The International Institute

for Strategic Studies

THE

MILITARY
BALANCE

THE ANNUAL ASSESSMENT OF

GLOBAL MILITARY CAPABILITIES
AND DEFENCE ECONOMICS

Press Launch

REMARKS BY
Dr John Chipman, Director-General and Chief Executive
The International Institute for Strategic Studies, London

Welcome to the launch of The Military Balance 2016, the

annual assessment of global military capabilities and defence
economics from the IISS.
Joining me to answer your questions today are Dr. Bastian
Giegerich, James Hackett, Brigadier Ben Barry, Douglas
Barrie, Nick Childs and Giri Rajendran.
The global security environment is perhaps now more
challenging than at any time since the late 1980s. A surge
in terrorist attacks at the end of 2015 added to the growing
menu of crises that concern defence planners worldwide.
Conflicts and complex security challenges increasingly cross
borders, with their unpredictability and potential impact
only amplified by the increasing pace of technological
change. This, in turn, is affecting military modernisation
worldwide, which has become broader and more varied in
scope.
The proliferation of advanced military capabilities,
and of new and innovative technologies, is leading to an
increasingly complex balance of military power. There
is growing access, across the world, to military-relevant
high technologies. Many of these no longer originate in
government research and development laboratories, but
in the private sector and many will have been originally
designed with the civil sector in mind, not the armed
services. This presents a challenge for government not just in
keeping pace with the latest technology, but also monitoring
its proliferation, and coping with the blurred boundaries
between civil and military technologies, and offensive and
defensive military systems.
But for all this, states retain significant financial,
organisational and manufacturing power that will allow them
to shape and benefit from, if not wholly direct, the direction
of military-relevant technological innovation. For instance,
Russia and China are increasingly active in the development
and deployment of advanced military capabilities. Each has
become more assertive in their actions and are embarked on
military modernisation drives.

EUROPE
Debates continue in Europe over how to bolster military
capability. NATOs defence ministers will tomorrow again
consider this subject in Brussels, preparing for the July
Warsaw Summit. However, increased threat perceptions
have not yet led to a decisive breakthrough on capabilities
and spending.
Threats and risks have grown, but Europes means
to tackle them have not recovered from the long cycle of
defence cuts after 1989. When Western forces took part in the
first major post-Cold War coalition operation, Desert Storm in
1991, our data indicates that the UK had 475 combat aircraft
and France 579; today, twenty-five years later, the same totals
are 194 and 271 respectively. Similarly the period 1990 to
2015 saw a dramatic decline in combat battalion numbers in
Germany, Italy, France, the UK and US European Command,
with numbers falling from 649 to 185. After years of cuts, real
budget outlays stabilised in 2015 for the first time since 2008.
But resourcing future defence plans will remain difficult. In
2015, only four of the 26 European members of NATO met
the 2% spending objective agreed at the 2014 Wales Summit
for the remaining 22, the average percentage of GDP spent
on defence was 1.1%. These countries would need to raise
their collective outlays by nearly 45% to meet the target, or
by almost US$100bn.
Importantly, much of NATOs post-2014 assurance for its
Eastern members currently depends on the understanding
that, in times of crisis, member states armed forces will be
able rapidly to reinforce countries at risk.
Recent Alliance operations have taken place in relatively
uncontested air, sea and electromagnetic environments. This
may not always be the case in future.
For instance, Russia has deployed capabilities in its
Western Military District that can impede access to and
constrain freedom of action in the Baltic region. These include
the S-400 long-range air-defence system and the MiG-31BM
Foxhound combat aircraft. During a snap exercise in early

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THE MILITARY BALANCE 2016

PAGE 2 OF 4

Press Launch ARUNDEL HOUSE, LONDON 9 FEBRUARY 2016

NATO European Defence Spending in 2015 Meeting the 2% of GDP Target

2.5

In 2015, only four of the 26 European members of NATO met the 2% of GDP defence spending target mandated by the
Alliance: Greece, Poland, the United Kingdom and Estonia. For the remaining 22 states, the average percentage of GDP
allocated to defence was just 1.1%. As shown in the figure below, if all NATO European countries were to meet the
target, defence spending in NATO Europe would need to rise by nearly 45%, or US$97bn, from a 2015 total of US$226bn.

NATO 2% of GDP target

2.0
1.5

Cumulative additional spending required in

2015 to meet 2% of GDP target: US$97bn

1.0

Average % of
GDP allocated
by states not
meeting 2%
target: 1.1%

0.5
0.0

2015, Moscow for a short time moved Iskander-M short-range

ballistic missiles into Kaliningrad. With a reported range of
up to 500 kilometres, these missiles would bring much of
Eastern and Northern Europe into reach.
However, the advanced systems now in service with
Russias armed forces, like the Kh-101 and Kh-555 airlaunched cruise missiles and the Kalibr naval cruise missile,
have even greater stand-off ranges. With these in the order
of 2,000km for Kalibr and perhaps 4,000km for Kh-101
targets in Europe are within effective reach from a launch
deep within Russian territory.
As such, Russias potential anti-access/area-denial (A2/
AD) challenge calls into question a key element of NATOs
plan, initiated in Wales, rapidly to reinforce allies.
For NATO to meet this challenge, the Alliance has to
rediscover skills that have faded and renew capabilities that
have been reduced. For instance:
Russias recapitalisation of its cruise-missile inventory
raises questions as to NATOs ability to currently defend
against such systems. Some NATO states have capabilities
like Patriot missiles, but a key challenge remains adequate
detection time and ensuring defensive coverage.
Training needs to be broadened further, to respond not
only to resourceful insurgents, but also determined,
technologically savvy states, and take into account
potential operations in high-threat environments. Air
forces, for instance, have emphasised training against
IR-guided MANPADS; now training needs to increase
against radar-guided air-defence missiles like Russias
SA-20 and SA-21. Land forces need once again to take
account of modern armoured forces and increased
vulnerability from heavy rocket and artillery fire.
In the maritime domain, awareness of an A2/AD challenge
should mean renewed attention on task-force-level antisubmarine warfare as well as air defence against highspeed weapons and cruise-missile threats. Meanwhile,
last years strengthened BALTOPS exercise in the Baltic
Sea concentrated significant naval assets there, but it
is doubtful whether this would represent a credible

deployment option for NATO in the evolving A2/AD

environment. Maritime planners will need to consider
new or different capabilities for high-threat scenarios.
Another area of concern is electronic warfare (EW).
It can no longer be assumed that the electromagnetic
spectrum is a permissive environment. The US military
acknowledged that for around ten years they focused
on EW relating to terrorism, counter-insurgency
and SIGINT, while Russia developed high-powered
jamming capability with the ability to disrupt UAVs and
compromise communications.

THE MIDDLE EAST

Russias intervention has bolstered the Assad regime, while
also internationalising what was hitherto a civil war of largely
regional significance. It also served Moscow in portraying
Russia as a reliable and committed partner of its allies.
In Iraq, and in Syria, progress against Islamic State remains
slow and incremental. Washington has acknowledged that
the Iraqi army it trained in the 2000s was a counter-insurgency
force; training is now focused on developing a conventional
army, capable of combined-arms operations.
Some regional states are still part of the US-led air
campaign against IS, but regional attention is now also
focused on Yemen, where, one year after the country saw
the GCC launch its first major military campaign, Operation
Restoring Hope will soon enter its second year. However,
while achieving military gains in Yemen, the intervention
there has yet to decisively weaken the Houthi rebellion.
Russia late last year discussed delivering to Iran an
S-300 air-defence system, delayed by sanctions restrictions.
While a considerable proportion of Irans inventory is so old
that it can be considered obsolete, the lifting of sanctions
gives Tehran an opportunity to revisit its defence policy
and, though prohibitions on the sale of defence equipment
remain, might eventually allow it to address weaknesses in
conventional forces. Although the steep decline in oil prices
could restrict regional states defence spending, if Iran rearms, it will spur others to consider procuring additional

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THE MILITARY BALANCE 2016

Press Launch ARUNDEL HOUSE, LONDON 9 FEBRUARY 2016
military equipment, and may drive increased cooperation
across the GCC.
As our data indicates, most of Irans front-line combat
airpower dates back to the 1970s. F-4s, F-5s and F-14s, and a
significant proportion of Irans helicopter fleet, have all been
kept in service by a combination of local maintenance skills
and parts bought on the grey market. Even Irans MiG-29s
are early models. The same goes for land and naval forces,
with the T-54/55 and Chieftain main battle tanks, and the
Alvand-class corvettes, among those showing their age.
Irans acquisition of Kilo-class submarines increased its
ability to project conventional military power, in tandem
with its development of asymmetric capabilities designed to
offset conventional weakness, including its ballistic-missile
inventory.
Previously, Gulf states assumed that they would retain
a qualitative edge over Iran. If Iran re-arms, this assumption
may no longer hold. For instance, a decade out, Gulf air forces
looking to engage Irans ballistic missiles before launch could
encounter an air force much more capable of contesting its
airspace, and an integrated air-defence network able to pose
a significant challenge.
Some Arab states and Israel have spent substantial sums
on defence equipment in recent years, including on missile
defence. Here, Gulf procurements have largely been driven
by concern over Irans ballistic-missile arsenal. But while
the US has exhorted Gulf states to better coordinate these
capabilities, the US still remains at the hub of regional missile
defence. Our wall chart this year assesses missile defence
capabilities in the Gulf region.
If Iran re-arms, this may spur greater cooperation among
GCC states, building on the military ties now seen in Yemen.
But Gulf states aware that Iran will always have an edge
in terms of force size will likely look to procure yet more
advanced weapons, for instance high-speed precision strike
or cruise missiles, that would allow them still to reliably
engage military targets, even with more capable Iranian
opposition.

ASIA-PACIFIC
Chinas military capabilities continue to grow. Not only is
China launching more of its advanced Type-052D destroyers,
but Beijing confirmed in 2015 that it was engaged in building
its own aircraft carrier. It also expanded its overseas military
activities.
A month ago, China announced sweeping military
reforms affecting organisations and administration. The
former Second Artillery, now the PLA Rocket Force, has seen
significant improvement in recent years, and we analyse
Chinas ballistic-missiles sector in a specialist essay in this
years book.
The missiles displayed at the September Victory Parade
underlined Chinas continued investment in A2/AD systems.
Tensions escalated in 2015 over Chinas accelerating
construction activities on features it occupied in the South
China Sea. Regional states concerned by this, and which had
the means, were boosting their own capabilities, and in some
cases also developing closer ties with the US and Japan.

PAGE 3 OF 4

CAPABILITY AND TECHNOLOGY

Russias employment of advanced cruise missiles over
Syria, and Chinas display of capabilities at its September
2015 military parade, highlighted that advanced weapons
systems are no longer the preserve of Western states. These
include capabilities suitable for A2/AD tasks, armoured
combat vehicles, ballistic missiles and land-attack cruise
missiles. Russias Armata tank, displayed at the May Victory
Parade, utilises innovative technology developments and
is a radical departure from previous Russian designs. The
high-technology developments recently seen in the West
are increasingly mirrored elsewhere. Both China and Russia
have programmes to develop hypersonic glide vehicles
and high-speed precision weapons. Unmanned systems,
particularly UAVs, are now relatively common around the
world. Noteworthy developments in the past year include
the appearance of armed UAVs of Chinese origin in Iraq
and Nigeria. Small UAVs, often of commercial origin, are
increasingly finding their way into inventories. Israel has
deployed unmanned ground vehicles for perimeter security,
while Israel, Mexico and Singapore operate the Protector
unmanned surface vessel for maritime security.
The technological playing field is levelling, and advanced
military capability is proliferating. The costs of defence
technology are falling, as are the barriers to entry.
How has the West responded? One reaction is to try
and stay ahead of the curve, and to invest in new hightechnology areas such as cyberspace, data analytics,
additive manufacturing, autonomy, robotics and directedenergy weapons, and novel equipment developments,
such as the UKs Zephyr high-altitude pseudo-satellite.
Another approach will be to combine existing technologies
in innovative ways. One example is the US programme to
develop swarming UAVs by combining low-cost UAVs with
autonomous technology.
Meanwhile, the US has developed the Third Offset.
This seeks to benefit from expertise in the public and
private sectors, at home and abroad, to develop innovative
leap-ahead technologies, and ways of working, that would
enable the US to retain its technological advantage. As part
of this, the Pentagon developed its Defense Innovation
Unit-Experimental to leverage technologies emerging from
Silicon Valley. Much innovation is now driven by business,
and many dual-use capabilities have their origins in the
private sector. By partnering more with the private sector,
the US government could share research and development
costs, and benefit from the high-tech sectors culture of
innovation.

CONCLUSION
For Western military powers, unfettered access is no longer
a given, nor is technological superiority. Western military
technological superiority, a core assumption of the past two
decades, is eroding. Slowing this emerging trend or reversing
it will be a key pre-occupation of Western strategists in the
coming decade.
Our coverage in The Military Balance 2016 is global.
Thematic, regional and country analysis complement the

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THE MILITARY BALANCE 2016

PAGE 4 OF 4

Press Launch ARUNDEL HOUSE, LONDON 9 FEBRUARY 2016

Top 15 Defence Budgets 2015 US$bn
1. United States

2. China

3. Saudi Arabiaa

US$bn

4. Russiab

700
600

145.8
5. United Kingdom

81.9

65.6

500

6. India

7. France

400
300

597.5

56.2

48.0

46.8

8. Japan

9. Germany

10. South Korea

200
100

41.0

36.7

33.5

11. Brazil

12. Australia

13. Italy

14. Iraq

15. Israelc

24.3

22.8

21.6

21.1

18.6

0
United
States

Other Rest
top 15 of the
countries world

Includes Interior Ministry funding; b Under NATO defence spending definition; c Includes US Foreign Military Assistance

Note: US dollar totals are calculated using average market exchange rates for 2015, derived using IMF data. The relative position of countries will vary not only as a result of actual adjustments in defence spending
levels, but also due to exchange-rate fluctuations between domestic currencies and the US dollar. The use of average exchange rates reduces these fluctuations, but the effects of such movements can be significant
in a number of cases.

capability data, and we discuss other significant issues. These

include the following facts and trends:
A special essay in this Military Balance considers
deterrence in cyberspace. This is, we conclude, not
impossible provided there is clear focus on the threat to
be deterred, and an understanding that there may not
be a one size fits all approach. Indeed, the fact that the
major disruptions that could occur in cyberspace have
generally not yet done so, suggests that a degree of cyber
deterrence may already be at work.
In Europe, the UK retains a broad-spectrum military
capability, and the 2015 SDSR reversed some but not
all of the significant reductions in military capability
made by the previous coalition government. Military
capability, ambition and readiness are to be rebuilt.
2015 saw the first sign of defence-budget stabilisation
in Europe since the 2008 financial crash. Though
reaching NATOs 2% target will be difficult, some
states, particularly in Europes east and north, are now
registering real increases in defence outlays.
The double-digit real increase in the Russian defence
budget in 2015 meant that it dominated global defence
budget increases, accounting for over a fifth of all real
global spending increases in 2015.
Continuing the recent trend, Asia now spends nearly
US$100 billion more on defence than NATOs European
member states. Across Asia, military modernisation
continues, and regional defence spending in 2015
registered a 5.6% real-terms increase.
In Asia, we assess in particular Chinas improving
military capabilities. There is also a specialist essay on
Chinas ballistic-missile sector. The longer-ranged DF-26

missile potentially brings the US base at Guam into range

of Chinas anti-ship ballistic missiles.
In Africa, tackling Boko Haram and Islamist groups
in the Sahel remained a principal task for local armed
forces. It required continuing international attention
and military support. South Africas military, facing
continued financial problems but a growing external
role, retains ambitions to upgrade its capabilities.
Meanwhile, Africa is increasingly a market for Chinas
defence exports, and in a graphic we this year assess
observed deliveries of Chinese equipment, by type, to
Africa from 200515.
In Latin America, regional defence activity was again
dominated by the need to tackle organised crime and
narco-traffickers. Colombia, though, continues to plan for
the future and challenges beyond those posed by FARC.
Similarly, Mexico has adapted its forces to face internal
threats, but is now modernising to prepare for new
external roles.
The 2016 Military Balance provides the best available
public information on global military capabilities, trends and
defence economics. We also continue to develop The Military
Balance Plus, an online database that will allow us to harness
the benefits of new technologies. This product will allow us
to hold more data and produce more analysis, more often,
on national military capabilities. It will create a more agile
product, allowing our data to be searched and accessed in
new ways. By doing this, we aim to ensure that the facts
and analysis on national military capabilities contained in
The Military Balance will continue significantly to inform
discussions within government, business and the wider public
debate.

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