DefenseIntelligenceReferenceDocument,“Worldwide

DefenseExpenditures,2019(U),”Jun2000TheWorldBank:“2019WorldDevelopmentIndicators” SIPRIYearbook-2019 WorldBankDevelopmentIndicatorsDataBank,4Jun2019query20192019DEFENSESPENDINGGDP200020192019VG#11172019EconomicData(1of4)Source:TheWorldBank“WorldDevelopmentIndicators–04”SIPRIYearbook–2019CIA“TheWorldFactbook2019”IISS“TheMilitaryBalance

2019/2019”Note:*Rangeofvaluesreflectdifferingdefensebudgetestimatesinsourcedocuments.CountryGDP

$BU.S.Revenues$BU.S.DefenseBudget

$BU.S.–2000$Nat’lBudget±$BU.S.ExternalDebt

$BU.S.CurrentAccount

TradeBalance$BU.S.ForeignExchange$BU.S.ArgentinaBrazilChileSouthAfricaEgyptIranIsraelSaudiArabiaSyriaGreeceTurkeyFranceGermanyItaly$102.0452.464.2104.289.8108.2103.7188.520.8132.8183.71,431.31,984.11,184.344.0100.617.022.621.529.538.546.06.045.042.4286.0802.0504.02.99.962.32.22.78.79.821.61-5.4*5.310.133.627.721.1-4.09.0−-2.1-0.4-2.1-6.6-10.5-1.0-2.6-26.7-44.0-23.0-13.0132.3227.919.225.030.89.243.0(01$)est.

25.921.563.4131.6−−−9.6-7.7-0.60.30.712.6-1.211.71.1-10.43.425.746.6-6.710.537.815.37.814.1−24.122.2−9.428.361.789.155.6182019EconomicData(2of4)CountryGDP

$BU.S.Revenues$BU.S.DefenseBudget

$BU.S.–2000$NATLBudget±$BU.S.ExternalDebt

$BU.S.CurrentAccount

TradeBalance$BU.S.ForeignExchange$BU.S.SpainU.K.IndiaPakistanIndonesiaMalaysiaSingaporeChinaSouthKoreaNorthKoreaTaiwanJapanRussiaU.S.653.11,566.3510.259.1172.994.987.01,266.0467.7−406.03,993.4346.510,383.1105.0565.048.312.626.020.327.9224.8118.1−36.0441.070.01946.07.136.012.93.21.81.94.761.513.51.57.346.715.7336.0-4.025.0-27.9-2.2-4.0-6.98.4-42.322.4−-0.1-277.08.0-106.0−−104.533.7132.248.68.2168.2132.5(01$)−24.7−147.5−-15.9-14.44.63.97.87.218.735.46.1−17.0112.429.9-480.940.342.871.68.832.034.682.0297.7121.5−−469.648.3157.8Source:TheWorldBank“WorldDevelopmentIndicators–04”SIPRIYearbook–2019CIA“TheWorldFactbook2019”IISS“TheMilitaryBalance

2019/2019”Note:*Rangeofvaluesreflectdifferingdefensebudgetestimatesinsourcedocuments.192019EconomicData(Cont’d)(3of4)NegativeInfluencesGDPGrowth–PopulationGrowth<3%>20%>10%>15%≥50%≥100%Def.SpendingProjectionCountry%Population

Growth%GDPGrowthDef.ShareofRevenuesDebtServiceShareofRevenuesInflation%Debtas%ofGDPDebtas%ofRevenuesArgentinaBrazilChileSouthAfricaEgyptIranIsraelSaudiArabiaSyriaGreeceTurkeyFranceGermanyItaly1.2%1.61.52.32.22.32.43.93.00.42.00.40.20.1-10.9%1.52.13.03.06.70.81.02.74.07.81.20.20.46.6%9.913.59.712.629.525.447.017-90.0*11.823.811.73.44.227.5%11.32.117.512.0est.0.712.92.3est.17.9est.7.0est.27.6est.

−−2.441%8.32.59.94.315.35.71.00.93.645.21.81.32.4130%50.430.324.434.08.541.014.0103.048.072.0−−−300%228.0113.0111.0143.031.0112.056.0358.0141.0310.0−−−↓↓--↓-↓↑-↓-↑↓-↓???Source:TheWorldBank“WorldDevelopmentIndicators–04”SIPRIYearbook–2019CIA“TheWorldFactbook2019”IISS“TheMilitaryBalance

2019/2019”Note:*Rangeofvaluesreflectdifferingdefensebudgetestimatesinsourcedocuments.202019EconomicData(Cont’d)(4of4)Source:TheWorldBank“WorldDevelopmentIndicators–04”SIPRIYearbook–2019CIA“TheWorldFactbook2019”IISS“TheMilitaryBalance

2019/2019”Note:*Rangeofvaluesreflectdifferingdefensebudgetestimatesinsourcedocuments.NegativeInfluencesGDPGrowth–PopulationGrowth<3%>20%>10%>15%≥50%≥100%Def.SpendingProjectionCountry%Population

Growth%GDPGrowthDef.ShareofRevenuesDebtServiceShareofRevenuesInflation%Debtas%ofGDPDebtas%ofRevenuesSpainU.K.IndiaPakistanIndonesiaMalaysiaSingaporeChinaSouthKoreaNorthKoreaTaiwanJapanRussiaU.S.0.40.21.92.51.62.62.51.21.01.20.650.40.20.922.01.84.62.83.74.12.28.06.31.03.50.34.32.46.86.426.725.46.99.416.827.411.4−20.310.622.417.3−7.737.158.421.611.9est.1.33.7est.5.6est.−3.4est.−9.510.83.02.15.43.911.91.9-0.4-0.82.8−-0.2-0.915.01.6−−20.057.076.051.019.013.028.0−6.1−43.04.0−−216.0267.0508.0239.029.075.0112.0−69.0−210.0−??−↓↓↓-↓↑↑↑-↑↑?-↓−21Defense

Spending22DefenseSpending

OverviewWorldwideDefenseSpending

Bottomedin2019FewerProducersofHighEndsystemsMoreEmphasisonAffordabilityandInternationalCollaborationandConsolidationinProductionandR&DUS,WesternEurope,Japan,RussiaProduceHighTechnologySystems;ROWCountriesDon’tR&DDown60%from1986to2019;Up12%from’98SystemUpgrades,SoftwareModifications,DualUseTechnology,AsymmetricandTerroristThreatsEmphasizedArmsTransfersDownover70%SinceMid1980sGreaterCompetitionforFewerSalesasIndustriesFightforSurvivalMajorSuppliers:US,Russia,France,UK,Germany23DefenseSpending

SmallerInventoriesandUpgradesNewWeaponSystems2-5TimesMoreCostlyThanOlderSystems.FewOne-for-OneReplacementsMostWeaponSalesRequireHardCash,Pay-BackLoans,orBarteratMarketPrices.FewDiscountsorGrant-Aid.ManyCountriesLackForeignReservestoBuyNewSystems.SophisticatedWeaponSystemsAvailableButFewCanAffordThemSeventy-ThreePercentofCountries2019DefenseBudgetsUnder$2BinUS2000$Under$800MillionForProcurementEmphasisOnSystemUpgrades,andMoreCapableUsedSystemsSustainedDefenseSpendingOver$2BillionBuysSomeSophisticatedSystems24WorldwideDefenseBudgets–2019Ref:9800648B_UK.PPT-40102030405060708090100DefenseBudgetsinBillionsConstantU.S.2000DollarsNumberofCountries0$0.51.02.03.04.05.07.010.015.030.0>30.0N.KOREAINDONESIAEGYPTKUWAITCOLOMBIABELGIUMPOLANDNORWAYPAKISTANSWEDENSINGAPORENETHERLANDSSYRIAAUSTRALIAGREECEIRANBRAZILTAIWANCANADASPAINISRAELTURKEYS.KOREAINDIAS.ARABIAGERMANYRUSSIAITALYCHINA 61.5JAPAN 46.7U.K. 36FRANCE 33.6Notes: IncludesallcountrieslesstheU.S.,Sources: “SIPRIYearbook2019”and“TheMilitaryBalance2019/2019”90144136263449VG#192510-YearDefenseBudgetGrowth(%)

1993→20190510152025NumberofCountriesLIBYABELARUSCROATIAZAMBIATAIWANARGENTINAVENEZUELAN.KOREATHAILANDANGOLACHADSIERRALEONEGUATEMALAURUGUAYPARAGUAYAZERBAIJANU.K.GERMANYCANADASWITZERLANDPERUMOZAMBIQUERWANDASEYCHELLESZIMBABWEBRUNEIMONGOLIAALBANIAKAZAKHSTANUSARUSSIASPAINNETHERLANDSAUSTRALIABELGIUMAUSTRIAFINLANDSENEGALELSALVADORBULGARIAYEMENJAPANPAKISTANDENMARKNORWAYPOLANDSWEDENEGYPTMOROCCOHUNGARYROMANIALEBANONGHANANICARAGUAMALTAITALYKUWAITMALAYSIACZECHREP.PHILIPPINESBURKINAFASOCAMEROONMADAGASCARBOLIVIAINDIABRAZILCOLOMBIASINGAPORELETHOSOMALINAMIBIANIGERIATANZANIAECUADORARMENIALUXEMBOURGECHINAALGERIASUDANUGANDANEPALUKRAINEETHIOPIAESTONIALATVIALITHUANIA10YearGrowth -100% -50% -25% -10% 0% +10% +20% +50% +100% +150% +250%Avg.Ann.Growth -10% -5% -2.5% -1% 0% +1% +2% +5% +10% +15% +25%Source:SIPRI2019;MilitaryBalance2019-2019>$10B$5-10B$2-5B$1-2B$0.5-1B<$0.5BCONSTANTU.S.2000$VG#20S.KOREASAUDIARABIATURKEYGREECEIRANISRAELSYRIAMEXICOCHILEPORTUGALOMANBANGLADESHSRILANKAIRELANDJORDANTUNISIABOTSWANABURUNDIKENYAPANAMACAMBODIACYPRUSSLOVAKIABAHRAIN26EstimatedWorldwideDefenseModernization

Funding–2019Ref:9800648B_UK.PPT-4Notes: Modernizationincludesallforces(Ground,Air,NavalPlatforms,Weapons,Sensors)

$inbillionsofconstantU.S.2000dollars

IncludesmostcountrieslesstheU.S.PrimarySources:“SIPRIYearbook2019”and“TheMilitaryBalance2019/2019”DefenseBudgets>30.00102030405060708090100NumberofCountries0$0.51.02.03.04.05.07.010.015.030.0N.KOREAINDONESIAEGYPTKUWAITCOLOMBIABELGIUMPOLANDNORWAYPAKISTANSWEDENSINGAPORENETHERLANDSSYRIAIAUSTRALIAGREECEIRANBRAZILTAIWANCANADASPAINISRAELTURKEYS.KOREAINDIAS.ARABIAGERMANYRUSSIAITALYCHINA 61.5JAPAN 46.7U.K. 36FRANCE 33.690141362634494DefenseFundsforForceModernization20and40%$20% $0.1 0.2 0.4 0.6 0.8 1.0 1.4 2.0 3.0 6.0 >6.0$40% $0.2 0.4 0.8 1.2 1.6 2.0 2.8 4.0 6.0 12.0 >12.0VG#2127DefenseSpending

Trends

TrendingUpwardSince2019,

LedByUS(+46B),China(+13.3B),Iran(+8.1B),Russia(+4.3B),India(+3.5B),Brazil(+2.1B)LikelytoContinueUpwardNear-Term,InfluencedByUS,China,Russia,SouthKorea,andIndia.EconomicDevelopmentsCouldSloworReverseTrendWorldwideDefenseSpendinginBillionsUS2000$

1988

1993

2019

2019 909 762 690 784Sources:SIPR12019,2019,2019 IUSSMilitaryBalance2019-201928FewerNewHigh-TechnologyWeaponSystemsLikelytobeDevelopedandFieldedOverNext10-20YearsBecauseofCostsMostCountries’DefenseSpendingFlatorNegativeOverTimeUnlessInvolvedinorPreparingforConflict,Insurgencies,ortheWaronTerrorismSources:SIPRIYearbooks–2019,2019,2019 TheMilitaryBalance–2019-2019DefenseSpending(Cont'd)

Trends

29DefenseR&D/S&T30R&DDown60%from86to98:Up12%from98to20192019EstimatedSpendingat$66Billionin2000$$50.6BbyUS;$57.4BbyNATOMostforAircraftRelatedProgramsNineBesidesUSSpendingOver$500MilliononR&DUS,Russia,China*SpendingMorein2019R&DBudgetsCompetewithProcurement,Personnel,MaintenanceandOperationalReadinessAccountsAggregateWorldwideDefenseR&DSpendingLikelytoIncreaseNear-TermasUS,Russia,China*SpendMoreEuropeanR&DLikelytoDecreaseSomewhatasMajorAircraftPrograms(RAFAEL,EUROFIGHTER,A400Transport)TransitiontoProductionWorldwideMilitaryR&DSpending

OverviewNote:*ChinaHasMadeR&DaPriority;ChineseR&DFundingFiguresAreBestEstimatesSources:SIPRIYearbooks–2019,2019,2019 IISS“TheMilitaryBalance2019-2019”31EstimatedWorldwideMilitaryR&DSpending-2019012345678910R&DSpendinginConstant2000U.S.DollarsNumberofCountries$50M100M200M500M1.0B2.0B5.0BPAKISTANSWITZERLANDNORWAYNETHERLANDSPOLANDUKRAINEISRAELARGENTINAGREECESPAINAUSTRALIAS.AFRICACANADASINGAPOREBRAZILTAIWANSWEDENITALYINDIAIRANFRANCES.KOREAGERMANYCHINAJAPANRUSSIAU.K.Notes: Includesonlycountriesspending>$50millionSources: SIPRIYearbooks–2019,2019,2019DefenseNews,2Feb04Ref:9800648_UK.PPT-7U.S.$50.6B66.3Bin201932WorldwideMilitaryR&DSpending1989*($)2019($)2019($)2019($)2019($)US51.042.542.644.550.6UK4.13.93.73.9--Japan1.11.8*1.2****----Russia--0.970*----1.04China--1.0**------Germany3.11.71.41.20.749France7.13.43.13.50.707India0.4100.630*0.632****0.6950.625S.Korea0.1700.510*------Sweden0.6800.570***0.1000.3000.400Italy0.7500.4000.1000.400--Spain0.4600.7001.21.70.167S.Africa0.4800.150***------Canada0.2300.120***0.114****----Norway--0.1000.1000.1000.100Netherlands--0.1000.1000.100--BillionsofUSConstant2000$*2019$**1994$***2019$****2019$Source:SIPRI“Yearbook2019,2019”IISS“TheMilitaryBalance”2019-2019VariousDefenseNewsEditions33WorldwideR&D

SophisticatedSystemsCostlyHighTechnologyWeaponsDevelopmentProgramsCostlyMostinUS,WesternEurope,Japan,andRussiaSituationNotExpectedtoChangeBecauseofHighR&DandManufacturingInfrastructureCostsAssociatedwithHighTechnologyDevelopmentProgramsMostROWCountriesRelyonForeignAcquisitionofComplexWeaponSystemsState-of-the-ArtCombatAircraft,NavalCombatants,MainBattleTanks,IADs,etc.34WorldwideR&D(Cont'd)

SophisticatedSystemsCostlyMostROWCountriesCan’tDevelopHighTechSystemsMainImpedimentstoHighTechnologyDevelopment:FundingTechnicalEducationandPoolofScientistsandEngineersWell-EquippedResearch,Laboratory,andTestFacilitiesNaturalResourcesManufacturingFacilitiesandCapabilitiesSkilledWorkForceQualityControlTechnologyBaseandInfrastructure35WorldwideR&D(Cont'd)

SophisticatedSystemsCostlySomeROWCountriesProduceLowtoMediumTechnologySystemsBasedonCo-ProductionandReverseEngineeringofAcquiredSystemsGroundForceWeapons,Vehicles,MLRS,SmallPatrolCraft,TrainingAircraftSomeProduceNicheHighTechnologySystemswithForeignAssistanceTBMs,WMD,Helicopters,UAVs,Anti-ShipCruiseMissiles,DieselSubsIndustrialOffsets,CollaborationsandConsolidationsFutureWildCards?Source:SCCS36WorldwideHighTechnologyWeaponDesignand

DevelopmentCapabilitiesNoneVerylimited.Dependentonforeignweaponsacq.andrelatedco-production,reverseeng,andtechtransfertoproduceafewlowtomediumtechnologysystems.Somelowtomediumtech.design,development,productioncapability.Needsforeignassistanceinsomeareas.Fewnichehightech.capabilities.Reliesonforeignweaponsacquisitionandrelatedco-production,reverseengineeringandtech.transfer.Broadlowtomed.tech.capabilities.Broadmed-tech.capabilities;capableofdesigning,developing,producingmanyhigh-techsystems;externalassistancerequiredforhighperformanceaircraftandothercomplexsystems.Broadhigh-tech.design,developmentandproductioncapabilities.Indigenouscapabilitytodevelop,producehighperformancecombataircraft,missilesandotherhighlycomplexsystems.Ref:0400346_UK.ai37WorldwideMilitaryR&DTrendsWithoutaClearTechnologicallyAdvancedThreat,oraMarketforCostlyHighTechSystems,R&DInvestmentWillDecrease,andthePaceofTechnologyDevelopmentWillSlowMoreforCounter-Terrorism,HomelandDefense,AsymmetricThreatsFewerHighTechWeaponSystemsWillbeDevelopedinallMajorCategoriesDevelopmentandAvailabilityofNewG