Press Launch

REMARKS BY
Dr John Chipman, Director-General and Chief Executive
The International Institute for Strategic Studies, London

Welcome to the launch of The Military Balance 2015, the

annual assessment of global military capabilities and
defence economics from the IISS.
Joining me to answer your questions today are James
Hackett, Dana Allin, Brigadier Ben Barry, Douglas
Barrie, Virginia Comolli, Toby Dodge, Nigel Inkster, Giri
Rajendran, Nick Redman and Eneken Tikk-Ringas.
This latest Military Balance is replete with facts,
figures, tables and maps analysing military organisations,
inventories and defence spending throughout the world.
Specialist essays focus on directed energy weapons,
which we assess are closer to service entry than ever
before; US military space systems, analysing the challenge
to US space assets from a crowded space environment;
and on the problems posed by hybrid warfare. Our wall
chart this year focuses on Russian armed forces.
The Military Balance 2015 again confirms the decline
in European defence spending and the continued rise in
Asian defence expenditure. Debate in Europe is about
whether that decline can be allowed to continue given
the increase in security challenges in Europe and in
Europes near abroad. The discussion in Asia is about
ensuring that the economic growth that supports military
modernisation remains the core national objective, so that
countries will be self-deterred from allowing tensions to
escalate to military conflict.
While in early 2014, the concern was about possible
military conflict in Asia, the salient strategic reality of the
year was the re-emergence of conflict in Europe and the
ever complicating and widening nature of extreme Islamic
terrorist groups activity in the Middle East and Africa.

EUROPE
The events in Ukraine over the last year and the erosion
of virtually all trust between Western powers and Russia
have challenged the post-cold war European settlement.
Western countries are now having to devise a strategy
that would need to be a whole of government strategy
to deal with an apparently revisionist Russia. As Franois
Heisbourg, the Chairman of the IISS, states in an article in
the current issue of Survival, the key components of that
strategy would be dissuasion of Russian adventurism on
EU or NATO territory, active support of the sovereignty
of other European states, and a demonstrable readiness to
be respectful of Russias non revisionist security interests.
In the meantime, the way in which the Ukrainian
crisis is handled will set the tone for how the broader
relationship with Russia unfolds. Civilian suffering in
Ukraine has been profound, with both sides employing
conventional military tactics reflective not only of their
shared military heritage, but also of the increasingly bitter
nature of the combat. These tactics have included the
widespread use of artillery rockets and shellfire during
operations amidst civilian population centres. The use
of militias and volunteer battalions has raised questions
over effective command-and-control and will complicate,
when the conflict finally abates, any disarmament,
demobilisation and reintegration initiatives that may be
needed.
Present attempts at a political settlement appear
unpromising. The military situation remains fluid, and
therefore fixing ceasefire lines particularly challenging,

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THE MILITARY BALANCE 2015

PAGE 2 OF 4

Press Launch ARUNDEL HOUSE, LONDON 11 FEBRUARY 2015

even if there were a will of all parties to do so. It is not
clear that the will is there.
While the Europeans now seem focused on a ceasefire,
the other parties the separatists and the governments of
Ukraine and Russia are thinking more strategically and
have entirely incompatible aims. President Poroshenko
seems determined to ensure that Kievs writ runs across
the whole of eastern Ukraine and that it controls the entire
south-eastern border. He is not willing to cede a veto
over foreign policy to Donbas. The Kremlin, by contrast,
appears to desire a fractured Ukraine, unable to move
beyond Russias orbit and get closer to western institutions.
Whereas the Kremlin might be content for the Luhansk
Peoples Republic and Donetsk Peoples Republic to exist
within their current borders, the separatists are not. They
want to control all of Donetsk and Luhansk Oblasts, to
achieve a measure of economic viability, and they refuse
to see their future within Ukraine.
There are further economic considerations: Kiev has
imposed a blockade on the breakaway republics, in effect
obliging Moscow to support them. Ukraine seems unable
to win on the battlefield or at the negotiating table, but its
adversaries cannot force it to resume fiscal responsibility
for the East.
Finally, there is the issue that sparked the crisis:
Crimea. Russia will not countenance returning it but
neither Kiev nor the West can accept annexation. If the
crisis in Eastern Ukraine is solved, Crimea will return to
the fore. It is important for all parties that any settlement
in Eastern Ukraine does not prejudice their positions and
interests regarding Crimea, and this further complicates
the task of arriving at a political settlement in Donbas.
Into this complex set of political considerations has been
introduced the question of arms to Ukraine. The German
government considers that there is no amount of arms
that the West might give Kiev that would not potentially
be matched by Russian support to the separatists and that
therefore arms shipments to Kiev are not the answer. A
growing body of opinion in the US Congress considers
that the US has a moral obligation and a strategic duty
to provide Ukraine with increased means to defend itself.
Others consider the option of arming Ukraine has at least
to be kept on the table in support of the diplomatic
process to end or at least freeze the military conflict.
Throughout this crisis, Russia has shown its
determination to use force and support the use of force
by others in Ukraine. Military modernisation in Russia is
continuing, with investment in new ships, combat aircraft
and guided weapons. Russia continues to test the Sukhoi
T-50 fifth generation fighter aircraft, and may be finalising
designs of a new long-range bomber. Russia has nuclear
weapons very much at the centre of its military strategy,
and there is increased emphasis on its rapid-reaction

% 10

Balkans Southern Western Central Northern SouthEurope Europe Europe Europe eastern
Europe

5
0
-5
-10
-15
-20
-25

Over 4 years 201014

Constant 2010 prices and exchange rates

Europe Real Defence Spending Changes 201014 by

Sub-Region (%)

forces, while its air and maritime capabilities are often

being deployed provocatively. Overall, Europe is facing a
more belligerent Russia that appears intent on testing the
resolve of the West.
European defence spending continued the decline seen
since the 2008 financial crisis, and was in 2014 cumulatively
8% lower, in real terms, than in 2010. There were signs
that the more challenging strategic environment was
shifting budgetary priorities, particularly in Northern
and Eastern Europe, and amid unease about possible
gaps in NATOs capacity to counter Russias use of
hybrid warfare techniques. However, defence allocations
in Europes leading military players maintained their
downward slide.
Military equipment across the continent also
continued to reduce, with policymakers focusing instead
on the advanced capabilities of future kit. Numbers have
declined substantially since the Cold War. Between 1995
and 2015, main battle tank numbers in Europe dropped
from around 25,000 to just under 8,000, while fighters and
ground attack aircraft decreased from 5,400 to 2,400.
Appeals from the NATO Secretary General, including
most recently at the Munich Security Conference, for
member states to meet the pledge to spend 2% of their GDP
on defence continue to be made. That goal will not be met
soon. NATO has nevertheless agreed to enhance its NATO
Response Force from 13,000 to 30,000 troops and signal its
intent to become more agile. There will soon come a point
when NATO declaratory policy on enhanced and more
rapidly deployable forces to preserve the current security
order will require increased investment by NATO members
or a new burden-sharing agreement between them.

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THE MILITARY BALANCE 2015

Press Launch ARUNDEL HOUSE, LONDON 11 FEBRUARY 2015
SYRIA, IRAQ AND ISIS
While a revisionist Russia has challenged the European
security order, the threat from extreme Islamic terrorists
strengthened during the year. The rise of Islamic State of
Iraq and al-Sham (ISIS) and the flow of jihadists in and
out of various Middle East theatres of war has become
a major pre-occupation for European states. Intelligence
services have to concentrate heavily on the threats posed
to European societies by returning jihadists. Military
successes on the part of ISIS galvanised a US-led coalition
into launching airstrikes against the jihadi movement in
Iraq and also in northern Syria.
The hybrid nature of ISIS part insurgency, part-light
infantry, part-terrorist group proved key to its advances.
Its campaigns in Iraq and Syria have shown ISIS to be
an adaptable adversary, demonstrated by its tactical
adjustment in late 2014 to reduce vulnerability to coalition
airpower and ISR capacities.
Since launching an air campaign against ISIS in August
2014, the US-led Operation Inherent Resolve has met with
mixed results in both Iraq and Syria. The strategy of giving
extended air support to local allies has certainly played a
part in breaking the strategic momentum that ISIS created
through the summer of 2014. In Iraq, coalition airpower
was crucial in the retaking of Mosul dam in August, as
well as defending Erbil, the capital of the Kurdish Regional
Government, from an ISIS onslaught. Iran also provided air
support to Iraq. In Syria, the heavy use of airpower proved
decisive in the defence of the Kurdish city of Kobane. Still,
the US Pentagon had to acknowledge in late January that
the total gains made against ISIS in Iraq add up to only
1% of the territory it holds in that country. It is clear that
American allies on the ground, the Kurdish Peshmerga,
the Iraqi army and the Free Syrian Army, are not yet
strong enough, in spite of US weapons supplies, training
and air support, to win sustainable victories against ISIS.
The upcoming push to retake Mosul, Iraqs second largest
city, will be a decisive test of whether President Obamas
strategy of giving extended support to proxy forces on the
ground, can defeat, as opposed to contain, ISIS.
It is likely that long-term training and support for
both Syrias non-ISIS rebels and Iraqs security forces and
broader government institutions will be required. That
support will need to be combined with sustained political
efforts to regain the trust of Iraqs Sunni minority.
Coalition air operations may lead to tactical victories
against ISIS especially when they enable progress by
fighters opposed to it but they cannot inflict strategic
defeat on the group. Military methods alone cannot
successfully tackle the sophisticated means that ISIS
uses to recruit and inspire its followers and sustain its
operations. Countering ISISs information operations,

PAGE 3 OF 4

designed in equal measure to intimidate and open

seams in the coalition will also require lasting, whole-ofgovernment and multilateral attention.
Complex security dynamics across the region meant
that regional defence spending was already high, but
growing insecurity and conflict have contributed to a
further acceleration. Spending remains focused on airdefence and strike systems, particularly in the Gulf,
though some states have invested in rotary-wing, airlift
and tanker capacities, as well as armour and artillery. In
2011, average real defence spending growth in the Middle
East and North Africa region was 3.5%. In each year since,
we estimate it has increased by an average of 10%.

ASIAS MILITARISATION CONTINUES

In contrast to the continuing decline evident in Europe,
overall defence spending has increased in Asia since
2010 by more than a quarter in nominal terms, growing
to more than US$340bn in 2014. Chinas defence spending
continues to outpace its neighbours efforts. In 2010 China
accounted for around 28% of the Asian total; by 2014 its
share had increased to around 38%. In contrast, Japans
share of regional military outlays fell from 20% in 2010 to
just less than 14% in 2014.
Chinas military procurement programme, supported
by these budget increases, continues to attract attention.
Following a flurry of new naval programmes, from
the Liaoning carrier to destroyers, more are underway.
Armament has also improved. The 60 frigates and
destroyers in service in 2000 had less than 600 anti-ship
and surface-to-air missile tubes between them; the current
fleet has almost triple that number with only 20% more
hulls. The November 2014 Zhuhai air show provided
further insights into Chinas military progress. Highlights
of the show included the FC-31 combat-aircraft prototype,
which might be intended for export, a large ramjetpowered supersonic anti-ship missile design, the CX-1,
and a range of air-to-surface weapons being offered for
use on UAVs.
Japan too has increased its defence budget, and
continues to boost its military capabilities. Tokyos defence
plans include acquisition of F-35s, tilt-rotor aircraft and an
expanded submarine fleet, including the advanced Soryuclass. This boats advanced propulsion offers a substantial
increase in the time a submarine could spend submerged
at sea. Australia is assessing the Soryu-class as a possible
replacement for its existing submarines. Submarines
remain a key requirement for states across Asia. Vietnam
has started to receive its Kilo-class boats from Russia,
and India, South Korea, Indonesia and Singapore are also
upgrading their submarine forces.

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THE MILITARY BALANCE 2015

PAGE 4 OF 4

Press Launch ARUNDEL HOUSE, LONDON 11 FEBRUARY 2015

Top 15 Defence Budgets 2014 US$bn
1. United States

2. China

3. Saudi Arabia

US$bn

4. Russia

700
600

129.4
5. United Kingdom

80.8

70.0

500

6. France

7. Japan

400
300

581.0

61.8

53.1

47.7

8. India

9. Germany

10. South Korea

200
100

45.2

43.9

34.4

11. Brazil

12. Italy

13. Israela

14. Australia

15. Iraq

31.9

24.3

23.2

22.5

18.9

0
Rest
of the
world

Other United
top 15 States
countries

Includes US Foreign Military Assistance

Note: US dollar totals are calculated using average market exchange rates for 2014, derived using IMF data. The relative position of countries will vary not only as a result of actual adjustments in defence spending
levels, but also due to exchange-rate fluctuations between domestic currencies and the US dollar. The use of average exchange rates reduces these fluctuations, but the effects of such movements can be significant
in a small number of cases.

2014 Top 15 Defence and Security Budgets as a % of GDP*

Republic that
Azerbaijan
Jordan Armenia
Yemen Bahrain
Myanmar
retain
accumulated
experience
mindful
that once a
of Congo
capability is lost, it is harder to rebuild.
Additionally, Western states will look to retain a
The West still spent more than half of global defence
14.6%
10.4%
7.6% 5.3%
5.1%
4.5%
4.3%
4.3%
4.2%
3.9%
3.9%
12.0%
edge
while
attempting
to
minimise
the risks
outlays in 2014,
though
this
was 8.8%
down8.1%
from
two-thirds5.2% technological
*Analysis only includes countries for which sufficient comparable data is available. Notable exceptions include Cuba, Eritrea, Libya, North Korea and Syria.
to their military power from the diffusion of previously
of global totals in 2010. Given this trend, and even though
select technologies to a broader range of state
and nonsome states have marginally increased their defence
Planned Global Defence Expenditure by Region 2014
Planned Defence Expenditure by Country 2014
state actors.
efforts amid heightened security concerns, European
Latin America and
Latin America
This timeandlast
year, we highlighted the challenge to
states will have to more
seriouslySub-Saharan
weigh the
the Caribbean
Africaoptimum
the Caribbean, 4.6%
4.6% ambitions,1.5%
Sub-Saharanand
Africacomplex security
defence
planners
from
a fractured
balance between their defence
deficit reduction
Other Middle East
Middle East and
1.5%
and
North
Africa,
7.6%
environment. As we enter 2015 this state of affairs is more
and discretionaryNorth
spending,
such as military outlays.
Africa
12.6%
Saudi Arabia, 5.0%
North America
threatening.
Insecurity, violence and the use of military
In contrast, emerging
economies have continued
to
37.1%
Other Eurasia, 0.7%
United States
force are all increasing; the arc of instability
is widening,
escalate their defence spending. In 2014 these increases
36.1%
Russia, 4.4%
and
military
crises
do
not
seem
to
end,
but
rather
multiply.
more than offset Western reductions; overall, real global
Other Asia and
Australasia,
5.4%
Meanwhile, armed forces remain involved not just on
defence expenditure
Asia andin 2014 rose by 1.7% after three
Australasia
South Korea, 2.1%
traditional
military tasks, but also on missions as wideyears of reductions.
However, this trend may moderate
21.4%
India, 2.8%
ranging
as
humanitarian
assistance and disaster relief and
this year in light of falling oil prices, the stagnation of the
Japan, 3.0%
Kingdom
pandemic
response;
these
missions United
remain
global in scope
Russian economy and
slowing
global
growth.
China, 8.0%
Russia and Eurasia
3.8%
Europe
Non-NATO
Europe,
1.4%
5.1%
and complex in execution.
Of course spending is only part of the picture.
France
17.8%
3.3%
Other NATO
Germany
As policymakers
grapple
with
these issues, the 2015
Military capability like that of the US still the worlds
7.6%
2.7%

edition of The Military Balance provides the best available

largest defence
relates
Figures dospender
not sum due to rounding
effects to more than simply
At current prices
and exchange
rates. procure. It also relates to the
public information on military capabilities, trends
the equipment
a state
might
and defence expenditure across the world. The facts
quality of personnel and decades of accumulated military
and analysis concerning national military capabilities
training and operational experience; factors like these
contained in The Military Balance will help significantly
inform a more rounded assessment of a countrys military
to inform discussions within government and the wider
capability. So while defence investment gaps are closing,
public debate.
Western states with global defence ambitions must try to
Afghanistan
CONCLUSION

Oman

Saudi
Arabia

South
Sudan

Iraq

Israel Algeria Angola

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