An analysis of Defense Spending inSoutheast Asia and China
J. Mikhail Nacino
MPP/IPOutline
Introduction
Research Questions
Presentation of Data Findings
AnalysisConclusion

Introduction
Global Defense Spending continues to decrease, except
in certain regions, such as Southeast Asia.
Three-fold increase in Arms Transfers in Southeast Asia
Naval equipment and aircraft with maritime roles

China’s ever-increasing funding for defense spending
2012 – up by 11.2%“Lack of transparency”

Research Question(s)What are the current trends in defense spending in thePRC, Brunei, Malaysia, Philippines, and Vietnam (ASEAN4)?
What were the salient features of PRC’s Defense Policy
throughout the study period?
Is there any relationship between PRC’s defense spending
and defense policy, to the defense spending trends ofBrunei, Malaysia, Philippines and Vietnam (ASEAN-4)?

Hypothesis“Ðefense Spending in Brunei, Malaysia, the Philippines andVietnam (ASEAN 4) is affected by the defense policy andspending of the Peoples’ Republic of China.”

ASEAN-4
Military Spending(Dependent Variable)

PRC Defense Spending(Independent Variable)

PRC Defense Policy(Independent Variable)

Table 1. GDP Growth20.00

15.00

10.00

5.00

0.00
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
-5.00

-10.00China

Brunei Darussalam

Malaysia

Philippines

VietnamTable 2. Military Expenditure as % of GDP, 1988-2012
98765432101988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
China, P. R.

BruneiMalaysia

Philippines

Viet NamTable 3. Military Expenditure by Constant (2011) US$6000
5000
4000
3000
2000100001988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
BruneiMalaysia

Philippines

Viet Nam

Table 3(a) Military Expenditure by Constant US$180000
160000140000120000100000
80000
60000
40000
20000
01988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
China, P. R.

Table 3(b) China vs ASEAN-4 Military Expenditure - Constant(2011) US$180000

160000140000120000100000

80000

60000

40000

2000001988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
China, P. R.

ASEAN-4

Table 4. China - GDP vis-a-vis Military Expenditure
16.00180000

16000014.00

14000012.00

12000010.00
100000
8.00
80000
6.00
60000

4.00
40000

2.00

20000

0.00

01988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
GDP GrowthMil. Ex. By % of GDP

Mil. Ex by US$

By the Numbers…
Consistent trend in the Military Expenditure as a percentage
of GDP for Malaysia, Philippines and China; while Brunei andVietnam initially had a high percentage, but decreased to theother countries’ levels and became constant since 2004 and1993, respectively.
Defense Expenditure of Brunei and Philippines was constant interms of constant (2011) US$. Malaysia and Vietnam showed
an increase, while China increased exponentially since late
1990s.
China’s Defense Expenditure is very high compared to thedefense expenditure of all ASEAN-4 countries combined.

China’s Defense Policy
Reference to China’s shift towards military development“Inflationary” increases
Tied to GDP
Increasing roles
Security Challenges

Conclusion
No clear relationship that China’s Defense Policy, as wellas its defense spending affected the defense spending
behavior of the ASEAN 4.
While there are noted increases with some of thecountries’ (Malaysia and Vietnam) expenditure in terms of
the amount, its share in terms of percentage of GDP does
not show any unusual fluctuations.

Thank you!

Comments, Suggestions and Violent Reactions
are welcome!