For a quarter of a century after the cold war, western democracies dared to believe the era of global confrontation was past. Some of the resources once poured into defence were diverted into schools and hospitals. Russia’s invasion of Ukraine and China’s increasing assertiveness have brought a decisive end to the “peace dividend”. Just this month, the US, UK and Australia have unveiled plans for an expensive fleet of nuclear-powered submarines in the Pacific as part of their “Aukus” alliance, and Britain has followed France, Germany, Poland, Japan and others in boosting defence spending. Democracies hope that by preparing for war they can preserve the broader peace.
Some countries are finding it harder than others to fund increases. Britain’s two-year, £5bn uplift was only half of what its defence secretary reportedly wanted — though it is on top of a £24bn boost to spending up to 2024-25 announced by Boris Johnson as prime minister in 2020. The UK is also one of only seven members that meets Nato’s “guideline” of spending at least 2 per cent of gross domestic product on defence. The vague commitment to lift that to 2.5 per cent if “circumstances allow” reflects a sluggish UK economy.
Others are doing more, if sometimes from a lower base. Germany has set up a €100bn special defence fund. France’s Emmanuel Macron has pledged to lift defence expenditure by 40 per cent, or €118bn, in 2024-30 compared with 2019-25. Poland plans to hit 4 per cent of GDP this year.
Nato’s annual report last week found that European members and Canada increased total defence spending in 2022 by 2.2 per cent in real terms, an eighth consecutive real increase. US spending grew by less than inflation last year, though is set to accelerate in 2023. Russia, funding its war in Ukraine, and China both made sizeable increases last year, according to the International Institute for Strategic Studies.
As western governments are realising, the technological sophistication of weaponry makes modern warfare cripplingly expensive. Russia’s war on Ukraine, moreover, has shown that 21st-century conflicts are not all about cyber attacks, drones and precision bombing from distant locations; tanks, artillery and ground troops are as relevant as ever. Being fully prepared for all threats means possessing the whole panoply of tools and an industrial base to support them. So democracies will have to share technology, intelligence, burdens and procurement more broadly and deeply than in the cold war.
Aukus is an ambitious attempt to put such principles into practice, its three members committing to co-operate not just on submarines but on hypersonic missiles, AI and quantum computing. Australia and Britain will co-produce a new attack submarine, with Australian money helping to expand UK shipbuilding capacity and a joint order reducing the costs. Two separate three-nation alliances are collaborating on next-generation fighter jets. Even the EU is breaking new ground, agreeing last week to spend €1bn on joint orders of ammunition, and use €1bn to reimburse member states for supplying rounds to Ukraine from existing stocks.
Challenging trade-offs still lie ahead. Declines in defence as a share of public spending since the late 1980s have helped European nations to expand welfare systems without big increases in tax burdens. Western governments have barely begun to explain to their populations the implications of a new military build-up. And the risk of rearming to deter is that opponents see it as a provocation. In the cold war stand-off between two superpowers, direct conflict was ultimately avoided. Today’s complex geopolitical picture will make repeating that feat all the harder.
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