Investment in warfare or military spending is a very potent tool for making a country powerful and influential on geo-political affairs. Countries with greater military strengths can use their military prowess not only for influence but also use it as deterrence against terrorism which is a menace all round the world.
In the 21st century we find countries increasing their military budget every year and the worlds more powerful country the United States is leading the pack. According to the 2015 data sheet, the united states have spent around 571 billion dollars on defense, followed by countries like China, Saudi Arabia, Russia, United Kingdom and so on with India occupying the eighth position with an annual defense spending of 45.2 billion dollars.
Even cumulatively the remaining 9 countries fall short of the U.S defense spending. But what does it take to finance such a massive defense budget? Is only the tax payer’s money enough to pay for the entire defense spending? No it’s not.
War, Oil, Economy and World Domination: Decoding The Myth
The United States have been borrowing large sums of money for their defense spending and the U.S Congress at times have also approved supplementary spending in defense which again is borrowed money. It is expected that interest payments could amount to 7trillion dollars by 2050 unless the U.S clear their tabs.
We’ll come to the adverse affects of this later on but let’s just harp on something else. What’s the genesis of this mammoth defense outlay? Where did it all start? See, this goes back to 1900’s when western countries were driven by the lust of oil reserves in gulf countries.
The British captured Baghdad and established their bases in Iraq in 1918 and they called the shots for several decades there. But with their partial exit there was ideally a gap which was filled by the U.S. But they did not wage war out of imperialistic ambitions. Instead it was purely based on strategy.
The idea was not to establish direct control over the oil fields but to strike a deal which would change the dynamics of the region. Un-interrupted cheap supply of oil to the U.S in exchange of Uncle Sam’s protection – that was the plan. But apart from this, the U.S also had this blind ambition of establishing a new geopolitical order whereby the Gulf States would do their bidding out of loyalty. This resulted in U.S supporting cruel authoritarian regimes and arming them with weapons literally creating a tinderbox.
The British exit out of the gulf entirely, rattled U.S policy makers and they worried about a power vacuum. These inhibitions proved right. The major oil producing states raised their voice against the unfair practices of the major oil companies. This led to formation of OPEC and subsequent embargo of the U.S and nationalization of production and pricing mechanisms making them wealthier.
Although the U.S lost its footing in the gulf it has always tried to intervene in the gulf with a very clear objective in mind. The intent has been oil guised in the form of ‘La Liberation’. The war in Iraq was a very shrewd ploy on part of the U.S to renew its influence in that region. The consecutive wars in Iraq have cost the U.S federal government billions of dollars which permanently de-stabilized the region leading to creation of dreaded outfits like ISIS, Al Nusra etc.
But one thing though, oil which for the last century has been the main focal point of conflict in that region seems to be losing its shine. Increase in supply with low demand have resulted in tumbling oil prices forcing gulf countries to negotiate terms of production and pricing once again and forcing them to be amenable towards western interlocutors. One wonders if the U.S is in a sweet spot again!
The U.S keeps on increasing its influence in the gulf be it Yemen, Syria, Iraq and there seems to be a clear strategy in place. They again want to call the shots in the region. Why? Is it oil again? No. It can’t be. There can be two scenarios though. Israel, if you look closely might fit in one of the scenarios very well.
America’s long time ally Israel is surrounded by failing Arab states which are becoming breeding ground for jihadis who would do anything to attack the Jewish state and even harm U.S interests in that region. Also, rising tensions between Shiya Iran and Sunni Saudi Arabia could throw the gulf into a sectarian tinderbox which the U.S desperately wants to avoid. As it would mean more breeding ground for terrorists who would pose a threat to U.S security and other allies in the region.
But in pursuit of such geo political influence the U.S federal government has lost sight of the sheer economic costs sustained by the economy. Since most of the wars and most of its defense budget have been financed by borrowing there is an increase in national debt leading to higher consumer interest rates. It also entailed huge opportunity costs. Had some of the money been invested in alternate sectors like health, education, public infrastructure jobs could have been created. People would have met their mortgage payments and could have saved themselves from foreclosures. Rising unemployment, increased speculation in markets, mismanagement of financial institutions exacerbated the problem further thus leading to the collapse of 2008.
Post the crisis, there seems to be no change. Every year the promise of defense cuts takes the back seat and there seems to be a lack of realization. The U.S has to realize the financial cost of its military adventures and curtail their defense spending by at least a third to be able to clear their tabs. There also needs to be a significant change in foreign policy when it comes to the Gulf States and they can’t afford to look at West Asia through the same prism of military might. Deep sectarian divide and the presence of terror groups are good reasons to hold your horses and approach issues cautiously. Negotiation seems to be the key word today and negotiation alone can solve problems here.
- News article : Nov 17 2014 , The Hindu
- Economic costs of war, Research paper , Brown University.
- Desert kingdom: how oil and water forged Saudi Arabia. (e-paper)
- Strategic logic of Militarism, Oxford Research paper, Toby Craig Jones.
- cnn.com : US Federal Budget.
- New York times: Oil prices: What’s behind the drop? Simple economics.
Written by: Abhirup Santra, Governing Committee Member of Sristi (Non-Profit Organization)