STOCKHOLM, Sweden, June 3 (UPI) -- Latin American arms spending in 2009 continued rising despite the economic downturn because of the region's cash reserves from commodity exports and other surpluses, the Stockholm International Peace Research Institute said in its annual report.
SIPRI said a number of factors ensured that defense expenditure in the region remained largely unaffected by the global economic crisis.
World military expenditure rose in 2009, reaching an estimated $1531 billion, an increase of 5.9 percent in real terms compared with 2008, and 49 percent higher than in 2000, SIPRI said.
This represents approximately 2.7 percent of global gross domestic product or $224 per person.
Almost all regions and sub-regions shared in the global increase. More than half of the increase came from the United States, but such major spenders as Brazil, China and India also made large increases, reflecting their continued economic growth and aspirations for global and regional influence, SIP RI said.
The global financial crisis and economic recession have not led to a general fall in military spending, despite the resulting falls in government revenues and increases in deficits.
SIPRI said that in Latin America, as in Africa and the Middle East, natural resource revenues played an important role in determining both the levels and the dynamics of military spending in many countries.
The effects of the global economic crisis on military spending in Latin America were varied, SIPRI said. The crisis slowed previously high economic growth rates and reduced exports, which affected state revenues, in particular in countries reliant on commodity exports.
However, SIPRI said, Latin America was less affected by the crisis than had been expected, largely due to a combination of current account surpluses, remittances from outside the region and expansionary fiscal policies.
In Central America and the Caribbean, military spending rose by 9.7 percent in real terms to reach $5.6 billion in 2009. In Mexico, the militarization of the response to drug-related violence led to an increase of military expenditure of 11 percent in real terms compared with 2008, SIPRI said.
In South America, military spending reached $51.8 billion, an increase of 7.6 percent in real terms compared with 2008. Brazil and Colombia, the biggest spenders in the region, increased their military spending by 16 percent and 11 percent in real terms, respectively. However, Chile and Venezuela, two other big spenders that both have a high dependence on commodity exports, cut their military budgets, SIPRI said.
Chile cut its military spending firstly because of a fall in copper prices and then in response to reconstruction needs after the February earthquake.
Venezuela's actual military expenditure has consistently exceeded the initial budget in recent years, SIPRI said. Thus, although the country's budgeted military spending of $4.2 billion in 2009 would represent a decrease of 25 percent over 2008 -- the largest fall in Latin America --the drop may not be realized.
Oil revenues and economic growth have permitted Venezuela to increase military expenditure by 136 percent in real terms between 2003 and 2008, said the institute.