Saudi Arabia among the world’s 6 largest spenders on national defense

11 June, 2014 - Fundamental shifts in defense policies around the world are occurring: Russia’s moves in Crimea, Japan’s efforts to revitalize its defense, China’s military buildup, and US debates over post-war defense spending, will all continue to have a significant effect on global defense spending.

At the Middle Eastern level, Saudi Arabia’s increasing defense budget is tied to new capital programs including new and re-fitted F-15 fighter aircraft totaling nearly US$30 billion. Other Middle East countries included among the top 50 spenders worldwide include the United Arab Emirates, Oman, Iraq, Kuwait, and Egypt.

Deloitte’s new annual report, “Global Defense Outlook 2014”, examines trends, policies and key drivers in the current shift in defense spending. Specifically, the defense ministries of 50 nations whose total publicly-acknowledged spending on national defense accounts for more than 92% of global defense outlays, are looked at in-depth.

Six nations – the United States, China, Russia, Saudi Arabia, Japan and France generate 60% of global defense spending and adaptation, collaboration and investment are predicted to be the top-priority for defense management strategies in the coming years.

Other key highlights of the report include:

• From 2008 – 2013, Saudi Arabia increased its annual defense spending by $16B, following China ($60B) and Russia ($21B) while the largest decrease occurred in the United States, which reduced annual defense spending by $53B over the same period.
• Of the 25 Top 50 nations with the highest per capita income, Kuwait, Australia, Singapore and Japan are the only 4 that have not signaled that defense spending will decline or remain flat over the next 2-5 years.
• Of the 25 lowest-income members of the Top 50 spenders in the world, Saudi Arabia, Iraq, Oman, Algeria and Morocco along with Angola, Azerbaijan, Colombia, Russia and Ukraine are all increasing their annual defense spending in the same 2-5 year period.
• The largest absolute defense budget increases worldwide are likely to come from this group (Brazil, China, India and Russia).
• China, India, Brazil and South Korea comprise 70% of total defense spending among the lower-income economizers.

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About Deloitte & Touche (M.E.)

Deloitte & Touche (M.E.) is a member firm of Deloitte Touche Tohmatsu Limited (DTTL) and is the first Arab professional services firm established in the Middle East region with uninterrupted presence since 1926.

Deloitte is among the region’s leading professional services firms, providing audit, tax, consulting, and financial advisory services through 26 offices in 15 countries with more than 3,000 partners, directors and staff. It is a Tier 1 Tax advisor in the GCC region since 2010 (according to the International Tax Review World Tax Rankings). It has received numerous awards in the last few years which include Best Employer in the Middle East, best consulting firm, and the Middle East Training & Development Excellence Award by the Institute of Chartered Accountants in England and Wales (ICAEW).