Defence spending increases are now inevitable, but do aid budgets have to pay the price?
The end of the Cold War in the early 1990s brought with it a ‘peace dividend’, whereby countries were able to reduce spending on national defence and redirect that funding to other areas of their budget. Economies experienced a period of sustained growth and nation states largely cooperated via multilateral institutions.
That’s not to say there weren’t periods of instability in the post-Cold War era. China periodically flexed its muscles in the South China Sea, Russia grew increasingly aggressive and annexed Crimea in 2014, and the United States pursued regime change in Iraq and Afghanistan.
However events of the past few days mean all of a sudden we find ourselves in a very different strategic environment, one in which the great powers rule supreme and defence spending increases again.
On 24 February, the third anniversary of Russia’s invasion of Ukraine, the United States joined Russia, Belarus and North Korea in voting against a United Nations General Assembly resolution holding Russia to account for its actions. And four days later a meeting between Ukrainian President Volodymyr Zelensky and US President Donald Trump in the Oval Office devolved into a shouting match that could yet lead to the US withdrawing support for Ukraine.
The European Union foreign policy chief, Kaja Kallas, responded by saying “the free world needs a new leader” and the likely new German chancellor said “it is clear that the Americans, at least this part of the Americans, this administration, are largely indifferent to the fate of Europe.”
At a summit in London on 3 March European leaders spoke of the need to increase defence spending, with European Commission president Ursula von der Leyen noting “we urgently have to re-arm Europe”.
It now appears inevitable that countries around the world will need to increase defence spending, either to appease or attempt to defend themselves from one or more great powers. That increase will need to be offset by either additional revenue or cuts elsewhere. In the case of the UK, the government has elected to cut the budget for international aid in favour of increasing defence spending. Reaction to the announcement has been mixed, with the International Development minister resigning in protest and a former chief of the general staff arguing that cutting aid is counterproductive and will lead to weaker states.
Were there alternative sources of funding the UK government could have tapped? How about the £57 billion spent on subsidising fossil fuels? Or the UK’s share of the $200 billion in tax avoided by multinational corporations moving their profits to tax havens?