STOCKHOLM - World military spending grew two percent last year, according to official figures, but the increase is much bigger when outlays prompted by the September 11 attacks are included, a security policy think-tank said on Thursday.

"World military expenditure in 2001 is estimated at $839 billion," the Stockholm International Peace Research Institute (SIPRI) said in the 33rd edition of its yearbook.

The 15 biggest spenders, led by the United States, accounted for more than three quarters of total world military expenditure, it said.

SIPRI researcher Elisabeth Skons said the $839 billion represented two percent growth in real terms compared with 2000.

"But it is an underestimate based on adopted budgets. I'm sure the increase will be much larger due to September 11, which has led to additional expenditure in the United States but also in other countries," Skons told a news conference.

Excluding such supplementary budgets, global military expenditure last year accounted for 2.6 percent of world gross domestic product (GDP), said SIPRI, whose data are widely recognized for their reliability.

The Organization for Economic Cooperation and Development (OECD) said in a recent report on the effects of September 11 that increased military spending reduced economic growth in the longer term.

"Rough calibrations suggest that an increase in public military-security spending by one percent of GDP and private security spending by 0.5 percent of GDP would reduce output by about 0.7 percent after five years," the OECD said.

SIPRI Director Daniel Rotfeld said combating terrorism had become a high priority for Western governments after September 11.

"However, the trans-Atlantic community is confronted with a disagreement over the main aim: whether to focus on disrupting and defeating the al-Qaeda network or eliminating the roots of terrorism with a broader range of policies," he said in the yearbook. Al Qaeda is blamed for the September 11 attacks.

NUCLEAR THREAT

SIPRI said: "The magnitude of the changes that are needed to protect nuclear material against terrorist attacks has not been widely appreciated.

"There is evidence that terrorists and thieves have already threatened or attacked nuclear facilities and tried to purchase or steal nuclear and other radioactive material."

Rotfeld said one effect of the attacks on the World Trade Center in New York and the Pentagon in Washington was that the pace of NATO enlargement had accelerated.

Another was that the countries of Central Asia had gained in importance in the field of security policy while Europe, as a relatively more stable region, had become marginalized.

The SIPRI yearbook said Russia overtook the United States in 2001 as the world's largest supplier of weapons to other countries. Russian arms transfers increased 24 percent last year.

China was the largest recipient of arms, its imports increasing 44 percent from 2000, while imports by India increased 50 percent, SIPRI said.

"It is impossible for arms suppliers to control whether arms deliveries will stabilize or destabilize a particular bilateral relationship, as illustrated by the case of India and Pakistan," the institute said.

SIPRI researcher Shannon Kile told the conference the Kashmir conflict looked like "one of the most perilous situations" the international community had faced in a long time.

SIPRI said there were 24 major armed conflicts in 22 locations in 2001, down from 25 conflicts in 23 locations the year before. Roughly half were contests for control of government and the other half for territory.

© 2002 Reuters Ltd

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