Annual State Budget Conference
This year's panel topic addressed the question "Does Defense expenditure Stimulate Growth?" to which the HSF invited Prof. Christos Kollias from the Thessaly University, Greece, as the keynote speaker.
Prof. Kollias’ lecture related to world military expenditure, which for 2015 was estimated at around $1.7 billion, roughly 2.3% of global GDP. In his presentation, he addressed the fact that fifteen countries account for more than 80% of global spending on defense. Generally, developed countries produce domestically a higher percentage of the inputs they use in the defense sector compared to developing countries. According to SIPRI, out of the 100 top defense industries worldwide in 2014, 65 were companies based in the USA or Europe, 3 in Israel, 6 in South Korea, 5 in Japan and 2 in Australia. In his lecture, Prof. Kollias gave a survey about the trends and regional distribution of military expenditures globally, during both the Cold and post-Cold war periods, before discussing the economic effects of defense spending at the present. Given that the allocation of resources to national defense has important economic ramifications, Prof. Kollias presented some comparative data, which he called "Guns versus Butter", in which he compared defense spending vs. social, education, health and infrastructure spending. According to his research, the EU countries spend on average two times less for defense than for health and government expenditures, and the OECD spend half the amount for defense than what they spend for health and government expenses. Israel, in comparison, spends two times more for defense than for health and government expenditures. Comparing the defense expenditures (MILEX index) against GDP in 2010-2014, Israel spent 6% on defense while the average of EU and OECD lie at 1.8%.