Saturday, April 19, 2014
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South Africa DOES underspend on defence

Business Day columnist Tim Cohen last month reminded that the United Nations Human Development Report contains some great international comparisons. They sure do, especially the real “meat”of the report, the Human Development statistical tables.

Sobering indeed for a South African is our nation's low ranking: we are graded a “medium human development state” and listed 110th on a list of 169 states. Norway ranks tops and Zimbabwe at the bottom.

A look at the tables indicate the UN Development Programme (UNDP), authors of the report, see development as an amalgam of the education, health and employment standards of a nation, read with its crime rate, perceptions of wellbeing, gender inequality, demographic trends and government expenditure, among others. Sadly, we have not done too well in many of those areas, despite being the world's 30th or 31st biggest economy (in 1995 we were 19th or 20th).

The graph to consult is Table 15 “Enabling environment: financial flows and commitments”, read with Table 16 “Enabling environment: economy and infrastructure” (this tabulates the UNDP's take on gross domestic product - GDP). It is often said that South Africa should put more money into education – by taking it from the defence budget, for example, but Cohen notes that “in fact public expenditure on education as a proportion of GDP is high in SA. It is not only above average, but higher than Australia’s, the second-best-performing country [after Norway]” He is not the first to remark this: Quentin Wray of the Business Report newspaper wrote in November 2007 that SA “spends more on education - on a per capita, absolute and percentage of GDP [basis] – than many other countries” including most of the developed world.

Cohen doesn't go into detail, but Australia spends 4.7% (GDP: US$1015.2 billion) on education and South Africa 5.1% (US$276.4 billion), so our sporting rival still spends more in real terms as a percentage of GDP. Top spenders on the education front seem to be Kiribati (17.9%), Cuba (13.6%) and Palau (10.3%). On the other hand, local expenditure on health as a proportion of GDP is quite small.

Table 15 also looks at defence expenditure. South Africa spent 1.3% of GDP on the military in 2008, the year in the 2010 report. This is still roughly the case though the defence ministry wants to increase this to 2% on the basis that this is a norm for developing countries. The top spenders on defence – as an expression of GDP – seems to be Georgia (8.5%), Saudi Arabia (8.2%), Oman (7.7%), Israel (7%), Chad (6.6%), Iraq (5.4%), East Timor (4.7%) and Canada and the US (4.3% each). The bottom spenders arguably spent nothing. South Africa's neighbours tend to spend more but with smaller GDP's: Zimbabwe 4%, Namibia 3.5%, Angola 3%, Botswana 2.7%, Zambia: 2% and Lesotho: 1.6%. Mozambique and Tanzania “lag” with 1.1% each.

The average for the medium human development countries that have listed military expenditure is 1.78%. The average for the “very high human development” group, including Israel, is 1.92%. The average for the “high” group, including Georgia and Saudi Arabia, is a high 2.2%, and for the “low” group is 1.89%. The global average is 1.94% of GDP.

Something to think about indeed.

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