{"id":9124,"date":"2013-09-10T06:00:55","date_gmt":"2013-09-09T20:00:55","guid":{"rendered":"http:\/\/www.aspistrategist.ru\/?p=9124"},"modified":"2013-09-11T08:41:42","modified_gmt":"2013-09-10T22:41:42","slug":"2-of-gdp-it-might-be-logical-but-is-it-rational","status":"publish","type":"post","link":"https:\/\/www.aspistrategist.ru\/2-of-gdp-it-might-be-logical-but-is-it-rational\/","title":{"rendered":"2% of GDP: it might be logical, but is it rational?"},"content":{"rendered":"

\"budget_sign\"<\/a>Remarkably, there\u2019s now bipartisanship in Australian Defence.\u00a0Both major parties agree<\/a> that the Defence Budget should be 2% of GDP. The only difference is the timing in getting there.\u00a0While some express doubts<\/a>, there\u2019s a certain logic to this position. Its rationality is less easily discerned.<\/p>\n

Logically this declaration cuts through worries about strategy or the ADF\u2019s role. There are some who see the Defence budget as buying insurance; the more you buy, the less you\u2019ll lose if some predetermined event occurs. Seen this way it\u2019s just like car insurance\u2014spend a bit and get third party, spend more for comprehensive, spend even more and cover the windscreen, lower the excess and so on.\u00a0The attraction of this risk management policy<\/a> is that it avoids having to have a strategy.\u00a0And devising strategies are intellectually demanding.\u00a0We\u2019re still recycling Paul Dibb\u2019s 1987 deterrence by denial strategy\u2014even though the Cold War has ended, China\u2019s risen, the Arab Spring has come (and gone?) and cyber war is the new black.<\/p>\n

You can see this in the two contenders for Defence Minister in the election just gone. Both had much advice from inside and outside the Department yet, as James Brown wrote, neither<\/a> offered a thought-out \u2018strategy\u2019 although they both have well-formed views on new military hardware.\u00a0Arguing about the number of submarines or debating the value of the JSF\u2019s stealth is where people feel more comfortable. They\u2019re numbers, after all. And in the case of the JSF, even better\u2014it\u2019s classified, so no one outside a small cabal can even talk about it.\u00a0Perfect one might argue, but this is where a focus on money leads to: talking about what you buy, rather than why you need it and where it fits into the big picture.<\/p>\n

So the 2% budget figure is wonderful for dragging the debate away from intellectually hard areas and into an area easy to understand. Who needs those pesky strategies anyway\u2014just buy stuff and hope for the best.<\/p>\n

The logic appears appealing but is it rational\u2014why 2%, rather than 1.5% or 2.5%, or even 3%? It\u2019s illustrative to see where the number came from.\u00a0At the start of the last decade NATO was casting around for something to define its new approach in the new century and this figure arose from that. It was solemnly agreed that, irrespective of circumstances, defence budgets would be 2%. A decade on and only the US, UK and Greece reach this target; the other 25 nations are falling short<\/a>.<\/p>\n

Well that\u2019s Europe for you! No threats and plenty of economic woes to worry about. The Asian landscape is a bit different. DIO helps with some data here<\/a>\u00a0(PDF). South Korea (2.5%) and Taiwan (2.3%) both exceed the NATO guideline\u2014someone might think they really do have a threat, although both spend a fair chunk of their defence budget on their national defence industries; building military hardware is seen as nation building.<\/p>\n

Closer to home, Vietnam (2.4%) and Singapore (3.6%) also spend more than 2%\u2014it seems that conscription is expensive.\u00a0Those that spend less than 2% include China (1.3%), Japan (1.0%), Indonesia (0.9%), Malaysia (1.4%), Thailand (1.5%) and the Philippines (1.0%). India does spend the magic 2%.<\/p>\n

It\u2019s hard to draw meaningful comparisons here. David Kang aggregates East and South East Asia and finds that both US-allies and non-US allies now spend an average of about 1.73% GDP<\/a> on Defence (2012 figures).\u00a0The large nations spend less than 2%, some of the smaller ones more.\u00a0Some that border China spend more, some that border China spend less.\u00a0Of course, that\u2019s just the share–it\u2019s true that as the Asian nations\u2019 economies develop, they spend more in absolute terms. A small GDP allocation in a fast growing economy can bring a lot more in each year.<\/p>\n

Trends are interesting here. Over time the defence spending decline is remarkable. Since the end of the Cold War average defence spending in GDP terms has halved.\u00a0Perhaps nations feel safer now than before.\u00a0But we plan for the future, not the past, and the trend lines suggest that defence spending may well be plateauing.\u00a0Thus 1.7% of GDP may be the new norm.<\/p>\n

What do all these numbers mean for us? Certainly raising to 2% will make us stand out from the crowd\u2013and Mark Thompson\u2019s calculated sustained 5.3% annual increase in the defence budget<\/a> will be one of our biggest ever peacetime arms buildups.<\/p>\n

Then there are the dangers of security dilemmas starting unnecessary arms races\u2014others might wonder what we know that they don\u2019t.\u00a0Or maybe our intentions aren\u2019t seen as benign.\u00a0In the reverse situation we\u2019d argue that intentions can change overnight but capabilities take longer to build up, so commentators would argue that we should re-arm in response.\u00a0Certainly some in Indonesia harbour some doubts about us.\u00a0Will we be more secure if we encourage others to re-arm? It\u2019s hard to determine if a sudden Defence budget increase is rational in regional terms or not. No one else is doing it, but maybe we\u2019re special!<\/p>\n

And that returns us to the logic. As already mentioned, it lets us avoid thinking but there\u2019s another interested party here\u2014the US. Having failed to convince any others to embrace 2%, they\u2019re now lobbying hard here<\/a> (and here<\/a>). The US would be delighted if we spent more\u2014with our tendancy to buy much of our equipment for hard cash from America suppliers being a handy bonus. And the US is quite happy to provide<\/a> our missing strategy for us. They\u2019d simply like us to bring more military might to the coalitions they lead. For the US, our Ministerial aspirants and those selling insurance, Australian thinking about having a defence strategy is most unnecessary and indeed might be unhelpful. Avoid troubling headaches, go 2%! It’s only money<\/a>\u2026<\/p>\n

Peter Layton is undertaking a research PhD in grand strategy at UNSW, and has been an associate professor of national security strategy at the US National Defense University<\/em>. Image courtesy of Flickr user 401(K) 2013<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Remarkably, there\u2019s now bipartisanship in Australian Defence.\u00a0Both major parties agree that the Defence Budget should be 2% of GDP. The only difference is the timing in getting there.\u00a0While some express doubts, there\u2019s a certain logic …<\/p>\n","protected":false},"author":13,"featured_media":9128,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"footnotes":""},"categories":[19],"tags":[44,40,120,107],"class_list":["post-9124","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-policy-guns-and-money","tag-australian-defence-force","tag-alliance-2","tag-budget","tag-policymaking"],"acf":[],"yoast_head":"\n2% of GDP: it might be logical, but is it rational? | The Strategist<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.aspistrategist.ru\/2-of-gdp-it-might-be-logical-but-is-it-rational\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"2% of GDP: it might be logical, but is it rational? | The Strategist\" \/>\n<meta property=\"og:description\" content=\"Remarkably, there\u2019s now bipartisanship in Australian Defence.\u00a0Both major parties agree that the Defence Budget should be 2% of GDP. 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