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Armed Forces – defence budgets are booming

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Since joining NATO, the countries included in this research (except for Moldova, which is not planning on joining the above mentioned organisation at the moment, but not ruling out such an option in the future) have purposefully moved towards an increase in defence spending in the amount of 2% of its gross domestic product (GDP), but, following the geopolitical turmoil with Russia conducting a full-scale invasion of Ukraine, for example, Latvia has set a goal to increase this indicator to 2.5% by 2025.[1]

In terms of absolute numbers, in 2022, the share of the state budget allocated for defence has amounted to 758.35 million EUR, whereas, for 2023, it is planned that under the circumstances of the slow-down of its economic development, this figure will decrease by nearly 10 million EUR.

For comparison – the Estonians, the northern neighbours of Latvia, have allocated 770 million EUR for their defence spending in 2022 equalling to 2.35% of their GDP.[2] Prior to the parliamentary election, surrounded by the pre-election atmosphere, the ambitions of the politicians have hit an even higher wave than in Latvia, with the potential people’s servants aiming at the intent to raise the defence spending up to 3 or even 6% of GDP, thus taking the defence budget well over the 1 billion EUR mark in the upcoming years.[3] Lithuania increased its defence budget from 2.05% to 2.52% of its GDP in 2022, allocating approximately one and a half billion EUR [4] for the country’s defence.

Calculations per capita show that the highest amount for defence purposes among the Baltic States is allocated by Estonia – 580.67 EUR. In Lithuania, this indicator reaches 533.86 EUR, while Latvia shows the lowest military spending per capita, namely, 404.29 EUR.

Considering this background, the trends revealed by the survey regarding the opinion of residents about the state’s ability or inability to resist the potential invaders seem to be at least partly natural. When responding to the question “In your opinion, is the national military defence sufficient to ensure the country’s security against foreign invaders?”, the response “Fully” was chosen by a mere eight percent (8%) of the respondents in Latvia, six percent (6%) in Lithuania and seven percent (7%) in Estonia.[42]

In its turn, the option of “To a large extent” was chosen in proportion to the military spending of each country. This for example, was how 26 per cent of the respondents expressed their message of confidence in Estonia – the Baltic leader in terms of military spending, 24 percent of the respondent’s place reliance to a large extent on the states military capabilities in Lithuania, while in Latvia such an option was chosen by 19 percent of the respondents. [42]

Equally relevant to the military budget of each state is the distribution of the respondents who support the opinion that the state is not able to defend itself against invaders – such an opinion is supported by 29 percent of the respondents in Estonia, 32 percent in Lithuania and 35 percent in Latvia.[42]

A special picture in the area of defence is observed in Poland, which, in the light of the Russian aggression in its neighbouring country spanning over several years, increased its military spending to 14.24 billion EUR or 2.4% of its GDP in 2022, thus reaching the third highest indicator among the member states of NATO (as for comparison – in 2014, the defence budget slightly exceeded “only” nine billion EUR), but in 2023 it is planning an increase of 47.1% reaching nearly 21 billion EUR.

It should be noted that, considering the population, each resident in Poland has spent a smaller amount for its army than in Latvia, namely, in 2022, each resident of Poland contributed 357.28 EUR to the defence purposes.

On the previously described background, the most modest of the countries included in this research is constitutionally neutral Moldova with a defence budget of a mere 44.84 million EUR in 2022 or a little less than 60% more than the amount allocated a year earlier, whereas – no doubt, within the context of the current geopolitical events – its plan regarding the year 2023 is to increase military spending by an additional 68.2%, reaching 78 million EUR. [5],[6]

When recalculating this indicator “per capita”, the amount allocated for defence seems to be absolutely symbolic, reaching a mere 13.7 EUR per capita in 2022, and the indicator in terms of the percentage of GDP is also very modest, significantly below 0,5%; at the same time, the Minister of Defence has already expressed his opinion that the normal rate of military spending even for a country like Moldova would be around 2% of the GDP. [7]

Public opinion regarding the capabilities of the state’s armed forces also show dramatic differences. 91% of the surveyed Moldovans have expressed their opinions that the army of Moldova is not capable of defending its country.[8] Significantly, such an opinion is shared also by the President Maia Sandu, pointing out that their armed forces had been “neglected” for thirty years.[9] Furthermore, experts relate such a trend to pro-Russian governments which had predominantly been running the country for the last few decades.[10]

62% of the respondents believe that the budget of the Ministry of Defence should not be increased, but the allocation of larger sums of money for defence is supported by nearly half as many interviewees, namely, 34%. Forty-one percent of the respondents have expressed the opinion that the staff of the armed forces of Moldova currently consisting of 6,500 professional soldiers, 2,000 national service soldiers and 65,000–70,000 reservists, should be increased, 37% think that such numbers should be left unchanged, while 12% support the opinion that the number of soldiers should be reduced.

[1] https://www.lsm.lv/raksts/zinas/latvija/saeima-atbalsta-aizsardzibas-budzeta-pieaugumu-lidz-25-no-ikp-2025-gada.a453279/

[2] https://www.kaitseministeerium.ee/en/objectives-activities/defence-budget

[3] https://news.err.ee/1608807376/estonia-s-parties-want-to-raise-defense-spending-to-3-6-percent-of-gdp

[4] https://www.lrt.lt/en/news-in-english/19/1647017/lithuania-raises-defence-spending-to-2-52-percent-of-gdp

[5] https://novostipmr.com/en/news/22-02-01/moldova-increases-military-spending-more-15-times

[6] https://balkaninsight.com/2023/02/13/as-moldova-hikes-defence-spending-rebel-region-follows-suit/

[7] https://mil.in.ua/en/news/moldova-to-increase-defense-budget-by-68/

[8] https://en.interfax.com.ua/news/general/894353.html

[9] https://en.wikipedia.org/wiki/Armed_Forces_of_the_Republic_of_Moldova

[10] https://balkaninsight.com/2023/02/13/as-moldova-hikes-defence-spending-rebel-region-follows-suit/

[42] The survey conducted by the market and public opinion research company in Lithuania, Latvia and Estonia – reflected the attitude of the residents of the Baltic States towards their national security. This survey was conducted on the Internet in the autumn of 2022.

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