News Review 26/04/2023

US Military Spending Tops Next 11 Countries Combined

Global weapon expenditures hit a record $2.24 trillion in 2022, an increase of nearly 4%, according to the Stockholm International Peace Research Institute (SIPRI). The global watchdog found the trend was led by European countries returning to Cold-War spending levels, though the US remained the world’s largest spender on war by far. Dr. Nan Tian, a senior researcher with SIPRI’s Military Expenditure and Arms Production Program, said, “The continuous rise in global military expenditure in recent years is a sign that we are living in an increasingly insecure world.” American military spending continues to smash records, having long held the number-one spot for military largesse. According to the SIPRI report, the nearly $20 billion in weapons Washington shipped to Kiev in 2022 is the largest amount of security assistance one country has ever provided to another in a single year. Additionally, the US remained the world’s largest military spender at $877 billion – more than the total military budgets of the next 11 top-spending countries combined. Many of the other high-spending nations are allies of Washington, with military expenditures among NATO members topping $1.23 trillion. William Hartung, senior researcher at the Quincy Institute, explained that the increasing military outlays are a bad sign for peace while stressing the importance of diplomacy.

BRICS Enlargement

South Africa's ambassador to BRICS (the informal bloc of Brazil, Russia, India, China and South Africa) said 19 countries had expressed an interest in joining the bloc, which will meet in Cape Town on June 2-3 to discuss enlargement. Saudi Arabia and other oil-producing Gulf Cooperation Council states, as well as Egypt and Indonesia, seem the most likely to join BRICS quickly. This enlargement would increase the bloc's wealth and perhaps enable it to fund and invest in more projects, potentially increasing its ability to function as a counterweight to Western institutions. However, the countries participating in BRICS, especially if it is enlarged, have wildly divergent interests from each other, which will impede the bloc's ability to focus on common goals. Additionally, GCC countries' desire to join BRICS does not necessarily mean that they are abandoning their defence and military relationships with the US and the West.

US Default on Debt will Trigger an ‘Economic Catastrophe’

US Treasury Secretary Janet Yellen on Tuesday warned that failure by Congress to raise the government’s debt ceiling – and the resulting default – would trigger an “economic catastrophe” that would send interest rates higher for years to come. She said it was a “basic responsibility” of Congress to increase or suspend the $31.4 trillion borrowing cap, warning that a default would threaten the economic progress that the United States has made since the COVID-19 pandemic.

Unlike most other countries, the US puts a hard limit on how much it can borrow. Because the government spends more than it takes in, lawmakers must periodically raise the debt ceiling. Kevin McCarthy, leader of the Republican-controlled House of Representatives, last week floated a plan that would twin $4.5 trillion in spending cuts with a $1.5 trillion increase in the debt cap, calling it the basis for negotiations in coming weeks. The White House insists the two issues should not be linked, and the Democratic-controlled Senate is likely to reject the proposal. Whilst debt ceiling debates are becoming more frequent the differences in Congress are expanding to include multiple issue which is effecting America’s global image.