Military Expenditure and the Arms Trade in the Asian-Pacific Region

The trend towards further reductions in world military expenditure does not seem to be shared by most Asian-Pacific countries. Military expenditure in the region continues to expand, but the military burden (the proportion of military expenditure in GDP) and the military share (the share of military expenditure in central government expenditure) are declining in most Asian-Pacific countries. This is largely due to sustained high economic growth in the region. Thus far, the military burden has not had an adverse effect on the region's economic growth, but continued expansion of military expenditure is not sustainable in countries where the military share is high. Asian-Pacific countries are vigorously developing, modernizing and upgrading their indigenous arms production capabilities. This effort has been aided not only by the availability of financial resources but also by the changing nature of the international arms market that offers attractive package deals, including various licensing, co-production and offset manufacturing arrangements.