The new arms race – 15 stocks to dominate the modern battlefield

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The new arms race – 15 stocks to dominate the modern battlefield

Total military expenditure as a percentage of global GDP has been in steady decline over the last 60 years or so. It fell from just over 6 percent in 1960 to 2.225 percent in 2016. That could be about to change. The absolute amount of money spent on soldiers, sailors, airmen and their increasingly technologically sophisticated kit has never been so high. Defence, in its many forms, is a colossal global industry.

The end of history has been postponed

I explained recently why Professor Francis Fukuyama’s vision of The End of History did not quite come about after the dissolution of the Soviet Union on Christmas Day, 1991. But if the end of history has been postponed, there is only one power which can realistically challenge America as global hegemon this century – and that is, of course, China. That challenge is very slowly unfolding today; although it is unlikely to result in military confrontation in the immediate future for reasons that I shall explain.

The Chinese challenge to American hegemony is one thing; the rise of regional powers is another. In the early 21st century, deep-seated regional tensions, hitherto buried, have become more visible: Saudi-Arabia-Iran; India-China; India-Pakistan; Japan-China, and so on.

This more uncertain world reasserts the military imperative – the need to prioritise military expenditure. The Trump administration has certainly pressurised Europe to increase its defence expenditure – most notably at the G-20 summit in July. America spends 3.3 percent of its GDP on defence (down from 8.8 percent in 1960). Yet Germany, Europe’s largest economy, spends just 1.18 percent. (That is still worth well over US$40 billion)….

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