A considerable proportion of the resources of each nation is allocated to military expenditure, constituting an economic burden. Militarization often has an important influence on capital intensity and import dependence of their economies. One purchase of military equipment and weapons systems often enhances propensities for subsequent additional expenditures. Both indigenous military production and production of military equipment and components under arrangements for the transfer of technology require substantial imports and other expenditures of foreign exchange. In addition, many development opportunities are lost (whether within a country or in the form of aid to another country) because of the higher priority accorded to such expenditure.
World military spending has been increasing annually in real terms – at 3% growth, this spending is outstripping GNP growth in many countries, so that national budgets are burdened with an ever higher percentage for military outlays.
Global military expenditure in 1985 was in excess of $900 billion. World military expenditure rose from an estimated US$ 100,000 million in 1950 to $190,000 million in 1970 (the USA and the USSR between them sharing about 85% of this); for 1983, the SIPRI estimate for world expenditure (at current prices) was $800,000 million, or (for comparison purposes) $600-650,000 million at 1980 prices, with the USA spending about $185,000 million of this and its NATO allies about $120,000 million. The United Nations estimates the current annual world military expenditure to stand at about $1,000,000,000,000. Global military expenditure has risen from an estimated 4.7% of world output in 1960 to over 6% in 1985, namely an increase of about 150% in constant price terms.
In the USA, the 1984 defence budget was US$ 249.8 billion, a 53% increase over the last budget for 1981, which was US$ 162.9 billion. Between 1982 and 1988, if Congress agrees, US$ 1.996 trillion are expected to be spent on defence. This equals $7,000 for every living American, twice the present trillion dollar national debt, or 25% more than the full cost of World War II. This budget would pay for all of World War II plus the entire Social Security programme for two years.
[Developing countries] The poorest countries spend around $50 billion on arms. Military expenditure increased more than six-fold between 1960 and 1986. In some of the poorest countries, the military budget is three times as high as the budgets for education and health combined. It has been estimated that the arms imports of a group of 20 countries with relatively large external debts were equivalent to 20% of the rise in their external debt between 1976 and 1980.